Slimming down the diverse menu of available restaurant credit cards to select which works best for your wallet can be an intimidating task. Asking yourself the following can be a great launch point to help you decide whether a dining card suits your rewards strategy:
How often do I eat at or order from restaurants versus eating at home?
It isn’t hard to justify a dining credit card since many offer broad category coverage with no annual fee to account for, so asking yourself “How often do I eat out?” isn’t the best measure of whether a restaurant-oriented card will come in handy. Instead, it’s better to compare your budget for groceries and find your ideal card’s rewards category balance based on where you get most of your food.
If the overwhelming majority of your food is grocery purchases, then a grocery card like the Blue Cash Preferred® Card from American Express will be a more lucrative option since it earns 6 percent cash back at U.S. supermarkets (up to $6,000 in purchases per year, then 1 percent). On the other hand, a premium dining card like the Amex Gold or the Capital One Savor (if you aren’t a big traveler) is a better fit if you avoid cooking whenever possible.
However, the Capital One SavorOne is a great middle ground if you hit grocery stores and restaurants roughly equally because of its equal 3 percent cash back on dining and grocery store purchases (excluding superstores like Walmart and Target).
Where do I make my dining purchases?
Dining bonus categories generally cover a similar spread of merchants, but it’s important to consider each card’s fine print when it comes to picking the right restaurant rewards card. For instance, you might want to consider the SavorOne over the Freedom Unlimited if you drop into your local bakery every morning since Capital One’s dining category specifically covers bakeries while Chase’s dining category specifically excludes these merchants.
However, the Freedom Unlimited may be a better choice if your routine includes getting lunch from restaurants in hotels, wholesale clubs or supermarkets since its boosted 1.5 percent general spending category will cover these purchases while typical dining categories won’t.
What are my biggest expenses besides dining?
Quite a few restaurant credit cards offer additional bonus categories for other popular expenses besides dining, so the most valuable card may reward another one of your biggest categories. To give you an idea, frequent flyers and transit travelers will likely milk more rewards from the Chase Sapphire Preferred thanks to its focus on travel-related categories. Meanwhile, the Chase Freedom Unlimited is better at pharmacies in addition to dining due to its twin 3 percent drugstore category.
What kind of rewards do I prefer, and how do I want to earn them?
Considering the goal of any rewards card is to earn as many rewards as your normal spending habits allow, it’s important to decide what you want from your rewards and how much work you’re willing to invest. Naturally, the Chase Sapphire Preferred and American Express Gold are better choices than a cash back card if you want to use your rewards to fund future trips. On the other hand, a cash back card is better if you want a bit more flexibility from your rewards but you’ll mainly use them to offset your daily spending.
Many dining card rewards programs are designed around tiered bonus categories — especially if you want travel rewards — but cash back can work differently based on your program preferences. Flat-rate cards are perfect if you want a streamlined experience without juggling bonus categories, and a few cards like the Capital One SavorOne and Bank of America Customized Cash allow you to simplify the process further by setting your cash back to redeem automatically after reaching certain criteria.
If you prefer flexibility and dining isn’t always your biggest expense, a few cards allow you to choose monthly or quarterly bonus categories like the Customized Cash and the U.S. Bank Cash+. Some cards reward dining with rotating quarterly categories, such as the Chase Freedom Flex℠, which supplements your balance with boosted cash back on popular seasonal expenses.