The grocery store chain's rewards card doesn't stack up to better credit card offers.

I’m not a big fan of retail credit cards. I once wrote an article called You never need a department store credit card. I stand by it. Retail cards seem targeted at shoppers in a hurry who don’t have time to study the terms.

The worst has to be the Kroger 1-2-3 Rewards Card offered by US Bank. Kroger is a large grocery chain that includes brands such as King Soopers, Ralph’s, Smith’s, Fred Meyer, and others.

I don’t expect you to take my word for it, so let’s look at what all great credit cards should offer you — then compare that to to the Kroger 1-2-3 Rewards Card…

1. A great sign-up bonus

The credit card industry is so competitive that most reward cards will offer you a sign-up bonus to lure you in. For example, the Amex Everyday card offers new applicants 10,000 points after they make $1,000 in purchases within three months of opening a new account, plus one year of Amazon Prime.

The Kroger card has no sign-up bonus.

2. A clearly defined rewards program

The Kroger card offers three points per dollar spent on Kroger brands, double points for other purchases from Kroger stores, and one point per dollar spent on all other purchases.

This sounds great, except a closer reading of the rules reveals this: You need to redeem 1,000 points just to earn $5 in free groceries. So points are worth a mere 0.5 cents each! Half a penny!

By comparison, the Discover it card offers cash-back rewards that can be redeemed for actual cash with no gimmicks.

3. Rewards that offer competitive value

Now that we know Kroger’s points are worth just one half of a cent each, we can quickly see:

  • purchases of Kroger’s generic goods return 1.5 percent in rewards
  • other Kroger purchases return 1 percent
  • everything else offers a measly 0.5 percent

Keep in mind that these rewards are not cash back. They’re store credit toward future purchases.

Alternatively, the Citi Double Cash card offers 2 percent cash back on all purchases, blowing the Kroger card out of the water. Better yet, the American Express Blue Cash Preferred offers a whopping 6 percent cash back on up to $6,000 spent each year on all grocery store purchases.

4. Low fees

The Kroger card has no annual fee, but it charges high fees in other areas. For example, it has a balance-transfer fee of 4 percent, where most cards only charge 3 percent. Cash advance and ATM withdrawal fees are also 4 percent with a $10 minimum. It also has a 2.8 percent foreign transaction fee, while many cards now have no such fee.

In contrast, the Chase Slate card offers 15 months of interest-free financing on both new purchases and balance transfers, with no balance-transfer fee.

What should you do?

When offered this stinker of a card on your next trip to the grocery store, politely decline with a knowing smile. And when you’re pitched other retail credit cards, take an application home, do your research, and make sure it has everything a reward credit card should have before you apply.

Meet the Author

Jason Steele

Jason Steele


Steele is a freelance writer for and is an expert on credit cards.

Credit & Debt

balance transfer, credit card reviews, credit cards

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Article last modified on August 29, 2018 Published by, LLC . Mobile users may also access the AMP Version: Kroger 1-2-3 Rewards Card: Everything You Don't Want And More! - AMP.