How Do Credit Card Categories Work?

If you’ve seen enough episodes of The Price Is Right or Wheel of Fortune, you probably think that vacations aren’t cheap, and rightfully so. The number of zeroes you see on your screen are enough to put you off of going overseas.

However, a travel rewards credit card can reduce a trip’s price tag to a mere fraction of the original cost. Earning rewards is simple: swipe a card to pay for purchases and accumulate points. The more purchases you charge to your card, the faster you earn rewards and the closer you get to that reduced-cost vacation.

Many travel cards earn a flat 1 to 2 points per dollar spent, plus a multiplier of points in select bonus spending categories. So, let’s take a look at exactly how travel credit card bonus categories work.

» Learn more: How do travel credit cards work?

Travel credit card bonus categories work in two ways

Travel credit card bonus categories offer two ways to multiply your rewards: with set earning rates or with rates that change every month or quarter based on rotating categories. With both, you can earn bonus points and maximize your return on purchases.

Set earning rates

Most travel rewards credit cards offer consumers set earning rates on everyday spending. You’ll know upfront how many miles or points a card earns in various spending categories. Those bonus rewards rarely change, so you can rely on them pretty consistently. (A rare example of when they might change is if a card goes through a rebrand.)

General travel rewards cards, such as the Chase Sapphire Preferred® Card or the Citi Strata Premier℠ Card, often earn anywhere from 2x to 3x points in a few bonus categories, such as travel, restaurants, supermarkets and gas stations, and 1 point per dollar on other purchases.

A similar system applies to co-branded airline and hotel credit cards, such as the Delta SkyMiles® Gold American Express Card and the Citi® / AAdvantage® Platinum Select® World Elite Mastercard®. You'll typically see a higher earning rate on spending with the specific carrier or hotel chain and on a few bonus categories, such as purchases at U.S. restaurants, U.S. gas stations and U.S. supermarkets. Non-bonus categories typically earn 1 to 2 points per dollar with co-branded cards. Terms apply.

Make sure to evaluate your spending habits and ensure they align with a card’s bonus categories to earn point multipliers on your everyday purchases.

» Learn more: The best travel credit cards right now

Rotating bonus categories

Some cards on the market earn up to 5x points (marketed as 5% cash back) on spending in certain rotating bonus categories. So, every few months or quarter, travel credit card categories change, ranging from U.S gas stations and grocery stores to purchases at Walmart and Wholesale Clubs.

Top rotating category credit cards for travel include:

• Chase Freedom Flex®.

• Citi Custom Cash® Card.

• Discover it® Cash Back.

The rotating category credit cards have limits on the amount of extra rewards you can earn. For example, the Chase Freedom Flex® and the Discover it® Cash Back limit their bonus earnings to up to $1,500 spent per quarter in the select categories. For the Discover it® Cash Back, you'll earn 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. These cards also pre-set their bonus spending categories for you.

With the Citi Custom Cash® Card, your spending alone determines which category earns you the most points. Each billing cycle, you earn 5x points on the purchases you made in your top spending category, on up to $500 spent per month. The list of approved categories includes restaurants, gas stations, grocery stores, select travel, select transit, select streaming services, drugstores, home improvement stores, fitness clubs and live entertainment.

Although the Discover it® Cash Back is strictly a cash-back card, the other two cards earn travel rewards points in their respective programs.

The Citi Custom Cash® Card earns Citi ThankYou Points that can be transferred to airline partners. The Chase Freedom Flex® Ultimate Rewards® points can be transferred to air and hotel partners as long as you also hold either the Chase Sapphire Preferred® Card or the Chase Sapphire Reserve® card. You can pool rewards and use them in a way that maximizes their value.

All rewards earned with these credit cards can be used to book travel, such as airfare, hotel rooms and car rentals, through the card’s travel portal; or you can be reimbursed for travel expenses in the form of a statement credit.

» Learn more: How to redeem your points for your dream trip

Consider applying for a new card every so often

No matter how many points you earn in a certain spending category — whether it’s 5x points on airfare booked directly with airlines or with American Express Travel (on up to $500,000 on these purchases per calendar year) on The Platinum Card® from American Express or 4x points at restaurants worldwide (up to $50,000 in spending per year) with the American Express® Gold Card — you’ll always get the biggest return on your everyday spending by earning a welcome offer. Terms apply.

Say you apply for the Citi Strata Premier℠ Card. You'll get the chance to earn the following sign-up bonus: For a limited time, earn 75,000 bonus ThankYou® Points after spending $4,000 in the first 3 months of account opening, redeemable for $750 in gift cards or travel rewards at thankyou.com.

A new card bonus is most likely going to offer the highest reward per dollar spent. For that reason, you may want to consider applying for a new card every once in a while to earn a large welcome bonus and maximize the points you're earning while spending. Make sure you can meet the requirements comfortably without stretching your budget too thin or needing to pay interest, as paying interest would negate the value of your rewards.

» Learn more: The best travel credit card welcome bonuses right now

Final thoughts on travel credit card bonus categories

Travel credit card bonus categories are designed to help you earn points faster. Doubling or tripling your rewards on purchases in select bonus categories makes your points balance grow, putting that budget vacation within reach. Take a look at your everyday spending and swipe the right card at the right locations to multiply your return on purchases.