How to offset pharmacy expenses by using credit cards


Cash back, rewards and travel cards can help bear the cost of pharmacy expenses. The choice will depend on where you usually shop for pharmaceuticals.

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If you have to pay for your prescriptions, why not earn rewards points or cash back bonuses?

Prescription medications aren’t cheap. The Organization for Economic Cooperation and Development said that U.S. consumers spent an average of $1,112 on them in 2014. How high is that? People in Canada spent the next highest on prescription drugs, just $772 a person.

If you use a credit card to buy your monthly supply of medications, you can get a boost in the cash back or rewards points you earn. Those pharmaceutical purchases add up, after all.

Unfortunately, there are not many credit cards out there that provide rewards points or cash back bonuses tied directly to pharmaceutical or drugstore purchases. This means you’ll have to get creative.

Making pharmacy purchases at the the grocery store

Sarah Silbert, points and miles editor with The Points Guy, said that the best card to use for pharmacy purchases depends on where you buy your medications.

Silbert recommends using credit cards to buy pharmaceuticals at grocery stores or supermarkets to rack up cash back bonuses and rewards points quickly.

There are plenty of these to choose from. Among them:

  • Blue Cash Preferred® Card from American Express: 6 percent cash back at U.S. supermarkets on up to $6,000 worth of annual purchases (then 1%), 6 percent cash back on select U.S. streaming services, 3 percent cash back at U.S. gas stations and on transit and 1 percent on all other purchases. The only downside? The card has an annual fee of $95 ($0 first year for a limited time until 12/10/20).
  • Blue Cash Everyday® Card from American Express is a good no-annual-fee alternative: 3 percent cash back at U.S. supermarkets, again up to $6,000 in purchases a year (then 1%); 2 percent cash back at U.S. gas stations and select department stores and 1 percent cash back on all other purchases.
  • Hilton Honors American Express Surpass® Card: 6 points per dollar spent at U.S. supermarkets, restaurants and gas stations, 12 points respectively per dollar spent at Hilton properties and 3 points on other purchases. The card has a $95 annual fee.
  • The IHG Rewards Club Premier Credit Card and IHG Rewards Club Traveler Credit Card: 2 points for every $1 you charge at grocery stores, gas stations and restaurants, 25 or 15 points per dollar spent at IHG hotel stays respectively, and 1 point for every $1 spent elsewhere. The Premier card has a $89 annual fee; the Traveler card comes with a $0 annual fee.

Purchasing medications using cards at drugstores or wholesale clubs

If you make your pharmacy purchases at a drugstore, such as CVS or Walgreens, these are a few cash back options worth considering:

  • Amazon Rewards Visa Signature: 2 percent cash back on drugstore, restaurant and gas purchases, 3 percent cash back on or Whole Foods purchases, and 1 percent cash back on all other purchases. This card charges no annual fee.
  • Amazon Prime Rewards Visa Signature: 5 percent on and Whole Foods purchases, 2 percent on drugstore, restaurant and gas purchases, and 1 percent elsewhere. The Amazon Prime Rewards Visa requires an Amazon Prime membership.
  • Costco Anywhere Visa by Citi: 2 percent cash back on all purchases from Costco and, 4 percent on gas purchases (up to $7,000 a year, 1 percent thereafter), 3 percent on restaurants and travel, and 1 percent elsewhere. Costco executive members – $120 a year – also can earn an additional 2 percent back, up to $1,000, on Costco purchases. If you use your Costco card to buy medications at a Costco pharmacy as an executive member, you can then actually earn up to 4 percent cash back.
  • Sam’s Club Mastercard might be an option if you buy medications at Sam’s Club. The problem? It’s not the best card for pharmacy purchases: 5 percent cash back on gas and 3 percent on dining and travel – but only 1 percent on other purchases, including pharmacy purchases.You can make the card more attractive by paying extra for the Sam’s Club Select Plus membership – $100 a year instead of $45 for a more basic membership. With Select Plus, you’ll get $10 back for every $500 you spend on qualifying purchases. In addition, Plus members receive five free select prescriptions and special discounts on generics.
There are not many cards out there that provide rewards points or cash back bonuses tied directly to pharmaceutical or drugstore purchases. This means you’ll have to get creative.

Monitoring your spending habits

If you buy pharmacy products at local, independent drugstores, Silbert recommends that you rely on cards that provide strong cash back bonuses for general purchases.

“There are plenty of credit cards that do provide rewards for every purchase you make,” Silbert said. “You want a card that provides you with valuable rewards no matter what you buy.”

This means looking into your general spending habits, too. If you have a long commute to work, consider a card that provides generous rewards points or cash back bonuses for gas purchases, while also providing rewards on other expenses.

This way, you can earn solid points when filling up at the pump while also still earning rewards – even if they came at a lower rate – while charging pharmaceuticals.

Strong cash back options include:

  • The Huntington Voice card (open to residents of eight Midwestern states): 3 rewards points in a category that you choose, including grocery stores and warehouse stores.
  • Chase Freedom: 5 percent cash back on up to $1,500 in combined purchases in bonus categories that change each quarter. From April through June of 2018, PayPal, Chase Pay and grocery purchases are part of the rotating categories, though purchases made at Target or Walmart are not included. You’ll also earn 1 percent back on all other purchases.


Tip: PayPal is one of the payment forms accepted at Walgreens and also one of Chase Freedom’s rotating categories that earn 5 cash back from April to June 2018. That means you can earn 5 percent cash back on pharmacy purchases up to $1,500 if you pay with PayPal and Chase Freedom at Walgreens in the second quarter of 2018.

If you buy your medications at a national superstore such as Target or Walmart, you might be tempted to take out the branded credit cards associated with these retailers.

The problem, though? These cards generally aren’t the most valuable when it comes to rewards. For example, the 5 percent Target RedCard discount does not apply to pharmacy purchases. You’ll usually be better off using a nonstore-branded credit card that offers more generous rewards, Silbert says.

Boost your health benefits

Laura Adams, Austin, Texas-based personal finance expert and author of “Money’s Smart Moves to Grow Rich,” said that if you have a Health Savings Account, you can use cash back cards to save even more money on pharmacy purchases.

HSAs are tax-free savings accounts that can offset high deductible health plans. These accounts are attractive because contributions to them are either tax-deductible or pretax if you make them through a payroll deduction.

Any interest earned on these accounts is tax-free. In 2018, individuals can contribute a maximum of $3,450 to an HSA, while families can contribute up to $6,900.

Adams recommends signing up for a cash back credit card that will either send your bonus to you as a check that you can deposit in your HSA or one that will deposit your bonus directly as a credit statement.

This way, you’ll not only earn that cash back bonus on your pharmacy purchases, you’ll also be able to purchase medication in the future through your HSA on a tax-free basis.

“Turning around that cash benefit into an HSA might be the ultimate way to get the most you can get out of a card,” Adams said.


Tip: If you have a Flexible Spending Account through your health insurance plan, consider making pharmacy purchases with a cash back or rewards card and then requesting a reimbursement from your FSA administrator. That way you’ll earn cash back or rewards in addition to any tax-free savings on health expenses.

Avoid the pain of overspending

Using credit cards at your local pharmacy can pay off, but because prescription medications can be costly, it can be easy to run up credit card debt quickly.

But if you charge only what you can afford to pay off in full each month, then using credit cards to pay for prescriptions can be a sound financial move, said Chris Alberta, president of Brighton, Michigan-based financial-planning firm Principium Tactical Wealth Management.

“If you are disciplined enough to use your credit card as a go-to way of purchasing prescriptions each month without leaving a balance at the end of the month, there is no problem,” Alberta said.

However, too many consumers fall into the trap of considering purchases made with their credit cards, including pharmacy buys, as not being real money.

“The airline miles and the cash back bonuses? So much of that is nonsense when you consider how much you are going to rack up in interest” if you don’t pay your balance in full at the end of the month, Alberta said.

See related: Instant credit: Convenience often comes at a price, 4 unexpected ways to earn rewards from grocery shopping

Editorial Disclaimer

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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