The Best Credit Card For Earning Cash Back When Grocery Shopping

Did you know most average adult households spend thousands of dollars each year on groceries? Yes, thousands — even single-person households on a thrifty budget. Grocery prices have changed the way we shop, and while this is in no way financial advice, the cash back reward program of the American Express Blue Cash Preferred credit card may put a few hundred dollars back in your wallet to balance out the thousands you might be spending.

The American Express Blue Cash Preferred card offers a generous 6% cash back reward on grocery purchases of up to $6,000 dollars each calendar year at supermarkets in the United States. According to Ramsey Solutions, the average family of four (two children between six to 11 years old and two adults), spends an estimated $996 per month on groceries — even if they're thrifty shoppers (and here's a list of the best grocery stores for the budget-minded) — which translates into an annual cost of $11,952. If they were to use the Blue Cash Preferred Card, they would receive the maximum cash back amount of $360 within six months.

Single-person shoppers would also receive a comparable cash back reward. Grocery expenses of approximately $483 a month (or $5,796 annually) will earn $347, although they won't reach the full cash back threshold for $6,000 spent on groceries. But the benefits of using the Blue Cash Preferred Card for grocery purchases don't end there.

Cardholders who earn the 6% cash back limit on $6,000 of groceries before the end of a calendar year will still receive 1% cash back on grocery purchases thereafter. Additionally, cardholders who spend $3,000 on purchases — including but not limited to grocery purchases — within the first six months of opening the card will also receive $250 cash back.

Now, let's discuss the drawbacks. With every credit card, there are terms and conditions, rates, fees, and interest involved. If you're a fan of buying your groceries in bulk at stores like Sam's Club or Costco, cash back rewards are not given for purchases at these locations, or at convenience stores, superstores like Walmart, and meal-kit delivery services (even ones that might help you cook).

Cash back is rewarded through statement credits or can be used for eligible items on Amazon. While there's no fee to open the card, an annual card membership fee of $95 is automatically charged after the first year. Similarly, the Blue Cash Preferred Card's interest rate is reflected in its variable APR (Annual Percentage Rate) of 0% for the first 12 months from the day the card is opened, and then ranges from 20.24% to 29.24% based on an individual's creditworthiness. The card also includes fees for certain transactions, such as balance transfers, cash advances, and foreign purchases, as well as penalty charges for late or returned payments. If you pay off your balance monthly, this card could be rewarding — especially if cash back outweighs the annual fee.