Which 5% Rotating Bonus Category Card Should I Choose?

If a credit card offering 5% cash back caught your eye, chances are it's a rotating bonus category card. This means it earns that ultra-high rewards rate in specific spending categories — such as grocery stores or gas stations — and those categories change periodically.

Typically, these cards don't charge annual fees, although maximizing them does require work. For most cards, you'll have to keep track of those categories, and category "activation" may be required each quarter. Plus, you'll face a spending cap on bonus rewards; once you hit that cap, your earnings drop down to 1%. (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.

» MORE: Best credit cards that earn 5% cash back

How to choose a 5% rotating bonus category card

• Your options at a glance

• Chase Freedom Flex®

• Discover it® Cash Back

• U.S. Bank Cash+® Visa Signature® Card

• Citi Custom Cash® Card

• Alternatives to rotating bonus category cards

Top credit cards that earn 5% back

» MORE: Credit cards that offer customizable rewards

Chase Freedom Flex®

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.

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

• 3% back on drugstore purchases.

• 1% on all other purchases.

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

Pros

• 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.

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%.

» MORE: Read our full review of the Chase Freedom®

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, and home improvement stores. 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 for all new cardmembers – 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. You could turn $150 cash back into $300."

» MORE: Compare the Chase Freedom® vs. Discover it® Cash Back

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.

» MORE: Read our full review of the Discover it® Cash Back

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 (see the list below), 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 of 3%.

• 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.

» MORE: Read our full review of the U.S. Bank Cash+® Visa Signature® Card

Citi Custom Cash® Card

The Citi Custom Cash® Card works differently than many in its category. It earns 5% back in one eligible spend category, on up to $500 each billing cycle, and an unlimited 1% back on all other purchases. Unlike other cards that feature set rotating categories each quarter and require activation, rewards from the Citi Custom Cash® Card are automated and adjusted based on your spending habits each billing cycle. Plus, the list of categories is robust, and features popular line items like grocery stores, restaurants, select travel and home improvement stores, among others.

The ability to earn lucrative ongoing rewards in broad and useful everyday spending categories makes the Citi Custom Cash® Card especially valuable, especially considering its $0 annual fee.

Rewards are earned in the form of Citi ThankYou® Points, which can be redeemed for cash back as a direct deposit, check or statement credit at a value of 1 cent per point.

Pros

• Earn 5% rewards in categories that automatically adjust each billing cycle based on your spending habits.

• There's no need to remember to activate current bonus categories.

Cons

• Low spending cap: you'll earn 5% on one bonus category each billing cycle, up to $500, but anything else you spend on the card will earn just 1%.

• While the card offers 10 bonus categories, you're limited to earning 5% in just one bonus category each billing cycle.

• Rewards structure could be pleasantly low-maintenance for some, but high-maintenance for others who want to maximize every purchase.

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

» MORE: Read our full review of the Citi Custom Cash® Card

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.

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 it does charge a fee, currently: a $0 intro annual fee 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 (see rates and fees).*

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 Wells Fargo Active Cash® Card fits that bill, offering 2% cash back on purchases for an annual fee of $0.

To view rates and fees of the Blue Cash Preferred® Card from American Express, see this page.