How the Visa Credit Card Ban Affects My Shopping Habits

The popular cash back credit card Chase Freedom has announced its bonus categories for Quarter 2, and I’m already thinking of how I’ll be maximizing my return on purchases with this no-fee card.

Cardholders will earn 5% cash back, or 5X Ultimate Rewards points, by using their Chase Freedom Card at grocery stores and home improvement stores on purchases made April through June. The bonus is limited to the first $1,500 spent during the promo period, so you can earn $75 back by maxing out the bonus categories every quarter.

Kroger Bans Visa Credit Cards at Smith’s Stores

In the past, I’ve been able to maximize the grocery category at a neighborhood Smith’s Food & Drug store. Smith’s is a Kroger Co. subsidiary supermarket chain located in seven states.

Earlier this month, Kroger announced it would stop accepting Visa credit cards at more than 140 Smith’s stores effective April 3. All Smith’s stores in Arizona, Idaho, Montana, Nevada, New Mexico, Utah and Wyoming are affected by the new policy. The reason given is “excessive bank fees.” Other credit cards, such as American Express, Discover and MasterCard, as well as Visa debit cards will continue to be accepted as usual.

“Visa has been misusing its position and charging retailers excessive fees for a long time,” Mike Schlotman, Kroger’s executive vice president and CFO, said in a statement. “They conceal from customers what Visa and its banks charge retailers to accept Visa credit cards. At Smith’s, Visa’s credit card fees are higher than any other credit card brand that we accept.”

How the New Policy Affects Me as a Customer

This announcement puts a bit of a damper on my shopping habits. Although for just a few months, the Chase Freedom is the only credit card in my wallet that earns a bonus in the grocery category. I don’t know about you, but I take my point-earning activities seriously.

As much as I’m not fond of the idea of changing my grocery store of choice, I’m afraid I’ll be looking for other options, at least during the bonus period. I’m sure the neighboring Fresh Market, Harmons and Whole Foods will be happy to accept my Visa cards. I also have to reconsider other grocery stores every time I work on meeting the minimum-spending requirements on other Visa credit cards in the future.

Just to be clear, I’m not boycotting Smith’s. It’s convenient as I know where most of the items I frequently buy are located, plus I earn gas rewards on my purchases (although I don’t drive much, so it’s not a huge draw). I’m simply shifting my business to stores that accept my preferred form of payment. Being limited in my options isn’t an option for me.

This isn’t the first time Kroger has banned Visa credit cards. Last year, the chain dropped Visa credit as a payment method at its Foods Co. Supermarkets in California.

Have you been affected by Kroger’s new policy? If not, would you change grocery stores in my case?

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