Coffee addict? How card rewards can cut your caffeine costs


Routine coffee purchases may not efficiently rack up credit card miles for a free flight, but if caffeine is your kryptonite, cash-back card rewards can cut your costs.

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Routine coffee purchases may not efficiently rack up credit card miles for a free vacation flight, but if caffeine is your kryptonite, these expenses can boost you toward a larger reward goal.

The average American spends roughly $1,100 each year on coffee, which is about $3 a day, according to a 2017 Acorns Money Matters report. For those who love lattes or brewing high-priced, single-origin coffee beans at home, annual coffee expenses may be even higher. All purchases add up over time, so why not earn card rewards to offset your coffee spending??

“There’s a way to save no matter your preferred way of acquiring your beloved coffee,” said Lisa Rowan, personal finance expert at The Penny Hoarder.

Here’s how to maximize credit card reward earnings on your coffee expenses, big or small:

Which cards to use where?

“The best thing you can do when buying coffee or any product is use the highest cash back credit card possible,” said Jason Wuerch, founder and author behind Frugal For Less, a personal finance blog focused on saving money and maximizing income.

Review the rewards and benefits of your cards to determine which offer the sweetest deals, then make a couple of purchases to ensure the rewards pan out as expected, Rowan suggests. If all goes well, default to that card for future coffee purchases.

A little extra research can go a long way. Not all credit card reward programs are created equal and depending on where and how you buy coffee, understanding how cards reward your expenses will maximize your earnings.

“Make a list of what you normally like to purchase and where you like to make those purchases, then find a card that best fits your needs,” Wuerch added. “It might help to map out your expenses for a few weeks to see where you’re spending the most money.”

Based on where you spend the most money on coffee, here’s what types of cards you should use on each purchase:

“Don’t forget to pair the right card with whatever loyalty program your favorite coffee shop offers, whether it’s a punch card, app or barcode.”

Grocery stores

If you buy most of your coffee-related goods at U.S. supermarkets or wholesale clubs, the most lucrative rewards cards to use will likely be a cash back card that offers at least 3 percent back on such transactions, such as the Blue Cash Everyday® Card from American Express. If you have a points card that doubles or triples earnings on grocery purchases, such as the PenFed Platinum Rewards Visa Signature card (3 points per dollar spent on groceries), that may be a good option, too.

However, this is when card comparisons and a little math pays off, as some cards offer even heftier grocery store rewards. The Blue Cash Preferred® Card from American Express offers 6 percent cash back on U.S. supermarket purchases (up to $6,000 in purchases per year, then 1 percent). New cardholders also benefit from a 0 percent purchase APR for 12 months (regular variable APR of 14.49 percent to 25.49 percent thereafter) and get a $250 statement credit after spending $1,000 in the three months.

Your potential savings: If you buy $20 a week on coffee-related items at a U.S. supermarket using the Blue Cash Preferred card, your annual coffee expense total of $1,040 will earn you $62.40, plus the $250 statement credit bonus if you’re a new cardholder.


If you get your caffeine fix on-the-go from cafes, pay with a card that offers a high rate of rewards on restaurant purchases. “A coffee shop most likely counts as a restaurant.” Rowan said.

However, before assuming your card will read a local hipster coffee hangout purchase as a restaurant expense and reward you accordingly, double-check the card terms or call your issuer to find out how the establishment is coded.

See related:How to find a business’s merchant category code

Once you know your purchases are coded as a restaurant expense, select the best card to use or apply for a new one. Cash back cards with rotating bonus categories, such as the Discover it® Cash Back card or the Chase Freedom cards, can maximize your cafe cash back earnings, even if temporarily. For example, the Discover it Cash Back card offers 5 percent back on all restaurant purchases July-September once you activate (up to $1,500 spend each quarter, then 1%).

With the Discover it® Cash Back card, if you spent $5 a day on coffee from your favorite each day during that bonus period, you’d get $23 back on those coffee purchase alone, which would be matched at the end of your first year as a cardholder, bringing those 92 days of coffee reward earnings to $46.

To reap rewards on coffee throughout the year, use a rewards credit card that favors food purchases above all else, such as the Uber Visa card from Barclays. This card offers 4 points per dollar on restaurants, takeout and bars, including UberEATS. New cardholders also get a $100 bonus after spending $500 in the first 90 days.

Your potential savings: With the Uber Visa card, if you spend $5 on a Starbucks latte five days a week – you’d earn 5,220 points on these purchases, a $52.20 value that could be redeemed for UberEATS credits, cash back or gift cards.

Online retailers

If  you shop for coffee online, there are more rewards cards to choose from.

If you’re an Amazon Prime member, the Amazon Prime Rewards Visa Signature card from Chase offers 5 percent back on all purchases. Other retail loyalty programs may indicate which branded cards could offer larger rewards on coffee-based purchases, so long as you pay balances off in full each month, as store-branded credit cards typically have high interest rates.

For example, Target’s in-store coupon and discount program, Cartwheel, used in conjunction with the Target REDcard, which offers 5 percent back on in-store purchases and free online shipping from, is another such pairing.

To reap rewards on coffee purchases from online retailers, you also could use a general cash back card that earns money back on each transaction. Citi’s Double Cash Card offers 2 percent back on all purchases, 1 percent back upfront and another 1 percent when you pay the bill.

When shopping for coffee online, check your card issuer’s shopping portals to see if you can earn reward bonuses in addition to standard cash or points back by shopping coffee-carrying retailers there.

For example, if you buy coffee beans from via Chase’s Ultimate Rewards portal with a Chase Sapphire Preferred card, you’ll earn 3 points per dollar. If you were to pick up your coffee from a brick-and-mortar Walmart store, however, you’d only get 1 point per dollar.

What about the Starbucks Rewards Visa card?

In early 2018, Chase and Starbucks released the Starbucks Rewards Visa card, which may sound like a no-brainer for those seeking coffee and credit card rewards.

Starbucks Rewards Visa cardholders earn 1 Star for every $4 spent outside Starbucks stores and up to 3 Stars for every $1 spent in stores. Stars can only be redeemed at Starbucks and the card touts a $49 annual fee, which diminishes its value, said Wuerch.

“You’d need to spend $925 at Starbucks per year to cover the annual fee,” he said. “Since 25 stars is roughly related to $1 and I’d get 1 star for every $4 spent on non-Starbucks purchases, I’d have to spend $100 to get 25 stars. This means I’m basically getting 1 percent cash back. If I only use the card at Starbucks, I’m getting 33.3 stars per $100 spent, which is about 1.32 percent cash back.

“Why use this card when there are plenty of 1.5 to 2 percent cash back credit cards on the market, or credit cards that give you more in airline miles?”

The Starbucks credit card does offer 2,500 Bonus Stars to new cardholders who spend $500 in the first three months from account opening and another 250 stars when the credit card is used to load money onto your Starbucks app, but both reward opportunities are designed for Starbucks lovers who are just seeking more product, not flexible rewards or cash back.

While the new cardholder bonus reward offering is worth 20 Starbucks food and drink freebies, “You do have to pay a $49 annual fee, and all the benefits you accrue can only be used at Starbucks,” The Penny Hoarder’s Rowan explained. “It’s up to you to decide whether you want to double-down on your super-fan status, or have rewards that can be used more flexibly at a variety of retailers.”

Combine rewards, savings options when you can

Once you’ve dubbed a credit card your “coffee card,” there are even more ways to save:

  • Free loyalty reward programs
    If you aren’t using the Starbucks Visa card, you should still have the Starbucks Barista app to scan your free rewards card when make a purchase.

    “Don’t forget to pair the right card with whatever loyalty program your favorite coffee shop offers, whether it’s a punch card, app or barcode,” Rowan said.Starbucks, Dunkin Donuts and Panera Bread are all major coffee retailers with free customer loyalty programs.
  • Subscription and auto-ship service
    Some online retailers offer discounts to those who subscribe to routine shipments of products. Sign up for such a service with a strategically chosen rewards card as payment to keep coffee resources stocked and rewards slowly rolling in.“If you’re ordering coffee beans or grounds online (Amazon Subscribe & Save, Target Restock, Jet), check a retailer’s subscription or auto-ship services,” Rowan added. “Along with your rewards payment card, these services can slice a bit off your tab.”
  • Online savings tools
    Use apps such as Ebates and Ibotta in partnership with your credit card to earn even more money back on top of standard card rewards.Both tools allow users to register purchases and shop in-app through major retailers to earn cash back on everyday items, including coffee. You can then use your earnings to help pay down your rewards card balance.

“The most important thing to keep in mind is that there are a lot of little things you can do to save on coffee that all add up – and they never take as long as you think once you get used to the process,” Wuerch said.


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The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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