- Key insight: As prices rise, Americans are increasingly using credit cards to pay for basic necessities. To compete for those customers, some card issuers are offering rewards for everyday purchases.
- Supporting data: In 2025, 63% of working-age U.S. adults paid for groceries with their credit cards, up from 60% in 2023, according to an Urban Institute study.
- Expert quote: "When … the card's being used for milk and eggs and bread, the underlying piece is that there's more risk in that portfolio." — Brian Riley, co-head of payments at Javelin Strategy & Research
Traditionally, credit-card perks have been associated with flights and hotels. Now, in an age of stubborn inflation, they're becoming more tied to gas and groceries.
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Importantly, many of these rewards can be redeemed at the same time as they're earned, providing immediate relief from high prices.
"As our members accumulate rewards on their credit cards, we allow them to redeem them at point of sale at the merchant," USAA Bank President Michael Moran told American Banker. "And what we're seeing is tremendous utilization at the gas pump and in grocery stores."
The popularity of these features, Moran said, is thanks to today's economic pressures. As the prices of basic necessities continue to rise, many consumers are more interested in spending rewards on small purchases than on luxuries.
"In this environment, where our members are feeling the strain of the economic environment … the best thing that we can do is give rewards back to our members to help them with everyday spending," Moran said.
USAA, a $106 billion-asset financial services company that caters to U.S. military members, launched two new credit cards this month. Eagle Adapt, a Visa card, and Eagle Ascend, which runs on American Express' network, both offer cash back on groceries, gas, dining, home-improvement costs and other day-to-day expenses.
It's a strategy for both keeping and attracting mass-market customers, backed up by the company's own research. In a USAA survey conducted in March, 47% of U.S. adults said they used credit-card points to pay for essentials, while only 26% said they used them for "treats."
"The need to offset everyday costs increasing is prevalent, not just in our members, but across the broader economic environment," Moran said. "So competitive rewards that help bring down everyday costs are resonating really well with the members."
For half a decade, Americans have lived with rapidly rising prices. The Federal Reserve's preferred measure of inflation, the 12-month change in the
Recently, the war in Iran has sent fuel costs soaring. In June, gas prices were almost 27% higher than they had been a year before, according to the
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Amid this pressure, consumers have increasingly turned to credit to make ends meet. In 2025, 63% of working-age U.S. adults used their credit cards to buy groceries, according to a
For credit-card issuers, this shift toward using credit for everyday expenses represents an opportunity — but also a danger.
"From an issuer standpoint, it forces more people to revolve their credit cards," Brian Riley, co-head of payments at the consulting firm Javelin Strategy & Research, told American Banker. "There's a window where you make more money, but if [customers are] doing that for an extended period of time, it says that budget's not under control."
For customers who fall behind, Riley said, the buildup of interest can end up outweighing whatever benefit they got from their rewards. And for credit-card companies, there's a chance that such customers could ultimately default.
"It's one thing for their holiday spending to bump up," Riley said. "When that trend starts to change, and those holiday gifts get stuck on there, or now the card's being used for milk and eggs and bread, the underlying piece is that there's more risk in that portfolio."
That's not to say this risk is especially high right now. Nationally, credit-card delinquency rates have been declining in recent months, and the net charge-off rate has fallen year over year for four straight quarters, according to the
At the same time, plenty of other indicators show consumers under stress. The Urban Institute's study, for example, found that in 2025, 8.7% of U.S. adults paid for groceries with credit cards but didn't always make the minimum payment — up from 7.1% in 2023.
In this complex environment, Riley said, offering rewards for such purchases can be lucrative for credit card companies — if they're careful.
"They're not really overhauling the whole business," Riley said of USAA. "They're adapting to the current economy, and that's significant."
