There’s no denying that alarming inflation rates are having an impact on how far your dollar is going these days. A recent Bankrate poll of 2,386 U.S. adults revealed 93 percent of those surveyed have experienced higher prices than they’re accustomed to. Survey respondents reported grocery, gas and dining as categories with the most noticeable price hikes.
Unfortunately, consumers are bearing the brunt of rising prices and interest rates. And though this isn’t great news, we know American consumers have weathered these storms before. From coupon clipping to discount shopping, there are a few ways to soften the blow of inflation.
By using your credit cards strategically, you may be able to garner discounts on some of those 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 spending.
Inflation’s impact on food and fuel
How much are you spending for groceries and gas nowadays? The U.S. Bureau of Labor Statistics (BLS) shared its most recent data on consumer spending, revealing American households are spending about $7,316 per year on food. The report breaks that figure down to $4,942 for spending on food at home (such as groceries) and $2,375 for food spending away from home.
However, the USDA also reports that inflation has likely increased these averages quite a bit. According to its Food Price Outlook for 2022, the Consumer Price Index (CPI) for restaurant purchases increased 0.4 percent in February 2022 and was 6.8 percent higher than in January of 2021. Grocery store or supermarket food CPI purchases increased 1.4 percent from January 2022 to February 2022—8.6 percent higher than February 2021.
In the BLS report, we see fuel spending averages were around the $1,500 mark for 2020. But, of course, that number will be much higher now that people are venturing out again. With gas up nearly $1.50 more per gallon, according to Kelly Blue Book, monthly gas spending could top out at an average of $247 a month, or $2,964 in annual spending for American consumers.
Choose the right card credit card to offset rising prices
Although these price increases may seem unsettling, the good news is that credit cards can help you out. Plenty of cards offer rewards on groceries and grocery delivery, dining out and gas spending.
In some cases, you may find a credit card that covers all three categories. If you don’t want the hassle of tracking which card to use for specific spending, you could opt for a flat-rate cash back card that rewards you the same rate of cash back on all spending.
No matter which credit card you choose, you’ll be able to earn rewards on the food and fuel spending you would’ve done anyway.
Top credit cards to consider for grocery, grocery delivery, dining and gas spending
Best for grocery delivery: Chase Sapphire Preferred
With the Chase Sapphire Preferred® Card, you’ll get 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 travel booked through Chase Ultimate Rewards and on Lyft rides (through March 2025), 2X points on general travel and the standard 1X points on everything else.
This Chase card comes with other great benefits and credits, like a 10 percent anniversary point bonus and the ability to redeem your points for 25 percent more value when booking travel through the Ultimate Rewards portal. However, the fact that you can save on both groceries and dining with this card is a big deal. Plus, you could be eligible for a free 12-month DoorDash DashPass membership if you don’t already have one. Note, any order you place for delivery will still earn 3X points.
Best for wholesale clubs: Bank of America Customized Cash Rewards
The Bank of America® Customized Cash Rewards credit card earns 3 percent cash back on purchases in your category of choice and 2 percent back at grocery stores and wholesale clubs (up to $2,500 in combined 3 and 2 percent category purchases each quarter, then 1 percent). If you’re a Bank of America Preferred Rewards member, you can earn up to 75 percent more cash back on all purchases to boot.
This card is a great choice for those who need more flexibility on spending categories, as it comes with 3 percent back in one category of your choice (from six options) that you can change once per month. With this strategy, you can pair your grocery earnings with rewards on purchases such as travel, home improvement, gas, online shopping, drugstores or dining, based on what matches your spending for the month.
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 percent cash back at U.S. supermarkets on up to $6,000 per year (then 1 percent back) and 6 percent back on select U.S. streaming subscriptions. You’ll also get 3 percent back on U.S. gas station and transit spending and 1 percent back on all other purchases.
The Amex Blue Cash Preferred is ideal if you have moderate grocery spending, since there’s a $6,000 cap on grocery spending each year—meaning a maximum of $360 in cash back earnings within that category. Not only can you save on gas, but if you use public transportation, you’ll earn 3 percent back on that spending as well.
Best for flexible rewards: Citi Custom Cash
The Citi Custom Cash℠ Card doesn’t have a bonus category for groceries or gas, per se, but this spending can be one of your top eligible spending categories, which fetches 5 percent cash back each billing cycle. After you’ve hit the $500 in spend in a billing cycle, you’ll earn 1 percent back.
Naturally, many people’s top spending categories fall under food or fuel. For this reason, it would be relatively easy to hit $500 each month and earn 5 percent back (which you’ll receive in the form of basic Citi ThankYou points, despite this card being marketed as a cash back 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 through Citi or eligible purchases on Amazon with Shop with Points.
Best for Costco shoppers: Costco Anywhere Visa
The Costco Anywhere Visa® Card by Citi offers 4 percent cash back at eligible gas stations on the first $7,000 in spending per year (then 1 percent), plus 3 percent back at restaurants and on eligible travel purchases, 2 percent back on all Costco and Costco.com purchases and 1 percent back on everything else.
This card is ideal for die-hard Costco customers, only because redeeming rewards is pretty strict. You receive your rewards as a single credit card reward certificate, which can be redeemed once a year in February, in-story only. If you frequent Costco enough, this card might still be worth it.
If you’re into wholesale clubs but are more of a Sam’s Club fan, 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 aren’t 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 percent cash back on rotating bonus categories each quarter (on up to $1,500 in spending per quarter, then 1 percent). With this card, gas and Target are the bonus categories for Q2 (April 1 through June 30, 2022). To receive 5 percent back, you must activate the category. If you’re interested in applying, be sure to review the rest of Discover’s 2022 cash back calendar in order to plan ahead for future categories.
Double dip with cash back apps
This is somewhat of an advanced strategy—not because it’s complicated, but because it requires an extra step and some planning ahead.
There are a number of cash back apps you can use to deepen your grocery and gas discounts. Ibotta and Fetch Rewards, for example, allow you to save money on groceries while still earning credit card rewards on those purchases. For gas, there are plenty of loyalty programs, usually paired with your local grocer, to help you save at the pump while still earning credit card rewards on your fuel spending.
Put together a solid budget (if you haven’t already)
Although it’s no one’s favorite thing to do, 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 out.
You may be able to move expenses around or find ways to make extra money to make up for the shortfall. The point is to take stock of your spending, and figure out what you can change to fare better in the prevailing circumstances.
The bottom line
Rising prices have long been a part of our lives. However, with some planning and creativity, there’s a good chance you won’t feel the impact as much as you initially anticipated. Using the best credit cards for cash back rewards or points on groceries, dining and gas spending, along with other financial strategies, is a good step in the right direction.