In the credit card space, 2018 has been the year of food. With so many dining rewards credit cards out there, what’s a food lover to do?
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Last month, the Citi Prestige card announced a relaunch that will include 5 points per dollar spent on dining. Earlier in October, the American Express® Gold Card started offering 4 points per dollar at U.S. supermarkets and U.S. restaurants, on up to $25,000 per year in purchases, then 1 point per dollar thereafter. That came on the heels of the new Capital One Savor Cash Rewards Credit Card and its 4 percent back on dining.
Why do issuers have such a strong appetite for our dining spending? Well, for starters, food is an integral part of our daily lives. A recent CreditCards.com survey found 26 percent of U.S. adults buy groceries online every week and 21 percent buy prepared food and drinks at least once a week.
Those were the top two categories by far (outpacing clothing, travel, streaming services and event tickets). Credit card issuers want their cards to be at the top of your wallet, and there’s no better way to do that than to offer bonus points on everyday items such as food.
Plus, food – especially when it’s consumed at restaurants – is a social activity. That refers to the traditional meaning of the word (socializing with dining companions) as well as social media. Restaurants and credit card issuers are trying to woo millennials who love to share food photos on Instagram, Snapchat, Facebook and Twitter.
What’s a food lover to do?
With all of these new cards on the market, if you haven’t applied recently, chances are you’re not maximizing your food rewards. The best grocery card is pretty straightforward: the Blue Cash Preferred® Card from American Express gives 6 percent cash back at U.S. supermarkets with a $200 introductory bonus, after you spend $1,000 on your new card within the first three months.
It has a $95 annual fee, so if that scares you, alternatives include the Blue Cash Everyday® Card from American Express which comes with 3 percent back at U.S. supermarkets, on up to $6,000 per year in purchases, then 1 percent thereafter, with no annual fee and a $150 welcome bonus after you spend $1,000 within the first three months.
The Bank of America Cash Rewards credit card is another option with no annual fee, a $200 sign-up bonus after you spend at least $1,000 on purchases in the first 90 days of account opening and 2 percent back at grocery stores and wholesale clubs for the first $2,500 in combined grocery/wholesale club/gas purchases each quarter – which could become 3.5 percent if you keep at least $100,000 with Bank of America or Merrill Lynch.
What’s the best card for dining out? That’s about as clear as a bowl of split pea soup. The Hilton Honors American Express Aspire Card gives the most points per dollar with 14 points per dollar on Hilton stays, 7 points per dollar on airfare, car rentals and restaurants and 3 points per dollar on other purchases. However, Hilton points aren’t worth very much and redemption options are limited. Plus, the card has a hefty $450 annual fee.
The Citi Prestige will charge a $495 annual fee when it opens back up in January. That could rule out a lot of potential customers right there, although a $250 travel credit softens the blow. It also has other perks such as a yet-to-be-announced sign-up bonus, a Global Entry/TSA Precheck fee waiver valued at $100 every five years and the opportunity to earn 5 points per dollar on airfare and two “4th night free” hotel credits every calendar year.
AmEx Gold is another card with a high annual fee ($250) that includes various credits to help offset it. But the annual fee is too high for me to stomach, and the introductory bonus is merely decent.
My top pick for a dining rewards card
If I had to pick a card that offers at least 4 points per dollar on dining, my top two selections would be the Capital One Savor and the Uber Visa card from Barclays. As someone who has never had a card with an annual fee, my choice will probably surprise you.
Between those two cards, I’d opt for the one with an annual fee (the Capital One Savor) because it also offers 4 percent back on entertainment (including sports tickets, concert tickets, movie tickets and the like) and a generous $500 sign-up bonus after you spend $3,000 within the first three months from account opening. The annual fee is waived for the first year, and it’s $95 after that. Cardholders also get 2 percent back at grocery stores.
The Uber Visa is a close second in my book. It beats the Savor card on travel with 3 percent back on airfare, hotels and vacation home rentals. It also returns 2 percent on online purchases. But its sign-up bonus is a mere $100 after spending $500 in the first 90 days and I like the Savor’s entertainment category. It’s lucrative and more unique than a 3X travel category.
Suddenly, the Uber Visa (which launched in November 2017) is a senior citizen among cards that offer 4-plus points per dollar on dining. That shows how much has changed over the past year in the credit card/dining world.