Credit Building Tips

Do You Get Cash Back With a Credit Card at a Grocery Store?

Shaun Connell
July 27, 2023

When you use a debit card at a retail location, they'll often ask you if you want cash back. Can you get cash back with a credit card at a grocery store like you can with a debit card?

At the same time, the term "cash back" also refers to another type of financial transaction-- receiving cash rewards for purchases made using a credit card. Can you receive cash back rewards when you shop at grocery stores?

Solution icon Here are the short answers: you can't get cash back from a grocery store the same way you can with a debit card. However, you can take out a cash advance at an ATM or financial institution. On the other hand, some credit cards will give you cash back rewards for grocery store purchases-- it depends on the issuer, the card, and the agreement.

Now let's dive in and explore everything you need to know about cash back credit cards, getting cash back at a grocery store, and cash advances.

Getting Cash Back: Defining the Term

Before we look into whether you can get cash back with a credit card at a grocery store, we need to split some hairs about what one could mean when they use the term "cash back."

Getting cash back can mean:

  1. A debit card transaction where the amount charged is above the purchase price in order to withdraw additional money at the point of sale
  2. A credit card benefit that gives the cardholder a small percentage of the credit they've used

family shopping in grocery store using cash back credit card

Making this distinction is important in order to answer the question at hand adequately. Let's take a closer look at the difference between "cash back" and a "cash advance" before answering the following questions:

  • Can you get cash back with a credit card at a grocery store the same way you can with a debit card?
  • Can you earn cashback rewards for purchases with credit cards at grocery stores?

Worried you're going to overdraw your bank account? Check out our recent posts about the best banks without overdraft fees and whether overdrawing your account will impact your credit.

Cash Advance Vs. Cash Back: Understanding the Difference

Another term we'll want to enter into the discussion is "cash advance."

When you take out a cash advance, you are able to use your credit card to get cash at an ATM or a bank. However, rather than withdrawing the funds from an account that holds your own money (like when you use a debit card at an ATM,) you are, instead, taking out a short-term cash loan.

Many credit cards offer this feature, though typically at a higher-than-usual interest rate. When you take out a cash advance, you are essentially buying cash with your line of credit rather than specific services or goods.

How a Cash Advance Works

If you need to get cash from your credit card, it is possible. However, it's crucial to understand that it isn't the same thing as taking out money from an ATM with your debit card or getting cash back at a grocery store.

A cash advance can be convenient if you only have your card with you but you want to purchase something from a cash-only vendor. However, it's important to recognize that you'll pay fees and interest on this short-term loan-- there usually isn't the same grace period with cash advances as there are with purchases.

Sometimes, your credit card issuer will have you set up a PIN when you initiate your account. If this is the case, you can typically get a cash advance simply by using an ATM and entering this PIN code.

If you don't have a PIN, you can usually bring your credit card to a bank that is connected to your card's payment network to take out a cash advance. In order to complete the transaction, you'll need to show your ID.

Understanding the Cost of Cash Advances

Though getting a cash advance can be convenient or even a lifesaver when you're in a pinch, it's important to realize that they come at a cost.

There are several expenses typically associated with a cash advance from a credit card:

  • Fees: Your credit card issuer might charge a flat fee or percentage-based fee when you take out a cash advance. Flat fees might be $5 or $10, while the percentage might be as much as 5%. In some instances, they'll charge either a flat fee or a percentage depending on which number is larger.
  • Interest: The interest rate that credit card issuers charge for cash advances is usually higher than your purchase interest rate. Not only that, but you'll usually start accruing interest right away as there typically isn't a grace period like there is with purchases.
  • Bank or ATM fees: You might also get hit with a fee from the ATM or bank you use to take out a cash advance. These fees can vary and depend on the specific financial institution.

Getting a cash advance from your credit card is definitely not the cheapest way to access cash. You, therefore, really only want to use this as an emergency measure rather than your standard method of getting some cash.

How Cash Back Differs From a Cash Advance

When you go to a grocery store or other retail location, you are often able to get cash back when you make a purchase. However, this is only usually the case if you're using a debit card.

When you're using a debit card to make purchases, you are paying with your own money that comes straight from your bank account. On the other hand, when you use a credit card, you are borrowing money from a line of credit that you are obligated to repay.

merchant handing fruit to customer using cash back credit card at grocery store

This is the key reason why you can get cash back from a grocery store with a debit card and not a credit card. In order to get cash back with a debit card from a merchant, they simply have to overcharge your card and then give you the difference in cash.

Cash Back: The Credit Card Reward

The other type of financial transaction that "cashback" refers to is the credit card reward that gives consumers a small percentage of the amount of money they've spent on purchases back to the customer.

This is simply one of the styles of credit card rewards programs out there. Other rewards programs give cardholders points or miles that can be used to buy various goods or services. Cash-back, on the other hand, lets the cardholder receive actual cash instead.

There are a number of ways that cash-back rewards can be delivered to customers, including:

  • Crediting the card with the amount of cash-back and therefore reducing the balance
  • Depositing the money directly into a linked bank account
  • Sending a check through the mail
  • Offering a gift card in the cashback amount

Pretty much every card issuer offers cards with cash-back benefits.

Can You Get Cash Back With a Credit Card at a Grocery Store?

So, can you get cash back with a credit card at a grocery store?

The answer is: yes and no.

  1. Can you withdraw money at a grocery store counter using a credit card like you can with a debit card? The answer is no.
  2. Can you earn cashback using a credit card for grocery store purchases? The answer is yes, but the more complicated answer is that it depends on the rewards program associated with your particular credit card.

Are you working to improve your knowledge about credit cards and credit scores? Check out our guides to dealing with a 100 point credit score drop, how opening a new card impacts your credit, and hacks you can use to boost your credit.

Do All Grocery Store Purchases Earn Grocery Cash Back Rewards?

If you have a card that says it offers cash back for groceries, you might be wondering whether you can receive the reward for all purchases at a grocery store or just for food-related items.

You'll want to look at the fine print of your credit card rewards agreement to learn which grocery stores will qualify you for cashback. For example, many issuers won't offer the grocery store cashback rate for purchases made at big box stores, wholesale clubs, convenience stores, supercenters, and discount stores.

For example, let's say your card offers 2% cash back on groceries and 1% cash back on all of the other purchases you make. How do you know when you're receiving the 2% cashback versus the 1%?

In order to gain a greater understanding of what types of purchases you'll earn cashback for, you'll want to understand the concept of merchant category codes. These are four-digit numbers that credit card issuers use to categorize different businesses.

To determine whether purchases from a certain grocery store qualify for cash back, you can look at your credit card statement. Though it might not necessarily list the merchant code, it will typically offer a "merchant description" that lists the category of the merchant.

Earning Cash Back as a Credit Card Reward

Every credit card issuer is going to have its own system and structure for cashback rewards programs. For example, some of them will offer percentages of purchases back to the customer based on the category. In contrast, others might offer a flat cash-back rate for purchases regardless of category.

Beyond that, other cards will give consumers the ability to choose which categories receive the highest percentage back or will rotate which categories receive the biggest percentage back.

Flat Rate Cash Back Cards

Using a flat-rate cash-back credit card can be nice because you don't ever have to think about whether your purchases are earning cash back. No matter where you're shopping, a flat percentage amount will be applied to your purchases.

Some popular cards that offer flat rate cash back include:

  • Wells Fargo Active Cash Card
  • Capital One Quick Silver Cash Rewards Credit Card
  • Fidelity Rewards Visa Signature Card
  • Bank of America Unlimited Cash Rewards Credit Card
  • American Express Cash Magnet Card
  • PayPal Cashback Mastercard

Usually, these types of cards won't have rates any higher than 2%. This means that you can earn $20 every time you spend $1,000 dollars, no matter which merchant categories the purchases fall into.

Bonus Category Rate Cash Back Cards

Other cards will give consumers a higher cash back percentage for specific kinds of purchases. You'll usually hear these cards referred to as "bonus category cash back cards."

Some popular cards that offer bonus category cash back include:

  • Citi Prestige (Feature categories: restaurants and air travel)
  • Chase Sapphire Reserve (Feature categories: dining, air travel, hotels and car rentals, general travel)
  • American Express Gold Card (Feature categories: U.S. supermarkets and restaurants)
  • Citi Premier (Feature categories: supermarkets, hotels, gas stations)
  • The Platinum Card from Americacn Express (Feature categories: flights booked with Amex travel or directly with airlines, prepiad hotels booked with Amex Travel)

A card like this might offer 2% or 3% cash back in certain categories, such as groceries, gas, or travel. For the rest of the purchase categories, they'll offer a smaller percentage of cashback, usually around 1%.

Rotating Category Cash Back Rewards

You can usually find higher cash back percentages through rotating cards than you can with flat rate cards. For example, certain types of purchases could earn you as much as 5% cashback.

However, truly benefiting from this type of card is more complex and requires some input on your end.

Some examples of popular rotating category cash back rewards cards include:

  • Chase Freedom Flex
  • Discover It Cash Back
  • Chase Ultimate Rewards

Usually, you will have to activate the rotating bonus category before you are able to reap the rewards. The highest-earning categories will rotate quarterly.

Credit Card Cash Advance: The Pros and Cons

Taking out a credit card cash advance can be tempting, particularly when you're in a pinch. Before you take out one of these short-term loans from your credit card issuer, though, you'll want to consider the pros and cons.

The Potential Benefits of Cash Advances

There are a few positive things about cash advances to mention before diving into the downsides:

  • Quick access to cash: While not all credit cards offer cash advances, this is a very common feature. Though it isn't the cheapest way to get your hands on some cash, it is very convenient when you're in a hurry.
  • Easy withdrawals: You usually have a few different options for taking out cash advances if your card issuer allows this feature. You can typically use an ATM to take out money or go into a financial institution to get your advance.
  • Low minimum payments: Usually, the minimum payments you'll need to make are calculated just like card purchases are. While it's typically advised to pay off your full balance every money rather than use the minimum, it's still good to know that you can keep your account in good standing by paying a nominal amount of what is owed each month.
  • No credit check: Usually, when you want to borrow money, the lender is going to check your credit. This means a hard inquiry on your report and the potential that you won't qualify. Cash advances give you access to money without having to deal with an application and credit check.
  • Can help you in a pinch: While you really don't want to rely on cash advances, the truth is they can be very useful if you're in a jam. Whether you need to borrow a little money to tie you over to next week or you're at a store that only accepts cash, cash advance helps ensure you aren't stuck without the means to make cash purchases.

Are you trying to find the right credit card for your needs? Take a look at some of our recent posts about the easiest Amex card to get, guaranteed approval credit cards, and department store cards for bad credit.

The Potential Downsides of Cash Advances

Now that we've considered why taking out a cash advance might be attractive from time to time let's take a closer look at why this really isn't something you want to do with any regularity.

  • The truth is cash advances have a lot of cons.

Here are some reasons you might want to find an alternative way to access cash:

  • Cash advance fees: You will pretty much always be dealing with a fee if you take out a cash advance from your credit card. This could be a flat fee or a percentage-based fee.
  • Additional fees: On top of the fee charged by your credit card issuer, you might also be charged a fee by the bank or ATM you use to take out money.
  • High APR: The interest rates charged by credit card companies for purchases are already high. The rates for cash advances are almost always higher. Make sure you look at your card agreement to learn what the APR is before taking out cash.
  • No grace period: When you make credit card purchases, there's usually an interest-free grace period. In short, you usually have a month or so where you aren't accruing interest on purchases. With cash advances, interest typically kicks in immediately without any grace period.
  • Potential credit score impact: When you take out a cash advance it's going to increase the balance on your credit card account. If you get into the habit of borrowing money this way and don't pay it back immediately, you'll probably notice a negative impact on your credit score.

Cash Advance: Additional Considerations

Finally, you'll also want to consider these factors when deciding whether a cash advance is the right choice:

  • No access to full credit line: It's worth also noting that most card issuers won't let you use your full credit line when taking out a cash advance. Make sure you understand any restrictions on the cash advance amount before relying on this method.
  • No rewards: Many credit cards offer rewards for purchases. You won't enjoy this same perk for the money you take out as a cash advance.
  • Risks of carrying cash: It's also worth noting that once you turn your credit line into cash, you lose the protections offered by the credit card company.

Cash Back Rewards Credit Cards: The Pros and Cons

Finally, let's take a look at some of the arguments for and against cash-back credit cards.

On the plus side, these cards:

  • Give you cash rewards based on your spending
  • Often don't have any annual fee
  • It might come with 0% APR introductory promotions
  • Can give you additional shopping perks
  • Might offer additional sign-up bonuses

On the other hand, there are some potential downsides you'll want to consider:

  • Comparatively high ongoing APRs
  • Maximum earning limits for cash-back rewards
  • Foreign transaction fees
  • Often don't offer other types of rewards like travel perks

Improving Your Credit: Knowledge Is Power

It's common for people to think of debit cards and credit cards as somewhat interchangeable, but the truth is they are very different ways of accessing cash. When you use a debit card, you are withdrawing money directly from your own account. When you use a credit card, you are borrowing money against a line of credit that's extended to you.

This difference is why you can't get cash back at a grocery store counter using a credit card, but you can with a debit card. If you want to take out cash from a credit card, you'll need to get a cash advance. These are easy to get if your issuer offers the service, but it is usually a very expensive way to borrow money.

On the other hand, you can earn cash-back rewards at grocery stores using some cash-back credit cards. While there is such a thing as a cash-back rewards debit card, these are not the standard by any means.

The more you know about your credit cards and how they work, the more able you are to take control of your credit and financial life. Taking the time to learn about things like cash back and cash advances can help you make smart financial decisions that pay dividends down the road.

Are you on a journey to improve your credit? If so, you're in the right place! Make sure to check out our Credit Building Tips blog for more articles and guides about achieving financial health.

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Written By:
Shaun Connell
Shaun Connell is a personal finance and credit expert with a passion for helping individuals eliminate debt and improve their credit. He's enjoyed writing investing and financial content for over 15 years, with expertise in real estate, debt, banking, credit, and wealth building. His work has been seen by millions on the web.

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