What a restaurant credit card does
A restaurant credit card is a rewards card that gives you cash back or points when you spend money at restaurants, bars, and food delivery services. Most cards offer a higher rewards rate at restaurants than they do at grocery stores or gas stations — often 3% to 4% cash back at dining merchants, compared to 1% or less everywhere else.
The card works like any other credit card: you charge your meal, the issuer pays the restaurant, and you pay the issuer a monthly bill. The difference is that you earn rewards on top of that transaction. Some cards also offer perks like dining credits, priority reservations through apps like Resy, or statement credits toward food delivery services.
The trade-off is usually an annual fee, which ranges from $0 to $450 depending on the card. Cards with no annual fee tend to offer lower rewards rates or fewer perks. Cards with higher annual fees typically offer larger dining credits or bonus rewards that can offset the cost if you eat out regularly.
Key Takeaways
- Restaurant cards reward you at a higher rate for dining purchases than standard cash-back cards, typically 3% to 4% back at restaurants versus 1% elsewhere.
- Most restaurant cards charge an annual fee, which may be worth it only if you dine out frequently enough to earn back the fee in rewards.
- Some cards include dining credits or statement credits that reduce the effective cost of the annual fee.
- You need to pay your monthly bill in full to avoid interest charges that will erase any rewards you earned.
- The best card for you depends on where you eat most often, how much you spend annually, and whether you use food delivery services.
How rewards are calculated and redeemed
When you use a restaurant credit card, the issuer tracks your spending by merchant category. Restaurants, bars, and food delivery services fall into one category and earn the higher rate. Everything else — groceries, gas, hotels, retail — earns a lower rate, usually 1% cash back.
Rewards accumulate as you spend. With cash-back cards, you can redeem your balance as a statement credit, a check, or a deposit to a bank account. With points-based cards, you redeem through the card issuer's website or app, usually for travel, gift cards, or merchandise. Some cards let you transfer points to airline or hotel partners, though the value is often lower than cash back.
The key detail is that rewards are only valuable if you pay your bill in full each month. If you carry a balance, the interest you pay will almost always exceed the rewards you earned. A card offering 4% cash back becomes a net loss if you're paying 18% to 24% interest on the balance.
Annual fees and when they make sense
Restaurant cards fall into three fee categories: no annual fee, moderate annual fee ($95 to $150), and premium annual fee ($250 to $450).
No-annual-fee cards are worth considering if you dine out occasionally or want to test whether a rewards card fits your spending. These cards typically offer 2% to 3% cash back at restaurants, which is lower than premium cards but still better than a standard 1% card.
Cards with a $95 to $150 annual fee usually include a dining credit of $50 to $100 per year, which reduces the true cost of the fee. They also offer higher rewards rates — often 3% to 4% at restaurants — and may include perks like priority reservations or statement credits at specific restaurants. These cards make sense if you spend $3,000 or more per year at restaurants.
Premium cards with $250+ annual fees typically include $100 to $200 in annual dining credits, plus additional perks like lounge access or concierge services. These cards are designed for people who dine out frequently and value the perks as much as the rewards. You should expect to spend at least $10,000 per year at restaurants to justify the fee.
Comparing restaurant cards to general rewards cards
A general cash-back card offers 1% to 2% back on all purchases, with no category bonuses. A restaurant card offers 3% to 4% at restaurants but only 1% elsewhere. The choice depends on your spending pattern.
If you spend most of your discretionary money at restaurants and bars, a restaurant card will earn you more rewards. If you split your spending evenly between restaurants, groceries, gas, and retail, a general card or a card with multiple bonus categories may be better. Some people carry both: a restaurant card for dining and a general card for everything else.
Restaurant cards also tend to have higher annual fees than general cards. A no-annual-fee general card earning 1.5% everywhere may be a better choice than a $95-annual-fee restaurant card if you don't eat out often enough to offset the fee.
How to choose the right restaurant card for your spending
Start by tracking where you actually spend money over the next month or two. Add up your restaurant, bar, and food delivery charges. If the total is less than $1,500 per year, a no-annual-fee card is your best option. If it's $1,500 to $5,000 per year, a moderate-fee card with a dining credit may pay for itself. If it's more than $5,000 per year, a premium card could be worth the higher fee.
Next, look at where you eat most often. Some cards offer bonus rewards at specific restaurant chains or delivery services. If you frequently use one delivery app or eat at the same restaurants, a card with a bonus at those merchants will earn you more than a flat-rate card.
Check whether the card includes perks you'll actually use. Priority reservations through Resy or OpenTable are valuable only if you book restaurants in advance. Dining credits are valuable only if they cover restaurants you already visit. Lounge access is worthless if you don't travel frequently.
Finally, read the rewards terms carefully. Some cards cap the bonus rate at a certain amount per year, or they reduce the rate after you hit a spending threshold. Others exclude certain types of restaurants or require you to register for the bonus. These limits can significantly reduce the value of the card.
What happens if you carry a balance
Credit card interest rates typically range from 16% to 24% annually. If you charge $1,000 to a restaurant card and carry that balance for a year, you'll pay $160 to $240 in interest. Even a 4% rewards rate would earn you only $40 on that same $1,000 purchase. The interest cost far exceeds the reward.
This is the most common mistake people make with rewards cards: they focus on earning rewards and ignore the interest they're paying. The math is straightforward: if you can't pay your bill in full each month, a rewards card is not for you. A standard card with no annual fee and no rewards is a better choice because at least you won't be tempted to overspend.
If you're currently carrying a balance on another card, pay that off before opening a restaurant rewards card. The interest you're paying is almost certainly higher than any rewards you could earn.
Restaurant cards and dining apps
Many restaurant cards offer bonus rewards or statement credits when you use food delivery apps like DoorDash, Uber Eats, or Grubhub. Some cards offer 5% cash back on delivery orders, while others offer a $15 monthly credit toward delivery purchases.
These bonuses are valuable if you regularly order delivery. However, delivery apps charge restaurants a commission of 15% to 30%, which means the food costs more than it would if you ordered directly from the restaurant. A 5% rewards bonus doesn't offset a 20% delivery markup. If you want to maximize rewards and minimize costs, order directly from restaurants when possible and use delivery only occasionally.
Some cards also offer credits at specific restaurant chains or partnerships. These credits are usually $10 to $25 per month and can be used only at participating merchants. Check whether the restaurants in the partnership are places you actually visit before choosing a card based on this perk.
Frequently Asked Questions
Do I need good credit to get a restaurant credit card?
Most restaurant cards require good to excellent credit, which typically means a credit score of 670 or higher. Some issuers have cards for people with fair credit, though these usually offer lower rewards rates or higher annual fees. You can check your credit score for free through your bank or through sites that offer free annual credit reports.
Can I use a restaurant card at grocery stores or gas stations?
Yes, but you'll earn a lower rewards rate — usually 1% cash back instead of 3% to 4%. The higher rate applies only to merchants classified as restaurants, bars, or food delivery services. Grocery stores and gas stations are separate categories and earn the lower rate even if they sell food.
What if I don't dine out very often?
A restaurant card probably isn't the right choice for you. A general cash-back card earning 1.5% to 2% on all purchases will earn you more rewards overall, and you'll avoid paying an annual fee. Restaurant cards are designed for people who spend a significant portion of their discretionary income on dining.
Can I earn rewards on takeout orders?
Yes. Most restaurant cards treat takeout the same as dine-in purchases and award the full bonus rate. However, some cards may classify takeout differently depending on how the restaurant processes the transaction. If you order through the restaurant's own app or website, it may be coded as a food delivery service rather than a restaurant, which could affect your rewards rate. Check your card's terms or contact the issuer if you're unsure.
What's the difference between cash back and points?
Cash back is a direct reduction in your bill, usually worth 1 cent per point. Points are a currency you redeem for specific rewards like gift cards or travel, and their value varies depending on what you redeem them for. Cash back is simpler and more flexible, while points can sometimes be worth more if you redeem them strategically — but they can also be worth less if you redeem them poorly.