There is no denying that alarming inflation rates are having an impact on how far your dollar goes these days. A recent Bankrate survey of 2,386 U.S. adults found that 93 percent of respondents experienced higher prices than they are used to. Respondents indicated that food, gasoline, and dining were the categories with the most notable price increases.
Unfortunately, consumers are bearing the brunt of rising prices and interest rates. And while that’s not great news, we know that American consumers have withstood these storms before. From coupon cuts to discount shopping, there are some ways to soften the blow of inflation.
By using your credit cards strategically, you can get discounts on some of these common expense categories in which prices are rising. Here are some tips on how to use your credit card rewards to save on food and fuel.
Impact of inflation on food and fuel
How much are you spending on shopping and gas nowadays? The U.S. Bureau of Labor Statistics (BLS) shared its most recent data on consumer spending, revealing that U.S. households spend about $ 7,316 a year on food. The report drops to $ 4,942 for spending on food at home (as food) and $ 2,375 for spending on food away from home.
However, the USDA also reports that inflation has likely increased these averages quite a bit. According to its Food Price Outlook for 2022, the Consumer Price Index (CPI) for restaurant purchases rose 0.4 percent in February 2022 and was 6.8 percent higher than in January 2021 Grocery purchases in supermarkets or supermarkets increased by 1.4 percent from January 2022 to February 2022: 8.6 percent more than in February 2021.
In the BLS report, we see that average fuel spending was around $ 1,500 by 2020. But of course, that number will be much higher now that people are venturing back. According to the Kelly Blue Book, with an increase in gasoline of nearly $ 1.50 more per gallon, monthly gas spending could exceed an average of $ 247 per month, or $ 2,964 in annual spending for U.S. consumers.
Choose the right credit card to offset the price increase
While these price increases may seem disturbing, the good news is that credit cards can help. Many cards offer grocery rewards and grocery deliveries, dinners, and gasoline expenses.
In some cases, you may find a credit card that covers all three categories. If you don’t want to worry about which card to use for specific expenses, you can opt for a flat-rate cash back card that rewards you with the same cash-back rate on all expenses.
No matter which credit card you choose, you’ll be able to earn rewards for spending on food and fuel.
Top credit cards to consider for grocery shopping, grocery delivery, food, and gasoline spending
Best for Grocery Delivery: Chase Sapphire Preferred
With the Chase Sapphire Preferred® card, you get 3X points in online grocery shopping (excluding Target, Walmart and wholesale clubs), 3X points in dinner (including takeaway and eligible delivery services) and 3X points in certain streaming services . Plus, you’ll earn 5X points on booked trips through Chase Ultimate Rewards and Lyft travel (through March 2025), 2X points on general travel, and 1X standard points on everything else.
This Chase card includes other great benefits and credits, such as a 10% birthday points bonus and the ability to redeem your points for 25% more value when booking travel through the Ultimate Rewards portal. However, being able to save on both groceries and dinner with this card is a big deal. Plus, you can sign up for a free 12-month DoorDash DashPass subscription if you don’t already have one. Please note that any order you place for delivery will earn 3X points.
Best for Wholesale Clubs – Bank of America Custom Cash Rewards
Bank of America® Custom Cash Rewards credit card earns 3 percent cash back on purchases in your chosen category and 2 percent on supermarkets and wholesale clubs (up to $ 2,500 on combined 3 and 2% each quarter, after 1%)). If you are a member of Bank of America Preferred Rewards, you can earn up to 75 percent more cash back on all purchases.
This card is a great option for those who need more flexibility in spending categories, as it includes a 3% refund on a category of your choice (from six options) that you can change once a month. With this strategy, you can link your grocery earnings with rewards on purchases such as travel, home improvements, gasoline, online shopping, pharmacies, or restaurants, depending on your spending during the month.
Best for moderate grocery and gasoline spending: Amex Blue Cash Preferred
If you want to earn rewards for your grocery and gasoline expenses, the American Express Blue Cash Preferred® card is a great choice for both. You will earn a 6% cash rebate on U.S. supermarkets with up to $ 6,000 per year (then 1%) and a 6% rebate on certain U.S. live streaming subscriptions. You will also receive a 3% refund on US gas and public transportation expenses and 1% on all other purchases.
Amex Blue Cash Preferred is ideal if you have moderate grocery spending, as there is a $ 6,000 limit on grocery spending each year, which means a maximum of $ 360 in cash refund earnings in this category. Not only can you save on gas, but if you use public transportation, you’ll also save 3 percent on that expense.
Best for Flexible Rewards: Citi Custom Cash
The Citi Custom Cash Card doesn’t have a grocery or gasoline bonus category in itself, but this expense may be one of your main expense categories, which you get a 5% cash back refund on each billing cycle. After reaching $ 500 in a billing cycle, you’ll earn 1%.
Of course, the most important spending categories of many people are in food or fuel. For this reason, it would be relatively easy to reach $ 500 each month and earn a 5 percent return (which you will receive in the form of Citi thank you points, even though this card is marketed as a cash back card). These points can be redeemed for cash with a direct deposit, check or credit of the statement. You can also exchange your points for gift cards, travel through Citi, or eligible purchases on Amazon with Purchase with Points.
Best for Costco Buyers: Costco Anywhere Visa
Citi’s Costco Anywhere Visa® card offers a 4 percent rebate at gas stations for the first $ 7,000 a year (then 1 percent), plus a 3 percent rebate on eligible restaurants and travel purchases, a 2 percent refund on all Costco.com and Costco.com Purchases expenses and 1 percent refund on everything else.
This card is ideal for die-hard Costco customers, just because redeeming rewards is quite strict. You receive your rewards as a single credit card reward certificate, which can be exchanged once a year in February, in history only. If you frequent Costco enough, this card is still worth it.
For example, if you like wholesale clubs but are more of a Sam’s Club fan, it may be worth considering Sam’s Club® Mastercard®, as it offers a similar reward structure and redemption options.
Other savings strategies
Consider a rotating bonus category card
If you’re not specifically sold on any of the above cards, you may be interested in a revolving bonus category card such as Discover it® Cash Back, which offers a 5 percent cash rebate on rotating bonus categories each quarter (up to $ 1,500 in quarterly spending, then 1 percent). With this card, Gasoline and Target are the bonus categories for the second quarter (April 1 to June 30, 2022). To receive the 5 percent return, you must activate the category. If you’re interested in applying for your application, be sure to review the rest of the Discover 2022 refund schedule to plan for future categories in advance.
Double dive with cash back apps
This is a somewhat advanced strategy, not because it is complicated, but because it requires an extra step and some planning ahead.
There are a number of money back apps you can use to improve your shopping and gasoline discounts. Ibotta and Fetch rewards, for example, allow you to save money on groceries while still earning credit card rewards on those purchases. For gasoline, there are many loyalty programs, which are usually combined with your local grocery store, to help you save on pump while earning credit card rewards for your fuel spending.
Build a solid budget (if you haven’t already)
While not everyone’s favorite, one way to minimize the impact of rising prices on your finances is to set up a spending plan, and that doesn’t always require you to cut back on something.
You can move expenses or find ways to make extra money to make up for the shortfall. The point is to take stock of your expenses and find out what you can change to get better at the prevailing circumstances.
The starting point
Rising prices have been a part of our lives for a long time. However, with some planning and creativity, there’s a good chance you won’t feel the impact as much as you initially expected. Using the best credit cards for cash back rewards or points on groceries, meals, and gasoline spending, along with other financial strategies, is a good step in the right direction.