Maximizing Your Grocery Store Credit Card Rewards

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Understanding Merchant Category Codes

Merchant Category Codes (MCCs) are four-digit numbers that classify businesses by type. Developed by the IRS, these codes help track payment processing charges and determine bonus rewards on purchases. Each merchant accepting credit cards has a category code, either self-designated or assigned by the payment network. Credit card issuers do not choose MCCs, but you can call your credit card issuer to check the MCC of a given business.

What Qualifies as a Grocery Store?

Grocery stores are typically located in the United States and have MCCs identifying them as grocery stores or supermarkets. These can range from small, independent stores to large chains. For a purchase to be eligible for grocery-category credit card rewards, the business must be classified as a grocery store or supermarket. Grocery store purchases might also include grocery delivery, but it’s essential to read the terms to understand what constitutes a grocery purchase.

What Does Not Qualify as a Grocery Store?

Convenience stores, superstores, discount stores, warehouse clubs, and meal-kit delivery services generally do not fall under the grocery store category. Drugstores that sell food are also typically excluded. However, there are differences among card issuers, so it’s wise to read the fine print on your credit card agreement. Stores may have multiple MCCs, and purchases from grocery-store-branded pharmacies and gas stations do not generally count as grocery purchases.

Maximizing Grocery Store Rewards

Understanding where you shop, your willingness to pay an annual fee, and the effort you’re willing to make can help you choose the best grocery store credit card. Whether you’re looking for points, miles, or cash back, it’s crucial to read the fine print and understand what qualifies.

Customize Your Rewards

If you shop at superstores or warehouses, consider a card that allows you to customize rewards. You could pick your store and get up to 3% cash back or find a store credit card offering up to 5% back when you shop at that particular store.

Activate Rotating Bonus Categories

If you have credit cards with rotating bonus categories, activate the bonus categories each quarter. Use a sticky note on your credit cards to remind yourself which card(s) to use. Most have a quarterly maximum of $1,500 in combined purchases for bonus categories.

Consider a Card with an Annual Fee

You may be able to get a cash back card that pays up to 6% cash back for groceries all year long. While there will be an annual maximum on eligible grocery store purchases, it could be worthwhile depending on your spending habits.

The Bottom Line

Used strategically, rewards cards can help you stretch your grocery budget or earn rewards. Understanding your credit card issuer’s definition of a grocery purchase is crucial. You might already have a rewards card that will serve you well when you buy groceries. Activating bonus categories or matching a store credit card to the store where you buy groceries may be one way to save.

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