The other day, my wife and I received a Kroger 1-2-3 Rewards Master Card offer. Here’s what it offers:
- 0% introductory APR on purchases and balance transfers until October 2006.
- Earn 1 point for each $1 spent outside of Kroger
- Earn 1 point for each $1 spent at Kroger (including fuel centers).
- In addition, you can earn 3 extra points for each $1 spend on Kroger’s private label brands.
- 2,000 extra points (worth $20 in free groceries) the first time you use the card.
Is it a good deal?
Looking at our budget, I see about $1,600 in expenses (groceries, household goods, gasoline, eating out, entertainment, clothing, and gifts) each month that we could charge on the card. Of those expenses, approximately $947 per month ($650 in groceries and $297 in gas) could be spent at Kroger. Of the amount spent at Kroger, 25% could be spent on Kroger’s private label products. So, here’s the math:
1 Point Purchases:
$652 per month X 1 point = 652 points per month
2 Point Purchases:
$947 per month X 2 points = 1,894 points per month
3 Point Purchases (Kroger private label products):
$650 X 25% = $163 per month
$163 per month X 3 points = 489 points per month
So, our total points per month would be 3,035, which would earn us 3 $10 gift certificates (the points are worth $.01 each) for use at Kroger. Of course, those gift certificates would go against next month’s spending since the points are based on the amount charged, so you would receive less points the following month.
The only way this would be beneficial is to MAKE SURE you don’t carry a balance on the card. Interest charges past October would really dilute the value of the points. Therefore, I wouldn’t recommend transferring money to this particular card unless you are sure you can pay it off before October.