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Maximize Your Grocery Store Rewards with O1ne Mortgage

At O1ne Mortgage, we prioritize helping our clients make the best financial decisions. Understanding how to maximize your grocery store rewards can significantly impact your budget and overall financial health. In this article, we will explore the intricacies of grocery store rewards, what counts as a grocery store purchase, and how you can optimize your rewards to get the most out of your credit card benefits.

How Merchant Category Codes Work

A Merchant Category Code (MCC) is a four-digit number that classifies businesses by type. These codes, developed by the IRS, are used to track payment processing charges and determine bonus rewards on purchases. Every merchant that accepts credit cards has a category code, either self-designated by the business or assigned by the payment network. Credit card issuers do not choose MCCs, but you can call your credit card issuer to check the MCC of a given business.

What Generally Counts as a Grocery Store

Grocery stores are generally stores located in the United States and assigned MCCs that identify them as grocery stores or supermarkets. These can be small, independent grocery stores or large chains. For a grocery purchase to be eligible for grocery-category credit card rewards, the business typically must be classified as a grocery store or supermarket. Grocery store purchases might also include grocery delivery, but it’s important to read the terms to be familiar with what exactly constitutes a grocery purchase.

What Generally Does Not Count as a Grocery Store

The grocery store category generally does not include convenience stores, superstores, discount stores, warehouse clubs, or meal-kit delivery services. It also doesn’t typically include drugstores that also sell food. However, there are differences among card issuers, so it’s smart to read the fine print on your credit card agreement. Stores may have multiple MCCs, and purchases from grocery-store-branded pharmacies and gas stations do not generally count as grocery purchases.

How to Maximize Grocery Store Rewards

Knowing where you shop, whether you are willing to pay an annual fee, and how much effort you are willing to make can inform your decision about the best grocery store credit card for you. Whether you are looking for points, miles, or cash back, it’s crucial to read the fine print and understand what will qualify. Here are some strategies to consider:

• Customize your rewards or get a store card with cash back: If you buy your groceries at a superstore or warehouse, you may be able to choose a card that allows you to customize rewards. For example, you could pick your store and get up to 3% cash back. Alternatively, you could find a store credit card that offers up to 5% back when you shop at that particular store.
• Activate a rotating bonus category: If you have credit cards with rotating bonus categories, it makes sense to activate the bonus categories each quarter. You can use a sticky note on credit cards to remind yourself which card(s) to use. Most have a quarterly maximum of $1,500 in combined purchases for bonus categories.
• Get a card with an annual fee: You may be able to get a cash back card that pays up to 6% cash back for groceries all year long. It will still have an annual maximum on eligible grocery store purchases, but depending on how much you spend, it could make sense.

The Bottom Line

Used strategically, rewards cards can help you stretch your grocery budget or earn rewards. Understanding your credit card issuer’s definition of a grocery purchase is crucial. You might already have a rewards card that will serve you well when you buy groceries. Activating bonus categories or matching a store credit card to the store where you buy groceries may be one way to save.

At O1ne Mortgage, we are dedicated to helping you make the most of your financial opportunities. For any mortgage service needs, call us at 213-732-3074. Our team of experts is ready to assist you in achieving your financial goals.

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