Use your credit card rewards to minimize the impact of inflation


There’s no denying that alarming inflation rates are impacting your dollar’s performance these days. A recent Bankrate poll of 2,386 American adults found that 93% of respondents experienced higher prices than they are used to. Survey respondents indicated that groceries, gas and restaurants 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 good news, we know American consumers have weathered these storms before. From cutting coupons to discounted purchases, there are several ways to soften the blow of inflation.

By using your credit cards strategically, you may be able to get discounts on some of these common spending categories where prices are rising. Here are some tips on how you can use your credit card rewards to save on food and fuel expenses.

The impact of inflation on food and fuel

How much do you spend on groceries and gas today? The US Bureau of Labor Statistics (BLS) has shared its latest Data on consumer spending, revealing that US households spend about $7,316 a year on food. The report breaks that figure down to $4,942 for food expenses at home (like groceries) and $2,375 for food expenses outside the home.

However, the USDA has also reports that inflation has probably increased these averages a bit. According to its 2022 Food Price Outlook, the consumer price index (CPI) for restaurant purchases rose 0.4% in February 2022 and was 6.8% higher than in January 2021. February 2022: 8.6% more than in February 2021.

In the BLS report, we see the average fuel spend hovering around the $1,500 mark for 2020. But, of course, that number will be much higher now that people are venturing out again. With gasoline up nearly $1.50 more per gallon, according to Kelly’s Blue Bookmonthly gasoline spending could average $247 per month, or $2,964 in annual spending for US consumers.

Choose the right credit card to offset the price hike

While these price increases may seem troubling, the good news is that credit cards can help. Many cards offer rewards on groceries and grocery delivery, restaurant dining, and gas spending.

In some cases, you can find a credit card that covers all three categories. If you don’t want to have to track which card to use for specific expenses, you can opt for a flat rate rebate card that rewards you with the same rebate rate on all expenses.

Whichever credit card you choose, you’ll be able to earn rewards on the food and fuel expenses you would have had anyway.

Top credit cards to consider for groceries, grocery delivery, meals, and gas expenses

Best for Grocery Delivery: Chase Sapphire Preferred

With the Chase Sapphire Preferred® Card, you’ll earn 3X points on online grocery purchases (excluding Target, Walmart and wholesale clubs), 3X points on dining (including takeout and eligible delivery services) and 3X points on select streaming services. Plus, you’ll earn 5X points on trips booked through Chase Ultimate Rewards and on Lyft rides (through March 2025), 2X points on general trips, and standard 1X points on everything else.

This Chase card comes with other great perks and credits, like a 10% birthday points bonus and the ability to redeem your points for 25% more value when booking travel through the Ultimate portal. rewards. However, the fact that you can save on groceries and meals with this card is a big deal. Additionally, you may be eligible for a free 12-month DoorDash DashPass subscription if you don’t already have one. Note that any order you place for delivery will still earn 3X points.

Best for Wholesale Clubs: Custom Bank of America Cash Rewards

The Bank of America® Customized Cash Rewards Credit Card earns 3% cash back on purchases in the category of your choice and 2% back at grocery stores and wholesale clubs (up to $2,500 in combined purchases of categories 3 and 2% each quarter, then 1%). If you’re a Bank of America Preferred Rewards member, you can earn up to 75% extra cash back on all your purchases.

This card is a great choice for those who need more flexibility on spending categories, as it comes with a 3% discount in a category of your choice (from six options) which you can change once a week. month. With this strategy, you can combine your grocery income with rewards on purchases such as travel, home improvement, gas, online shopping, pharmacies, or restaurants, depending on what fits your needs. monthly expenses.

Best for Moderate Grocery and Gas Spending: Amex Blue Cash Preferred

If you’re looking to earn rewards on your grocery and gas spending, the Blue Cash Preferred® card from American Express is a great option for both categories. You’ll earn 6% cash back at US supermarkets on up to $6,000 a year (then 1% back) and 6% back on select US streaming subscriptions. You’ll also get 3% cash back on gas station and public transit spending in the US and 1% cash back on all other purchases.

The Amex Blue Cash Preferred is ideal if you have moderate grocery spending, as there is a $6,000 cap on grocery spending each year, which means a maximum of $360 cash back. silver in this category. Not only can you save on gas, but if you use public transport, you’ll also save 3% on those expenses.

Best for Flexible Rewards: Citi Custom Cash

The Citi Custom Cash℠ card does not have a bonus category for groceries or gas, but these expenses can be one of your main eligible spending categories, which earns 5% cash back each cycle of billing. After you hit $500 spend in a billing cycle, you’ll earn 1% back.

Understandably, many people’s top spending categories are food or fuel. Because of this, it would be relatively easy to reach $500 every month and earn 5% back (which you’ll receive in the form of basic Citi ThankYou points, although this card is marketed as a cashback card). These points can be redeemed for cash with a direct deposit, check or statement credit. You can also redeem your points for gift cards, travel via Citi, or qualifying purchases on Amazon with Shop with Points.

Best for Costco shoppers: Costco Anywhere Visa

Citi’s Costco Anywhere Visa® Card offers 4% cash back at eligible gas stations on the first $7,000 in annual spend (1% thereafter), plus 3% cash back at restaurants and on grocery purchases. eligible travel, 2% back on all Costco and purchases, and 1% back on everything else.

This card is ideal for die-hard Costco customers, only because the redemption of rewards is quite strict. You receive your rewards in the form of a single credit card reward certificate, which can be redeemed once a year in February, in history only. If you frequent Costco enough, this card might be worth it.

If you love wholesale clubs but are more of a fan of Sam’s Club, for example, the Sam’s Club® Mastercard® might be worth considering, as it offers a similar rewards structure and redemption options. .

Other Money Saving Strategies

Consider a rotating bonus category card

If you’re not particularly sold on any of the cards above, you might be interested in a rotating bonus category card like the Discover it® Cash Back, which offers 5% cash back on bonus categories quarterly (up to $1,500 in spending per quarter, then 1%). With this card, Essence and Target are the bonus categories for Q2 (April 1 through June 30, 2022). To receive 5% back, you must activate the category. If you’re interested in applying, be sure to check out the rest of the Discover 2022 cashback schedule to plan ahead for future categories.

Double dip with cash back apps

It’s sort of an advanced strategy, not because it’s complicated, but because it requires an extra step and some planning ahead of time.

There are a number of cash back apps you can use to deepen your grocery and gas discounts. Ibotta and Collect rewards, for example, allow you to save money on groceries while still earning credit card rewards on those purchases. For gas, there are many loyalty programs, usually associated with your local grocer, to help you save at the pump while still earning credit card rewards on your gas spend.

Build a solid budget (if you haven’t already)

While it’s not anyone’s favorite thing, 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 something.

You may be able to shift expenses or find ways to earn extra money to make up for the shortfall. The goal is to take stock of your spending and figure out what you can change to do better in the current circumstances.

The bottom line

Rising prices have long been part of our lives. However, with a little planning and creativity, chances are you won’t feel the impact as much as you originally anticipated. Using the best credit cards for cash back or points on groceries, meals, and gas, along with other financial strategies, is a good step in the right direction.


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