Editorial Policy

Gas and Groceries – the Cash Back Favorites

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By Steven Gibbs
August 13, 2010

If your credit card offers you cash back, you’ve probably noticed that the percentage rebate varies by category.  For example, American Express advertises 5% cash back on gas, groceries and drugstores, and 1.5% cash back on everything else.  Discover offers 5% back on gas and groceries, among other categories.  Citibank actually offers 2% cash back on “rotating categories”.

Turns out, “Gas and Groceries” are habit-forming.  While they may make up a small part of your household budget, you probably purchase them one, twice or even three times a week.  And the card companies are hoping that you’ll get used to pulling their card out for the small purchases, so that when it comes for a big purchase, their card will be “top of wallet.”

I don’t think this falls in the “dirty tricks” category.  In fact, you can use it to your advantage.  You can maximize your cash back by making sure you put these small purchases on your card.  And you might consider carrying multiple cash back cards to maximize your rebates when one has a higher rebate on a category.