Got lots of hungry mouths to feed at home? The second quarter of 2018 could be a cash-back bonanza if you’re holding the Chase Freedom® or certain Discover cards, including the Discover it® - Cashback Match™.
That’s because grocery stores are a bonus category for those cards through June, meaning you can earn 5% cash back per dollar spent at the supermarket, up to a $1,500 quarterly cap. The Chase Freedom® also includes PayPal and Chase Pay as bonus categories, so the $1,500 cap is the total on all those purchases combined.
The grocery store cash-back category can be a little tricky to optimize — and perhaps even more so for someone who has both the Chase Freedom® and an eligible Discover card — so here are some tips to help.
Know the stores that don’t qualify
You’ll be eligible for bonus cash back if the merchant’s category code is labeled as a grocery store. But just because a store sells groceries doesn’t mean it qualifies. Here are some stores that won’t count:
- Big-box retailers. If you normally buy groceries at Walmart or Target, you may want to switch things up this quarter. The Chase Freedom® specifically identifies those two stores as exemptions, and Discover also notes that purchases made at supercenters or discount stores don’t qualify.
- Warehouse clubs. Wholesale retailers like Costco, Sam’s Club and BJ’s can be great for large families buying in bulk, but shopping there won’t earn you the bonus 5% cash back this quarter.
- Gas stations, convenience stores and drugstores. Not always ideal places to shop for groceries anyway, given their smaller, more limited and often higher-priced selections. But still, be aware you probably can’t earn the 5% cash-back bonus in these stores, either.
Just because a store sells groceries doesn’t mean it qualifies.
For more information, Chase includes a list of examples of grocers that do qualify, with fuller descriptions of stores that don’t. Discover cardholders can find additional fine print here. And note that Discover mentions another potential bonus roadblock: “Purchases made using tap-and-pay, mobile or wireless card readers, virtual wallets or similar technology may not be eligible.”
Also, for both the Chase Freedom® and your eligible Discover card, you’ll have to opt in or activate your bonus categories each quarter if you want to start earning 5% cash back on those purchases.
How to optimize your spending
Now that you know where to go, here are some cash-back strategies when you’re shopping at the grocery store:
Buy gift cards. Most supermarkets have racks of third-party gift cards for other retailers and restaurants. If you buy one, it’ll be rung up as a grocery purchase and earn you 5% cash back. So even if you don’t expect to hit your $1,500 quarterly cap by purchasing foodstuffs alone, gift cards can help push you over that line.
Even if you don’t expect to hit your $1,500 quarterly cap by purchasing foodstuffs alone, gift cards can help push you over that line.
Buy nonfood items. If you usually go to big-box stores for toiletries, cleaning supplies, magazines or other household items, consider switching over to your grocery store for the quarter — although you may want to price-check to make sure you’re actually saving money. Even with 5% cash back at grocery stores, it might still be better for your wallet to shop at a big-box retailer.
See if your mobile wallet can be a workaround. This won’t help Discover cardholders. But for Chase Freedom® users who still want to buy their groceries from a big-box retailer, see if that merchant accepts Chase Pay or PayPal. If it does, you can still earn your 5% cash-back bonus through those categories instead.
If you have both cards
If you have both the Chase Freedom® and an eligible Discover card, then things get even more interesting.
On one hand, it means your bonus-earning potential for the quarter is much higher. On the other hand, it also means your quarterly bonus spending cap is, too ($3,000 for two cards, as opposed to $1,500 for one). Even for large families, that’s a lot to spend on groceries in three months. But with some strategic planning and spending, it might work for you:
On the one hand, having both kinds of cards means your bonus-earning potential for the quarter is higher. On the other hand, it also means your quarterly bonus spending cap is, too.
When to prioritize your eligible Discover card
If you’re a new card member and you’re in your first year with a Discover card like the Discover it® - Cashback Match™, you’ll qualify for a cash-back match on all of the rewards you’ve earned that year. That means you’ll essentially get 10% back on your quarterly bonus category spending in the first year.
That’s a higher effective rate than what you can earn with the Chase Freedom®, so you might want to reach first for your Discover card.
When to prioritize your Chase Freedom® card
Keep in mind that grocery stores aren’t the only bonus category for this card this quarter. Since PayPal and Chase Pay also earn the bonus, consider using the Chase Freedom® solely at online merchants that accept those methods this quarter, while using your eligible Discover card only at the grocery store. (Note: PayPal might charge you a transaction fee for using the card to send money to friends and family.)
Regardless, remember that with either the Chase Freedom® or your eligible Discover card, not all of your spending has to be on groceries alone. Supermarkets sell more than just food (see the tips above), so you can make the local grocery store your go-to merchant for all kinds of items.
What to know about Chase Pay
While you’re likely already familiar with PayPal, you might be less acquainted with the Chase Freedom®’s other 5% cash-back-earning digital payment category this quarter: Chase Pay.
Chase Pay is a digital wallet that specifically caters to Chase cardholders. At online retailers that accept it, customers can click the Chase Pay icon that shows up at checkout and use their account login credentials to sign in and pay. Customers can also download the app to their phones and make payments with it at participating merchants.
Chase Pay is Chase-specific, so it only works with Chase credit cards. It’s also currently usable at only a limited number of retailers.
If you’re already in the Chase credit card ecosystem, Chase Pay can be an efficient and intuitive payment method, and an easy way to earn 5% cash back this quarter. But there are some potential drawbacks to keep in mind:
It’s not as widely accepted as Apple Pay or Google Pay. For starters, it’s Chase-specific, so it only works with Chase credit cards. It’s also currently usable at only a limited number of retailers — many of which accept Chase Pay only through their websites, not inside brick-and-mortar stores. Walmart.com is an example of a large retailer that allows customers to use Chase Pay online.
The acceptance process can be a bit involved. Take gas stations, for example. Some do accept Chase Pay, but you’ll have to find them. Consider whether it’s worth all of the steps listed on the Chase Pay FAQ page under “How do I pay at a gas station with Chase Pay app?” — or all the steps this user went through. It might be a lot simpler if you just swiped your card at the corner pump (even if that means forgoing bonus rewards).