Over the past couple of days, we’ve seen Amex and Chase come out with numerous bonus offers for spend at supermarkets. We wanted to line up all the bonuses and compare their points-earning rates, so we can analyze how to best use the bonuses for our upcoming grocery spend.
If you’re just doing regular grocery shopping, you can probably pick the highest-earning bonus available to you and simply hit it until it runs out. But if you’re purchasing gift cards (including Visa or Mastercard gift cards (VGCs/MCGCs) for manufactured spend), you’ll want to have a focused strategy that takes into account the full range of benefits and trade-offs for each card. Importantly, we’re not recommending that anyone make extra trips to the grocery store and risk additional potential virus exposure. But if you’re going to the grocery store anyway, you may want to take advantage of these unique opportunities.
In terms of manufactured spend, you may want to keep these points in mind:
- Amex has high sensitivity to purchasing gift cards to meet minimum spend requirements for new-card and upgrade bonuses
- Amex may be sensitive to gift card purchases in high volume generally; its terms and conditions give it the right to take adverse action against cardholders in the event of gaming
- That said, we have not had problems so far (!) purchasing GCs in a volume sufficient to hit the $25k/year grocery spend cap on the Amex Gold card or the $15k/year threshold to earn a free night certificate on the Amex Hilton Surpass card; note that we always include at least one other item with our GC purchase when paying with Amex and try to stay away from stores known to report Level 3 detailed data
- Chase generally has shown little sensitivity to gift card purchases
The Current Grocery Spend Offers
To help in analyzing the current grocery spend offers, we prepared a chart summarizing each offer. The offers are ranked by the “effective return” on each card. We calculate the “effective return” by multiplying the points-earning on each card by our baseline value for the particular type of points currency. For example, the Chase World of Hyatt card’s bonus is 3x Hyatt points per dollar. We give Hyatt points a baseline value of 1.5 cents per point; thus, our “effective return” for the World of Hyatt card’s grocery bonus offer is 4.5%.
We have also included 2 Amex cards that include US supermarket spend as a “normal” bonus category – the Amex Gold card, which earns 4x Membership Rewards (MR) points per dollar, up to a cap of $25,000 per year; and the Amex EveryDay Preferred card, which earns 4.5x MR points/$ if you have at least 30 transactions with the card each month (earning is 3x MR if you have less than 30 transactions in a month), up to a cap of $6,000 per year.
Here’s the full chart, based on the Amex and Chase offers that we’ve seen so far:
Analysis & Strategy
The Chase Sapphire Reserve (CSR) card and the Chase Freedom card (groceries are a 2nd quarter 5x bonus category on the Freedom) are hands-down winners here at 7.5%. We encourage anyone with these cards to use them and max out their caps first.
MS on these cards is nicely profitable, even using online liquidation where the total of purchase + liquidation fees may be in the range of 3-4%. Looking at the effective return rates on the chart, we’re seeing many cards where we project “profits” even with online liquidation rates. (That said, you’ll have to decide for yourself whether you want to “pay” for United or Delta miles or Hilton or Hyatt hotel points during these uncertain times, even at “discounted” rates.)
Beyond the best-in-class CSR and Freedom returns, you can continue down the chart to see what makes the most sense for you. One thing we’d note is that if you’re able to hit the annual cap on grocery spend on your Amex Gold and/or EveryDay Preferred card using spend outside the promotional periods for the other bonus offers, you might want to hold off on using those cards until the bonuses are over. You can always “catch up” on your spend on those cards later and still max out their caps.
For us, the critical strategy questions about where to place our grocery spend turn significantly on what big-spend bonuses we might be able to hit. For example, the $15k spend on the Surpass card for a Hilton free night certificate (FNC) looks like a juicy target, given that you’d earn 12x Hilton points (5.4% effective return) in addition to making progress toward a free night. Sadly for us, we just hit $15k last week, in preparation for upgrading the card to Aspire before its upcoming anniversary date, so we won’t be hitting that one. But suddenly, spending up to $60k on an Aspire card for an additional FNC seems like a reasonable possibility if much of the spend can be done at 12x – even though we categorized this deal as a “No Thanks” in our analysis of big-spend offers earlier this year (see Big-Spend Credit Card Bonuses & Benefits for 2020 – Yes, No or Maybe?).[Also, note that Hilton free night certificates just became much more flexible and valuable today, with the announcement that unexpired and new Free Weekend Night Rewards issued through 12/31/2020 can now be used any night of the week, and newly-earned FNCs will be valid for 24 months rather than just 12!]
Another big-spend bonus that jumps out as appealing is the Hyatt Category 1-4 FNC for $15k in spend during a cardholder year on the Chase World of Hyatt card. If you haven’t hit that threshold yet, the new grocery bonus presents a golden opportunity to make $3,000 worth of progress. This one turns out to be helpful for us, as we’re still a bit shy of getting to $15k during this cycle.
We suspect that some Delta flyers who hold the Amex Delta Reserve card will salivate at the prospect of earning 4x Skymiles while making progress toward their Medallion Status Boost thresholds and MQM waiver. This benefit is magnified by the facts that (a) 2020 MQMs will be rolled over to 2021 for qualification toward 2022 Medallion status; and (b) bonus earnings are uncapped on this card.
Obviously, we see some great opportunities for points-earning and progress toward big-spend thresholds in this flurry of grocery spend bonuses. We need some groceries anyway, so we’re heading out to our local store to pick up some food and GCs, CSR card in hand!
What are your strategies for the grocery spend bonuses on Amex and Chase cards? Please share with us and other Middle Age Miles readers in the Comments!
At Middle Age Miles, we love to bring you travel, credit card and points-and-miles information that you can use to help make your travel dreams come true. To see all of our tips and insights, please Like and follow us on social media at:
Please share and re-tweet our posts and tell all of your friends about Middle Age Miles! Thank you!