If you eat out a lot and normally use a credit card for your purchases, you may want to consider getting a credit card that rewards you for all of your dining. The credit cards that are good for if you eat out a lot are not restaurant credit cards specifically, they just offer rewards for using it at restaurants.
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Just because you eat out a lot doesn’t necessarily mean that you should automatically get a restaurant credit card. There are reasons why you should get one and those as to why you shouldn’t.
What makes them a restaurant credit card?
A restaurant credit card is a rewards credit card that earns you more points at dining establishments. For example, most rewards cards offer one reward point for each dollar spent. A restaurant rewards credit card is one that will offer two or three points for each dollar you spend at a restaurant.
Some restaurant credit cards are specific as to which dining places are eligible for the extra points, while others are not. Some only offer the higher rewards points for five star restaurants or coffee shops. The best ones will not segregate between different types of places. You should get points whether you eat at:
- Sit down restaurants
- Fast food joints
- Coffee shops
- Fast casual restaurants
Read the fine print of the credit cards you are researching to make sure they can be used where you dine most frequently.
What are some of the credit cards that offer extra bonus points for use at restaurants?
The Chase Freedom Visa credit card is a good restaurant credit card because every three months there is a new category that will earn you 5% back on purchases. Dining is one of these categories, as are:
- Home improvement stores
- Charitable organizations
- Movie theaters
The New Ink Cash credit card from Chase will earn you 2% back on dining. This is good for the first $25,000 that you spend on purchases every year.
The Discover Open Road credit card will earn you 2% back when you dine at restaurants, and will give you a gift certificate for Restaurant.com in the amount of $150 when you make your initial purchase with the card.
If you are a member of the warehouse superstore Costco, you are eligible for the American Express True Earnings credit card. There is no annual fee for those with a Costco membership. It offers 3% cash back when you use the credit card for dining purposes.
If you are a business owner, several credit cards offer a nice percentage for use at restaurants. The Chase Business Rebate credit card will earn you 3% back, as will the FNBO Business Edition Plus Visa card.
Many of the rewards credit cards have no annual fee, which is good. You should always look closely at the terms such as interest rate and any penalty fees they may charge before choosing a card for your needs.
JD Power’s website provides ratings for credit cards so that you can compare which one is the best deal.
When should you not get a restaurant credit card?
Earning 3% back on your dining purchases will not be beneficial to you financially if you are carrying a large amount of credit card debt. The best-case scenario for getting a rewards credit card is if you do not have credit card debt and you pay off your balance on your cards every month.
Although it may sound like a good deal, earning 2, 3, or even 5% cash back on purchases pales in comparison of the interest rates that the credit card companies charge you for carrying a balance from month to month. If you are carrying a balance on a credit card that has an APR of 3% or more, which is pretty much most of them, you are playing a losing game.
If you do have credit card debt and want to work on paying it off, the smartest thing to do would be to cut down on your dining out and spending that extra money to pay towards your credit card debt. Once you pay off your current credit cards, then you may want to consider getting a credit card that rewards you for eating out and then plan to pay off the balance every month. Visit Suze Orman’s website for more tips on how to pay down credit card debt.
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- Is there such a thing as a dining credit card?
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