Some credit cards offer 5% cash back rewards in categories that change every few months. These rotating category cards offer increased rewards on a limited amount of spending in categories that rotate quarterly. They can be a great way to increase the amount of credit card rewards you earn.
If you are a fan of earning credit card rewards, you should have one or more of these cards in your wallet.
How rotating category cards work
Rotating category cards offer increased cash back rewards in spending categories that change periodically. These categories sometimes include very usable categories like grocery stores and gas. But sometimes they include specific merchants or categories like streaming services, where you’re not likely to spend much money. The rotating category cards offering 5% back usually cap the amount of bonus rewards you can earn. Caps on bonus spending are typically $1,500 in spending per quarter, $500 per month or $6,000 per year.
Most rotating category cards require you to activate your bonus rewards each quarter. The card issuers usually publish which categories earn additional rewards the month before a quarter begins. For example, additional rewards during January-March are typically announced mid-December. It’s generally a good idea to activate your bonus rewards as soon as you can. Most card issuers only give you bonus rewards for purchases made after you activate.
The traditional rotating category cards
Discover it® Cash Back – The OG 5% cash back card
The Discover it® Cash Back card was the first major credit card to offer rotating cash back categories. The card earns 5% cash back rewards on up to $1,500 in purchases in categories that rotate quarterly. Typical categories include places like Amazon.com, grocery stores, restaurants and gas stations. You must activate your cash back categories prior to making your purchases if you want to earn bonus cash back. New cardmembers earn double cash back, meaning for the first year, you can earn 10% cash back on rotating categories.
More about Discover it®
Discover it® Cash Back is the original credit card offering 5% cash back rewards on spending in rotating categories. The card offers new cardmembers double cash back rewards in the first year and has an annual fee of $0.
The card’s rewards structure is relatively simple. Each quarter, Discover publishes the Discover it® Cash Back bonus categories. Spending in these categories earns 5% cash back, on up to $1,500 in spending during the quarter. All other spending earns 1% cash back.
Unfortunately, Discover eliminated most of the additional benefits on its cards, so the Discover it® Cash Back card has no notable additional benefits.
Discover It Cash Back: Get a $100 statement credit when you’re approved and use the card within the first three months. Plus, get all of your cash back doubled in your first year of having the card.
Our take on the welcome bonus: Discover only offers a $100 statement credit if you apply through a referral link. We know of no higher offer available on this card.
The link above is a referral link. Someone on our team may earn points if you apply and are approved to the link above.
Annual fee: $0
Rewards: 5% on quarterly cash back categories when you activate. 1% on all other purchases. Plus, get a cashback match in your first year.
Chase Freedom Flex℠ – 5x rewards as Ultimate Rewards
The Chase Freedom Flex℠ and the previously available Chase Freedom card offer rotating 5% rewards in quarterly categories like the Discover card. Also similar to the Discover card, the Chase Freedom Flex limits the amount of purchases on which you earn 5% rewards. You only earn 5% rewards on up to $1,500 in rotating category purchases each quarter. But the Chase Freedom flex offers additional opportunities for cash back rewards. The card earns 3% on dining and drugstores and 5% cash back on travel purchases through Chase Ultimate Rewards. I like the card for its extended warranty and its cell phone protection benefits.
More about Chase Freedom Flex℠
The Chase Freedom Flex℠ is Chase’s take on the 5% rotating category card, offering increased rewards in limited-time categories that are announced quarterly. The Freedom Flex has no annual fee.
The Freedom Flex offers 5% back on up to $1,500 spent each quarter in rotating bonus quarterly categories. Categories have historically included purchases at grocery stores, Amazon.com, gas stations and big box retailers. In addition, the card offers 3% cash back on restaurants and drugstore purchases and 1% cash back on everything else. All rewards are earned as Ultimate Rewards points, but can be redeemed for cash back.
In addition to cash back rewards, the Chase Freedom Flex℠ offers a generous suite of benefits for a card with no annual fee. The card protects your purchases with Purchase Protection, Extended Warranty Protection, and Cell Phone Protection and it offers protection for your travels with secondary auto rental collision damage waiver insurance and trip cancellation/interruption insurance.
Learn more and apply for the Chase Freedom Flex. Earn a $200 bonus after you spend $500 on purchases in the first 3 months from account opening.
While the above offer is the best public bonus that we can link to directly, you might be able to get a better offer. Learn more about the secret Chase Freedom welcome bonuses we found.
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Citi Dividend – 5% cash back on up to $6,000 of spending
Finally, the Citi Dividend card rounds out the traditional rotating category cash back cards. The Citi Dividend offers 5% cash back in categories that rotate quarterly, but the limits on its cash back earnings are structured differently. Rather than limiting the amount of cash back you can earn in a quarter, the Dividend card limits the amount of cash back you can earn during the year to $300. This means that you can choose to earn 5% cash back in a few of its rotating categories or simply earn 5% on up to $6,000 of spending in one category during the year. Note that the $300 limit is across all cash back categories. Once you’ve hit that limit, no further purchases made using the card will earn cash back.
Unfortunately, the Citi Dividend card is no longer available to new cardmembers.
Non-traditional rotating category cards
Citi Custom Cash℠ – 5% on your top category each month
The Citi Custom Cash℠ card offers a different take on rotating category cards. Rather than selecting a category each quarter, you simply earn 5% back on the first $500 you spend in your top eligible category, each billing cycle. Eligible categories include restaurants, gas stations, grocery stores, select travel, select transit, select streaming services, drugstores, home improvement stores, fitness clubs and live entertainment. And you don’t have to select a category; Citi selects your monthly category based on where you have spent the most. After $500 in spending, all of your purchases earn 1% rewards.
U.S. Bank Cash+ – 5% on two categories each quarter
The U.S. Bank Cash+ card lets you pick two categories that earn 5% cash back each quarter. The U.S. Bank Cash+ lets you pick from a long list of categories, including fast food, home utilities, department stores, cell phone providers, electronics stores, sporting goods stores, gyms/fitness centers, ground transportation, furniture stores, select clothing stores and more. The long list of categories and the option to change each quarter makes this card very useful for large planned purchases. The limits on your cash back earning are also higher than you get on either the Chase Freedom Flex or the Discover IT cards. You earn 5% cash back on your first $2,000 in combined purchases across your two categories each quarter.
The flexibility of the Citi Custom Cash and the U.S. Bank Cash+ give you a great tool to maximize your cash back rewards. Having one or both of these cards in your wallet likely means being able to choose 5% cash back categories that complement your other cards.
What is a good rotating category strategy?
Having a few rotating category credit cards in your wallet can be an easy way to get 5% back on a good chunk of your spending. And it doesn’t have to be terribly complicated.
Let’s say that the majority of your spending is on groceries, restaurants, gas, household utilities, and purchases that can be made at a big box store like Target, Walmart or Amazon. What kind of rewards could you get on these everyday purchases? Here’s what this looks like in the first quarter of 2023:
- Groceries – 5% using Chase Freedom or Discover it
- Restaurants – 5% using Citi Custom Cash (3% using Chase Freedom Flex)
- Gas – 5% using Citi Custom Cash
- Household utilities – 5% using the U.S. Bank Cash+
- Big box purchases – 5% using Chase Freedom (Target) or 5% using Citi Dividend (Amazon.com)
If you held just the Chase Freedom and the Citi Custom Cash, you could get 5% cash back on your everyday spending on groceries and purchases at Target and your gas purchases. You’d also get 3% back on your dining purchases because the Chase Freedom Flex offers that bonus category year-round.
Of course, if you held more of the rotating category cards you could optimize your spending further. But there are diminishing returns to holding more credit cards.
5% rotating category cards can be a great way to increase the rewards you earn on your everyday spending. Having one or two rotating category cards in your wallet can increase the rewards you earn on your everyday spending without adding much complexity to your wallet.