A dining credit card can be an option for many people, this type of card allows for points to accrue from purchases made at restaurants.
But before we get into the pros and cons of using your credit card for dining out… let me share with you an advanced tip.
I knew a guy who always put his meals out with friends on his credit card. He then encouraged his friends to pay him cash.
He of course used this cash to pay off the credit card.
But why did he do this?
For the cash back. He had a card that paid him 3% cash back. It doesn’t sound like a lot, but consider a friday out with a few friends, the tab easily ran $200 or $300. And he just collected cash back rewards and points every time he went out!
Ok, here are the pros and cons of using your card…
Pros of Credit Cards for Dining
It’s often easy to build points with a dining credit card. Many people dine out more than they think they do. Everything from morning coffee to happy hour appetizers and dinners will count.
Takeout and food delivery purchases are often eligible as well. This means you could earn points or cash for ordering from Grubhub.
Because dining out is so common, it’s fairly easy to earn points. You can expect about 3% cash back, or the equivalent, from your card. Dining credit cards are also fairly easy to find.
Cons of Credit Cards for Dining
There are very few downsides specific to dining rewards programs. As with any type of credit card, there may be fees. However, cards with fees generally have more lucrative perks.
As with other credit cards, interest may be an issue. If you accrue debt, you’ll be responsible for paying interest. For this reason, it’s important to budget.
There may also be limitations on where you can dine. Some cards are extremely flexible, while others have specific parameters. Some of your favorite restaurants and services may not qualify.
Choosing a Card
When you’re choosing a dining card, consider where you eat the most. This is because different credit cards are often preferred by different services. It’s in your best interest to consider this before you sign up.
We know of one card offering 3% cashback on dining without an annual fee.
Most other cards that offer rewards for dining often have annual fees. This is because dining out is popular, and it’s easy for people to collect points. To offer robust rewards, a fee is often necessary.
However, some no-fee cards offer general rewards. They are not specific to dining but will offer cash back or points. These general rewards are usually less lucrative.
You will probably have to pay a fee if you want a dining specific credit card. However, if you dine out frequently, it’s usually well worth the fee. Your points can add up quickly.
Weigh all your options before you choose. Low annual fee isn’t the only indicator of an ideal card.
Business Meals
Using a rewards card for business meals is a great strategy. Businesses often supply meals for clients and customers. Earning points can benefit you and the company.
Credit cards for business dining can also help track expenses. You can create a more accurate budget when food expenses are centralized.
Many business meals are tax deductible. By using one card to make these purchases, it’s easier to do your taxes.
If a dining credit card is appealing, know that there are many to choose from. There is almost certainly an option to fit your lifestyle.
The Bottom Line
You can also earn miles and other rewards for dining out. However, your perks will depend upon your card and preferences. Choose a card that works for you.