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.
5% back: Your options at a glance
|Chase Freedom®||Discover it® Cash Back||U.S. Bank Cash+™ Visa Signature® Card||Amalgamated Bank of Chicago Platinum Rewards Mastercard® Credit Card|
|Rewards||5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate; 1% back on all other purchases.||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.||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.||5 points on up to $1,500 in combined spending on categories that change each quarter. After that, 1%.|
|Sign-up bonus||Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening||Discover will match ALL the cash back you've earned at the end of your first year, automatically. There's no signing up. And no limit to how much is matched.||$150 bonus after spending $500 in eligible net purchases within the first 90 days of account opening.||Earn a $150 Statement Credit after you spend $1,200 on purchases within the first 90 days from account opening.|
|Intro APR offer||0% on Purchases and Balance Transfers for 15 months, and then the ongoing APR of 17.24% - 25.99% Variable APR||0% on Purchases and Balance Transfers for 14 months, and then the ongoing APR of 14.24% - 25.24% Variable APR||0% on Purchases and Balance Transfers for 12 billing cycles, and then the ongoing APR of 15.99% - 25.49% Variable APR||0% Intro APR on Purchases and Balance Transfers for 12 months, and then the ongoing APR of 14.90% - 24.90% Variable APR|
The Chase Freedom® is an easy-to-maximize card for everyday spending. It earns 5% back in bonus categories on up to $1,500 in combined purchases each quarter (1% back on all else). Activation is required. In the past, those categories have included typical household spending areas like grocery stores, warehouse clubs, restaurants and gas stations. Rewards come in the form of Chase Ultimate Rewards® points, which are worth a penny each when redeemed for cash back.
- Cash-back rewards can be taken as a statement credit or a direct deposit in a qualifying U.S. bank account.
- You can activate bonus categories retroactively — generally until the 14th day of the third month in the quarter — and still receive 5% back.
- The Chase Ultimate Rewards® program is flexible and valuable, and points can be combined across eligible accounts. If you also have the Chase Sapphire Preferred® Card or the Chase Sapphire Reserve®, your points are worth more when redeemed for travel through Chase.
- Each quarter’s bonus categories are announced only a few weeks prior to the activation date and may not align with your spending habits.
- There’s a foreign transaction fee of 3%.
Discover it® Cash Back
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: “Discover will match ALL the cash back you've earned at the end of your first year, automatically. There's no signing up. And no limit to how much is matched.”
- 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.
- 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.
U.S. Bank Cash+™ Visa Signature® Card
The U.S. Bank Cash+™ Visa Signature® Card is the most flexible and possibly the most lucrative rotating bonus category card of them all — but it’s also 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.
- 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.
- 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.
Amalgamated Bank of Chicago Platinum Rewards Mastercard® Credit Card
The Amalgamated Bank of Chicago Platinum Rewards Mastercard® Credit Card offers some unique features among cards in its class. What’s similar is that it 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 other rotating bonus category cards, applicants with just fair credit may be eligible to get it. Also unlike competitors, you don’t need to activate the bonus each quarter; a one-time registration at ABOCRewards.com will automatically enroll you each quarter. This card also boasts some welcome offers that aren’t typically seen on products designed for fair credit.
- Available to those with fair credit.
- Quarterly activation isn’t required. After a one-time registration, you’re all set.
- In a rarity among cards for fair credit, it offers a sign-up bonus: Earn a $150 Statement Credit after you spend $1,200 on purchases within the first 90 days from account opening. Plus, you’ll get a 0% Intro APR on Purchases and Balance Transfers for 12 months, and then the ongoing APR of 14.90% - 24.90% Variable APR.
- No foreign transaction fees.
- While you can redeem points for travel, gift cards, merchandise or statement credit, literal cash back is not an option.
- Redemption values vary depending on what you choose.
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.Blue Cash Preferred® Card from American Express. Unlike these other cards, there’s an annual fee of $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. Wells Fargo Propel American Express® card. This $0-annual-fee card 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® fits that bill, offering 2% cash back on every purchase, for an annual fee of $0.