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Looking for a credit card that offers cash back for groceries? Check the fine print

What to watch out for with grocery shopping rewards cards
What to watch out for with grocery shopping rewards cards 02:12

BOSTON - When considering applying for a credit card, you want to make sure that a new piece of plastic is going to be worth your while.

Once the gears start turning, you might think about travel, dining or even gas rewards. But there is another type of rewards card a consumer expert says you should also be considering.

According to The U.S. Bureau of Labor Statistics, the average American household spends $5,259 annually on groceries. Now, figure in the highest cash-back earnings rate - which Lending Tree found to be 6% - and you could be looking at up to $315.54 a year in rewards for grocery shopping.

But when it comes to maximizing the rewards or cash-back you actually receive, the devil is in the details.

"A bunch of cards that are out there, they give grocery rewards specifically exclude places like Walmart or Target or Sam's Club or Costco - some of the biggest grocery sellers in this country," said Matt Schulz, chief credit analyst of Lending Tree.

Schulz said the most important things to keep in mind are:

  • Where you buy your groceries.
  • The type of groceries you buy (brand name vs. store brand).
  • What type of purchase you're making (online vs. in-store).

"The biggest thing you need to know with a grocery rewards credit card is whether you will be able to get those extra rewards where you shop most for groceries. It sounds like a super basic point, but it's really important because some of the most popular grocery rewards credit cards out there don't give you those extra rewards for grocery purchases made at some of the big grocery sellers in this country," Schulz explained.

The bottom line here: It's important to not only understand the card you're applying for but your spending habits as well. If you're trying to just keep it simple, and you're looking for a good earnings rate on purchases across the board, Schulz suggests a card that offers 2% cash back on everything. 

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