Which 5% Rotating Bonus Category Card Should I Choose?

Chase, Discover, U.S. Bank and more offer cards that earn 5% cash back in categories that change quarterly. Here's how they stack up.

Robin Saks FrankelSeptember 19, 2020
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If a credit card offering killer rewards of 5% cash back caught your eye, chances are it's a quarterly rotating bonus category card. This means that those ultra-high rewards are earned in specific areas of spending — like supermarkets or gas stations — and those categories change every three months.

Typically, these cards don't charge annual fees, although maximizing them does require work. You'll have to keep track of those categories, and category "activation" is generally required each quarter. Plus, you'll face a spending cap in those bonus areas, and once you hit it, your earnings drop down to a mediocre 1% back. (You could at that point shift your spending to a flat-rate rewards card that does better than 1% back — but, of course, that's more to keep track of.)

If you're up for the challenge — and the high rewards — of a rotating bonus category card, here's a look at how some of the best stack up.

How to choose a 5% rotating bonus category card

5% back: Your options at a glance

Terms for 5% rotating rewards

Sign-up bonus

Intro APR offer

Chase Freedom Flex℠

5% cash back in quarterly bonus categories on up to $1,500 in combined spending each quarter (activation required). All other non-bonus-category spending earns 1% back. (This card also features fixed bonus rewards in other categories.)

Earn a $200 Bonus after you spend $500 on purchases in your first 3 months from account opening. Plus, new cardholders earn 5% cash back at grocery stores for the first year on up to $12,000 in spending.

0% intro APR on Purchases for 15 months, and then the ongoing APR of 14.99% - 23.74% Variable APR

Discover it® Cash Back

5% cash back on up to $1,500 in combined purchases in bonus categories up to the quarterly maximum each time you activate. After that, 1% back.

INTRO OFFER: Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. Just a dollar-for-dollar match.

0% intro APR for 14 months on purchases and balance transfers, and then the ongoing APR of 11.99% - 22.99% Variable APR

U.S. Bank Cash+™ Visa Signature® Card

5% cash back on the first $2,000 in combined eligible net purchases each quarter in two categories you choose; 2% cash back in one everyday category; and 1% back on all other spending.

$150 bonus after spending $500 in eligible net purchases within the first 90 days of account opening.

0% on Balance Transfers for 12 billing cycles, and then the ongoing APR of 13.99% - 23.99% Variable APR

ABOC Platinum Rewards Mastercard® Credit Card

5 points per $1 on up to $1,500 in combined spending on categories that change each quarter. After that, 1 point back.

Earn a $150 Statement Credit after you spend $1,200 on purchases within the first 90 days from account opening.

0% on Purchases for 12 months, and then the ongoing APR of 12.90% - 22.90% Variable APR

Nerd tip: The Citi Dividend Card also features 5% rotating cash-back categories that you activate, as does the Chase Freedom®. But neither card is accepting new applications.

Chase Freedom Flex℠

Chase Freedom Flex
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The Chase Freedom Flex℠ is a valuable and potentially lucrative card that you can maximize for everyday spending. It earns 5% cash back in quarterly bonus categories on up to $1,500 in combined spending each quarter. Activation of bonus categories is required. (See the quarterly 5% bonus calendar below.) In addition, it offers:

  • 5% back on travel booked through Chase Ultimate Rewards®.

  • 3% back on dining, including takeout and delivery services.

  • 3% back on drugstore purchases.

  • 1% on all other purchases.

Nerd tip: Through March 31, 2022, cardholders also earn 5% back on qualifying Lyft services purchased through the Lyft app.

Rewards come in the form of Chase Ultimate Rewards® points, which are worth a penny each when redeemed for cash back.

Pros

Cons:

  • Each quarter's bonus categories are announced only a few weeks prior to the activation date and may not align with your spending habits.

  • Additional bonus tiers make the card more complicated to manage than others.

  • There's a foreign transaction fee of 3%.

Chase Freedom® and Chase Freedom Flex℠* bonus rewards categories for 2020

Q1 (Jan. 1 - March 31)

• Gas stations. • Select streaming services. • Internet, cable and phone services.

Q2 (April 1 - June 30)

• Grocery stores. • Gym memberships and fitness clubs. • Select streaming services.

Q3 (July 1 – Sept. 30)

• Amazon.com. • Whole Foods Market.

Q4 (Oct. 1 – Dec. 31)

• Walmart. • PayPal.

*The Chase Freedom Flex℠ was introduced in mid-September 2020, so the first bonus categories that apply to the card for a full quarter are those for Q4.

Discover it® Cash Back

Discover it® Cash Back
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The Discover it® Cash Back also earns 5% back on up to $1,500 in spending on rotating quarterly categories (activation required; 1% back on all other purchases). Bonus categories historically have included things like restaurants, grocery stores, home improvement stores, and Amazon.com. But this card has a distinctive sign-up offer not found on similar products. The issuer describes it this way: "INTRO OFFER: Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. Just a dollar-for-dollar match."

Pros:

  • Unique and potentially lucrative sign-up bonus.

  • Bonus categories for each quarter are announced at the beginning of the year, so planning is easier.

  • No foreign transaction fees.

Cons:

  • You won't get the sign-up bonus until the end of your first year.

  • Discover cards are not as widely accepted outside of the U.S. as are Visa and Mastercard.

  • Bonus rewards are not retroactive upon activation.

Nerd tip: The Discover it® Cash Back isn't the only Discover card with this rewards structure. Other 5% rotating bonus category cards from the issuer include the Discover it® Student Cash Back and the NHL® Discover it®.

Discover bonus rewards categories for 2020

Q1 (Jan. 1 – March 31)

• Grocery stores. • CVS. • Walgreens.

Q2 (April 1 – June 30)

• Gas stations. • Uber and Lyft. • Wholesale clubs. • June only: Home Depot.

Q3 (July 1 – Sept. 30)

• Restaurants. • PayPal.

Q4 (Oct. 1 – Dec. 31)

• Amazon.com. • Target.com. • Walmart.com.

U.S. Bank Cash+™ Visa Signature® Card

The U.S. Bank Cash+™ Visa Signature® Card is the most flexible rotating bonus category card of them all — but it's also perhaps the most complicated. You can choose two 5% categories per quarter from a list of 12, with a combined quarterly spending cap of $2,000. Plus, you get to pick one 2% cash-back category from a list of three "everyday" choices (like gas stations or grocery stores) without a spending cap. All other spending earns an unlimited 1% cash back. That's impressive, if also work-intensive.

Pros

  • 5%-back categories are customizable, and you get two of them each quarter up to the combined $2,000 cap.

  • That quarterly spending cap is higher than those on similar rotating category cards.

  • Unlike other similar cards, you also get an unlimited 2% back in one everyday category.

Cons

  • The rewards structure is complex and requires careful review each quarter. (For example, "fast food" is a 5% category, while "restaurants" is a 2% category.)

  • You won't start earning bonus rewards until three business days after you activate them, and they're not retroactive.

  • It's got a foreign transaction fee: 2% of each foreign purchase transaction in U.S. dollars; 3% in a foreign currency.

  • You can redeem for literal cash only if you bank with U.S. Bank. Otherwise, you'll have to take your earnings as a statement credit or reward card.

ABOC Platinum Rewards Mastercard® Credit Card

ABOC Platinum Rewards
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The ABOC Platinum Rewards Mastercard® Credit Card earns 5 points per $1 on up to $1,500 in combined spending on categories that change each quarter (1X back after that). But unlike with its competitors, you don't need to activate the categories each quarter; a one-time registration at ABOCRewards.com will automatically enroll you each quarter.

Pros

  • Quarterly activation isn't required. After a one-time registration, you're all set.

  • No foreign transaction fees.

Cons

  • While you can redeem points for travel, gift cards, merchandise or statement credit, literal cash back is not an option.

  • Redemption values are poor for anything other than travel. You'll get only 0.75 cent per point for statement credit, for example.

  • This card used to be available to applicants with average credit or better; now it requires excellent credit.

ABOC bonus rewards categories for 2020

Q1 (Jan. 1 – March 31)

• Recurring payments (including utilities, cell phone plans, cable, insurance payments, streaming services and subscription services).

Q2 (April 1 – June 30)

• Dining. • Groceries. • Transportation expenses: Rideshare services, gas and mass transit.

Q3 (July 1 – Sept. 30)

• Dining. • Entertainment (including movies and theme parks). • Travel purchases: Airfare, cruises, car rentals, hotels, timeshares and travel agency services. • Transportation expenses: Gas, tolls, rideshare services and mass transit.

Q4 (Oct. 1 – Dec. 31)

• Holiday shopping (including superstores, department stores, electronics stores, Costco.com and Amazon.com).

Alternatives to rotating bonus category cards

Tracking categories? Activating them each quarter? Minding your spending caps? Does all of this sound like too much work for 5% back? If so, you have other options for earning high rewards rates, depending on how much maintenance you're willing to do.

American Express Blue Cash Preferred Credit Card
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If you want bonus categories that don't move around on you, consider a card with a tiered (but consistent) rewards system that earns its highest rates in areas where you spend the most, all year round. If, for example, groceries are your biggest household expense, you might benefit from the Blue Cash Preferred® Card from American Express. Unlike these other cards, there's an annual fee of $0 intro for the first year, then $95. But in exchange, you'll rack up rich rewards across a wide range of bonus categories: 6% cash back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%); 6% back on select U.S. streaming services; 3% back at U.S. gas stations and on eligible transit; and 1% back on other purchases. Terms apply.

Or maybe you're dead-set against an annual fee. In that case, you might want to take a look at the Wells Fargo Propel American Express® card. This offers a juicy sign-up bonus, not to mention triple points on dining, gas stations, rideshares and transit, multiple kinds of travel expenses and eligible streaming services. Terms apply.

PayPal Cashback Mastercard
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And if even that sounds like too much category tracking? You can opt for a rewards card that earns one high flat rate back on everything you buy — no need to remember any bonus categories. The PayPal Cashback Mastercard® fits that bill, offering 2% cash back on every purchase, for an annual fee of $0.

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