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How to avoid bank fees at the supermarket

Save at the checkout and avoid credit card fees and surcharges when you're grocery shopping.

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Using a credit card to pick up groceries can be a convenient way to manage your cashflow, but it can come with some extra fees. This could include a surcharge for paying with a credit card or a cash advance fee if you withdraw cash. You can use this guide to understand when you might be charged a fee at the supermarket and to pick up some tips to avoid the cost.

What fees can apply when I use my credit card at the supermarket?

We’ve categorised the possible fees below to help you understand when you may be getting charged for buying groceries with plastic.

Surcharges

Some supermarkets charge customers a surcharge of between 0.5% or 2% of the transaction when they use a credit card. This surcharge covers the cost of processing the card transaction. Major supermarkets such as Coles and Woolworths don't currently apply a surcharge to credit card payments. However, Aldi currently charges customers a 0.5% surcharge for paying with a credit card at the checkout.

Supermarkets must inform customers of any surcharges at the checkout, so make sure to check if a fee applies before paying with a credit card. If it does, you might be better off paying with a debit card or cash to avoid additional surcharge costs.

Cash advances

If you use your credit card to withdraw cash at the supermarket checkout, you'll be charged a cash advance fee. This fee is typically around 3% of the transaction amount. You'll also be charged a cash advance interest rate which applies as soon as you make the transaction. If you need to get cash out, consider using your debit card instead to avoid the high interest and fees.

You may also be charged a cash advance fee for other "cash equivalent" transactions such as purchasing gift cards or reloading a prepaid card.

How do I get more out of using my credit card at the supermarket?

On top of saving money on fees with the above tips, you can also get more value at the supermarket if you have a rewards card. As long as you pay your balance in full every statement period, these credit cards could help reward your grocery shopping:

  • Supermarket credit cards. Examples of supermarket credit cards in Australia include Coles credit cards that earn flybuys points and Woolworths Money credit cards. Some of these supermarket cards are linked with the supermarket loyalty programs including Coles Flybuys and Everyday Rewards. These cards usually award more points per $1 spent at the supermarkets and come with perks to suit shoppers including discounts on your monthly shop.
  • Rewards credit cards. Rewards credit cards are linked with a bank loyalty program and typically earn points per $1 spent on purchases. You can redeem rewards including gift cards, merchandise or cashback on your credit card. Some rewards cards also allow you to convert your rewards points into frequent flyer points with their frequent flyer partners.
  • Frequent flyer credit cards. Frequent flyer credit cards are linked with an airline loyalty program and can also collect points per $1 spent. You can redeem your points for travel rewards including flights and upgrades, accommodation and travel packages. You can start comparing frequent flyer credit cards linked with Qantas or Velocity on Finder.

Compare supermarket credit cards

Data indicated here is updated regularly
Name Product Purchase rate Balance transfer rate Annual fee
Coles Rewards Mastercard - Exclusive Offer
19.99% p.a.
0% p.a. for 18 months with 1.5% balance transfer fee
$0 annual fee for the first year ($99 p.a. thereafter)
Finder Exclusive. Ends 29 October 2020
Save with $100 off a Coles Supermarket shop and a $0 first-year annual fee. Plus, 0% p.a. on balance transfers for 18 months (1.5% fee applies).
Coles No Annual Fee Mastercard - Exclusive Offer
0% for 12 months, reverts to 19.99% p.a.
0% p.a. for 12 months
$0
Finder Exclusive. Ends 29 October 2020
Save on new and existing interest charges with 0% interest on both balance transfers and purchases for the first 12 months.
Coles Low Rate Mastercard - Exclusive Offer
12.99% p.a.
0% p.a. for 6 months
$58
Finder Exclusive. Ends 29 October 2020
Receive $100 off a Coles Supermarket shop when you make an eligible purchase within the first 30 days. Plus, a 0% balance transfer offer.
Citi Rewards Card - Flybuys Offer
21.49% p.a.
0% p.a. for 15 months with 1% balance transfer fee
$49 annual fee for the first year ($149 p.a. thereafter)
Receive 75,000 bonus Flybuys points and a $100 Kmart eGift Card when you meet the spend requirement. Plus, a reduced first-year annual fee.
American Express Platinum Edge Credit Card
20.74% p.a.
$195
Get $150 back when you spend at least $1,500 within the first 3 months. Plus, receive $200 Travel Credit each year.
David Jones American Express Card
20.74% p.a.
$99
Not just for David Jones shoppers, receive 45,000 bonus Membership Rewards Points or 22,500 Qantas Points on eligible spend.
David Jones American Express Platinum Card
20.74% p.a.
$295
DJ's shoppers and Qantas travellers earn 30,000 bonus Membership Rewards Points or 15,000 Qantas Points on eligible spend.
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Using a credit card at the supermarket can be a useful way to manage your expenses and earn points, but there can be costs involved. Before you swipe your card, check if any surcharges or fee apply. If they do, you might want to pay with cash or credit cards instead.

Images: Getty

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5 Responses

  1. Default Gravatar
    mazAugust 19, 2015

    Hi Jonathan,
    Thanks for the speedy response. It’s a Visa card issued by Travelex.

    Regards
    Maz

  2. Default Gravatar
    mazAugust 18, 2015

    I am South African and visit my children and grandchildren in Australia. Initially I had a travel card which I could use to withdraw “cash out” at supermarkets, however when my new card was issued, now with a chip, I was unable to withdraw cash from the supermarkets, only at ATM’s. How can I get around this problem. Many thanks

    • Avatarfinder Customer Care
      JonathanAugust 19, 2015Staff

      Hi Maz, thanks for your inquiry!

      The eligibility of using a travel card overseas depends on the card network e.g. AMEX, MasterCard, Visa etc. So I can assist you further could you please state which travel card you are using?

      Cheers,

      Jonathan

  3. Default Gravatar
    KimMay 7, 2015

    When making purchases (groceries) in germany, Italy, can cash be withdrawn at the same time when paying by travel cash card with Euros on it

    • Avatarfinder Customer Care
      JonathanMay 7, 2015Staff

      Hi Kim, thanks for your inquiry!

      Cash withdrawal facilities with purchases depend on the retailer’s policies and partnerships with banks/ATM facilities. You may like to refer to the following link for a guide on travel money in Germany.

      Cheers,

      Jonathan

Credit Cards Comparison

Data indicated here is updated regularly
Name Product Purchase rate Balance transfer rate Annual fee
Coles No Annual Fee Mastercard - Exclusive Offer
0% for 12 months, reverts to 19.99% p.a.
0% p.a. for 12 months
$0
Finder Exclusive. Ends 29 October 2020
Save on new and existing interest charges with 0% interest on both balance transfers and purchases for the first 12 months.
ANZ Low Rate
12.49% p.a.
0% p.a. for 25 months with 1.5% balance transfer fee
$0 annual fee for the first year ($58 p.a. thereafter)
Save with 0% p.a on balance transfers for 25 months (with a 1.5% BT fee) and $0 first year annual fee. Plus a 12.49% p.a. purchase interest rate.
Qantas American Express Premium Card
20.74% p.a.
$249
Enjoy 100,000 bonus Qantas Points, 50 bonus Status Credits and 2 complimentary Qantas Club lounge invitations per year.
Citi Rewards Card - $500 Voucher Offer
21.49% p.a.
0% p.a. for 12 months
$99 annual fee for the first year ($199 p.a. thereafter)
Get a $500 e-voucher to spend at Myer, JB Hi-Fi or Coles when you spend $3,000 in the first 90 days. Plus, earn points with the Citi Rewards Program.
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* The credit card offers compared on this page are chosen from a range of credit cards finder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your own personal financial circumstances when comparing cards.

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