Why you might want to have two grocery rewards credit cards

Citi is an advertising partner.

Excluding expenses that aren’t usually practical to put on a credit card — like mortgage or rent payments, car payments and taxes — there’s a good chance that groceries are your top credit card spending category, especially if you have kids at home.

In 2022, the average household spent an average of $5,703 on “food at home” (essentially, groceries), according to the Bureau of Labor Statistics. But the bigger your family, the more you’re likely to spend. For instance, I have two school-aged daughters, and my family of four spends more than double the national average on groceries in a typical year.

My favorite grocery rewards card

I use the Blue Cash PreferredⓇ Card from American Express to get 6 percent cash back at U.S. supermarkets. The catch, unfortunately, is that there’s a $6,000 annual cap on the 6 percent payout. The return drops to 1 percent after that. I still love this card and find the $95 annual fee well worth it, but I wish the cap were higher. I tend to hit it by the middle of the year.

I earn $360 by maxing out the $6,000 grocery category, plus the card has other benefits such as 6 percent cash back on select streaming subscriptions and 3 percent cash back on public transit and at U.S. gas stations. But my biggest pet peeve in the credit card world is that most rewards caps haven’t been adjusted for inflation in many years, if ever.

The Blue Cash Preferred, for example, has had the same $6,000 cap since the card debuted in 2012. Adjusted for inflation, $6,000 in 2012 equates to about $8,000 today, according to the Bureau of Labor Statistics. Alas, rewards caps have been stagnant across the industry, so instead of waiting for the limit to be raised, a better option (if you spend more than $6,000 on groceries each year, like I do) may be to take matters into your own hands by signing up for a second grocery rewards credit card.

How to decide which grocery rewards card to add

There are two different ways to add a new grocery rewards card to your wallet. The most lucrative, especially if you’d max out a second $6,000 cap (or come close), is to sign up for a second Blue Cash Preferred in your spouse’s name. This is a totally legit strategy that leads some people in the points and miles world to joke that the best part about being married is having a “player two” to rack up more rewards. (You don’t even need to be married to take advantage — the strategy applies if you split your finances with a partner, roommate, etc.)

Additional grocery rewards cards to consider

The Citi Custom CashⓇ Card gives 5 percent cash back on each cardholder’s top eligible spending category each monthly billing cycle (up to $500 in purchases, which not coincidentally adds up to $6,000 annually). Groceries are one of the options. Other purchases, including those beyond the $500 monthly limit, earn 1 percent cash back. A nice thing about this card is that the category can change every month, and it’s calculated automatically, so you don’t need to opt in or preselect anything.

I’m also intrigued by the TD Cash Credit Card*. This is a “choose your own adventure” card that requires you to pick a 3 percent and 2 percent cash back category each quarter (other purchases earn 1 percent back).

While that obviously isn’t as high as the aforementioned 6 percent or 5 percent back, there are two things I especially like about this card. One is that the card doesn’t have a spending cap on any of those rewards categories. The other is that new cardholders get an additional 3 percent back on groceries in their first six months with the card (that offer has a spending cap of — you guessed it — $6,000).

If you’re a new cardholder who selects groceries as your 3 percent rewards category, that will increase to 6 percent back on up to $6,000 in eligible spending during those first six months. If you set groceries as your 2 percent category, you’ll get 5 percent back for six months (up to the $6,000 cap). And if you pick something else for the 3 percent and 2 percent categories, leaving groceries as part of the standard 1 percent back on “everything else,” you’ll still get 4 percent cash back on up to $6,000 in grocery spending within those first six months.

Even if these cards aren’t a fit, there are plenty of other options on our list of the best credit cards for groceries.

The bottom line

Your credit card rewards strategy will be most lucrative when you maximize your top spending categories. If a rewards cap is getting in the way, work around it by adding a second card that emphasizes that type of spending — groceries, in my case. As long as you pay in full and avoid overspending, credit card rewards represent free money.

Have a question about credit cards? Email me at ted.rossman@bankrate.com and I’d be happy to help.

Information about the TD Cash Credit Card has been collected independently by Bankrate. Card details have not been reviewed or approved by the issuer.