Updated April 3, 2017
Credit card reward programs come in so many varieties that it can be difficult find the best cards for your spending habits. A basic, flat-rate card that earns you a certain percentage cash back on all purchases is probably the simplest bet out there. Typically, rates range from 1-2%. Not shabby, especially if you use that card exclusively. But it’s not exactly something to call home about either.
There are even better cash back rewards offerings out there, some as high as 5%. But with these high rewards cards, there’s almost always a catch. Most of the cards don’t offer 5% cash back across the board. Every few months, they pick a few select shopping categories that can earn 5% cash back. Once those few months are up, the categories change. For example, a card could offer 5% cash back on groceries, gas and airfare from January to March, then switch those categories to whole sale stores, restaurants and gyms from April to June.
Additionally, there are sometimes caps on how much of your spending can qualify for the 5% reward. So if the cap is $1,500, for example, everything past that amount won’t qualify.
The key to maximizing these great cash back card offers is to find the cards that offer cash back in categories you use the most. We can help there.
We dug around and found 10 cards that offer at least 5% cash back in the three most common spending categories: gas, groceries and entertainment.
Chase Freedom®: Access to a Special Option 5% Category
How it works: The Chase Freedom® card offers 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate. This translates to a maximum return of $75 per quarter on the 5% bonus category. You earn an unlimited 1% cash back on all other purchases outside of the bonus categories. You can also earn a $150 Bonus after spending $500 on purchases in your first 3 months from account opening.
The 5% category changes every quarter.
Another area where the Chase Freedom shines is in how it allows customers to redeem their rewards. The cash you’ve earned converts into Ultimate Rewards points. Every $1 equals 100 points. You can easily use the cash and apply it to your monthly statement. Or you can convert them into points and use them on travel, gift cards, merchandise, and other services through the Chase Freedom® rewards dashboard.
They make it super simple to redeem points on the go through the Chase Freedom® Mobile app. While you’re shopping, you can pick the merchant from the list on of eligible merchants on your app (popular ones include Nike, Regal Cinemas, Lowe’s, Starbucks and Best Buy). Then tell the app how much cash you want to use. You’ll get a custom e-gift card that you can present at checkout to pay for your purchases.
Plus, you can stack the points earned on your Chase Freedom card with your points on other Chase rewards cards, like the Chase Sapphire. That just increases the spending power of your points.
The Fine Print: You can’t beat 5% cash back for your spending, especially with no annual fee. The downside is you have to remember to activate the category each quarter by subscribing to the program. But, if you set a reminder to do so, you can earn money without too much effort.
Discover it® Cashback Match™: The Original 5% Cash Back Card
How it works: With the Discover it® Cashback Match™ you can earn 5% cash back in rotating categories on up to the quarterly maximum ($1,500 of spend). You need to activate every quarter to get the 5% cash back rate. All other purchases get 1% cash back.
Earn 5% cash back in these categories through the end of 2017:
- January to March: Gas stations, ground transportation, and wholesale clubs.
- April to June: Home improvement stores and wholesale clubs.
- July to September: Restaurants.
- October to December: Amazon.com and Target
Using your rewards: Cash back from the Discover it is tracked in dollars and cents. You can immediately apply your cash back earnings to your bank account or as a statement credit toward your bill (note: your minimum payment will still be due).There’s also no minimum rewards value if you want to redeem them for charitable donations.
The fine print: You can only earn 5% cash back on up to $1,500 of spend each quarter you activate. Once you’ve hit that cap, you’ll earn 1% on the rest of your purchases. This adds up to a $75 maximum return on your rotating bonus categories. There is no annual fee.
Extra perks: On your one-year anniversary, Discover give you a dollar-for-dollar match of all the cash back you’ve earned during your first year. The match happens automatically, and is only available to new cardmembers during their first year.
Nusenda Visa Platinum Cash Rewards: Best for Gas and Restaurants in 2017
How it works: The Nusenda Visa Platinum Cash Rewards card gives 5% in revolving categories up to $1,500 and 1% on all other purchases. Notably, it offers both gas and restaurants in two quarters. As a bonus in the first 90 days, new cardholders will earn 2% instead of just 1% on purchases outside of the 5% category.
Earn 5% cash back in these categories through the end of 2017:
- January to March: Groceries and gas expenses.
- April to June: Movies, restaurants and home improvement.
- July to September: Gas and education expenses.
- October to December: Restaurants, hotels, and airfares.
Using your rewards: This offer stands out as a decent companion card for maximizing cash back. When coupled with the Chase Freedom or Discover it, you can maximize cash back in different areas during one quarter.
For an example, you can turn to the Nusenda Visa Platinum Cash Rewards card for 5% on gas and school expenses in Q3. Then pull out the Discover it for home improvement purchases for another 5% the same quarter.
The Fine Print: Once again, you’ll need to monitor your spending habits to get the most cash back from a revolving category card. If you choose to use this card along with another one, a good practice would be labeling the cards in your wallet to ensure you use the right one for the right purchases in a given quarter.
One final caveat: While there is no annual fee, Nusenda is a credit union, so you will have to go through the process of applying for membership.
U.S. Bank Cash+ Visa Signature: Pick Your Own Cash Back Categories
How it works: The U.S Bank Cash+ card has a revolving cash back program that’s unique in comparison to the others above because you get options.
Earning cash back: You can earn 5% cash back in two categories of your choosing each quarter limited to the first $2,000 of spend. Then you can choose another category with no cap to earn 2% cash back. On all other purchases, you earn 1% cash back.
The categories for an unlimited 2% cash back (choose one each quarter) are:
- Gas stations
- Grocery stores
The categories for 5% cash back up to $2,000 (choose two each quarter) are:
- Select clothing stores
- Cell phones
- Electronic stores
- Gyms and fitness centers
- Fast food restaurants
- Sporting goods stores
- Department stores
- Furniture stores
- Movie theaters
Using your rewards: You can redeem cash back for gift cards, statement credit or a deposit into a U.S. Bank Savings, Checking or Money Market account. The first time you redeem $100 in cash back in a single transaction, you get a $25 Cash+ Bonus.
The Fine Print: Same opt-in revolving category spiel applies here except you must also remember to choose your categories. There is no annual fee. The U.S. Bank Cash+ is another good example of a card you may want to couple with another that gives you higher cash back for necessities i.e. groceries. But, for diverse spenders who can benefit from the 5% category options, the U.S. Bank Cash+ is worth considering.
SimplyCash Plus Business Card from Amex: Ideal for Typical Business Expenses
How it works: The SimplyCash Plus Business Card gives 5% cash back on office supply and wireless telephone provider services. You also get 3% cash back on the category of your choice from a list of eight, including:
- Airfare purchased directly from airlines
- Hotel rooms purchased directly from hotels
- Car rentals purchased from select car rental companies
- U.S. gas stations
- U.S. restaurants
- U.S. purchases for advertising in select media
- U.S. purchases for shipping
- U.S. computer hardware, software, and cloud computing purchases made directly from select providers
Earning cash back: You have to choose your 3% category within two months of signing. If you don’t choose one, the default is gas stations. The combined annual cap for the 5% and 3% categories is $50,000. On all other purchases, you get 1% cash back.
Using your rewards: Cash back will appear as a credit automatically on your statement. This American Express card has no annual fee, so you’ll earn cash back with a generous cap at no cost.
The Fine Print: You must remember to choose your 3% cash back category every year. If you select one this year and forget to do so next year, you’ll be locked into the same 3% category for another 12 months until you make a switch. There is no annual fee.
Amazon Prime Store Card: 5% Cash Back for the Amazon Prime Enthusiast
How it works: The Amazon Prime Store Card is open to Amazon Prime Members, so it’s somewhat exclusive. The perks of this card is 5% cash back on eligible purchases made on Amazon.com. Buying items on other merchant websites that have the Amazon Prime Card payment option enabled will not earn you 5% cash back.
Using your rewards: The cash back you rack up will apply as a credit to your statement.
Do the math: If you’re not already an Amazon Prime Member, it’s probably not worth signing up to become one just for the card unless you intend to spend big bucks on the site. You need to spend more than $2,000 per year at Amazon.com for the 5% cash back to cover the $99 annual membership fee.
The Fine Print: The fine print of what you can and can’t buy to earn 5% is the only gotcha here. But, if you shop on Amazon.com often and stick to the rules, you’ll see a nice return from this card. There’s not an annual fee for the card, but you must be an Amazon Prime member, which costs $99 a year.
REDcard: Only a Good Fit for the Regular Target Shopper
How it works: For Target shoppers, there’s the REDcard. It gives you a 5% discount on your purchases at Target (minus any other discounts or promotions). Purchases that won’t earn 5% cash back include:
- Target eye exams
- Target gift cards and prepaid cards
- Previous purchases
- Target credit account payments, Target Debit Card cash back and cash advances on the Target MasterCard
- Gift wrap and shipping and handling on Target.com purchases
- Wireless protection program purchases and deposits required by mobile carrier
Earning and using rewards: The program is pretty simple as far as how Target gives you money back. Your 5% will apply to eligible purchases in your shopping cart at checkout. In addition to 5% cash back, this program includes free shipping from Target.com and 30 extra days for returns.
The Fine Print: No red flags with the REDcard other than watching out for the purchases excluded from cash back listed above. For faithful Target shoppers, this no annual fee card with the 5% discount may be a no brainer.
Fort Knox Visa Platinum Card: Most Straightforward 5% Rewards Card Just for Gas
How it works: The Visa Platinum Card from the Fort Knox Credit Union makes our list with the most straightforward, no cap rewards program. You can earn an unlimited 5% cash back on gas and 1% cash back on all other purchases.
Using your rewards: Cash back will appear on your statement as a credit.
The Fine Print: This rewards program is offered by a credit union in Kentucky. You’ll have to take a few extra steps to qualify for membership. If you don’t live in Kentucky or have family in Kentucky, membership is open to anyone that joins the American Consumer Council. There is no annual fee for the card, but you will need to become a member of the credit union.
Blue Cash Preferred from Amex: 6% Cash Back for the Heavy Grocery Shopper
How it works: The Blue Cash Preferred® is our top pick for cardholders that want to maximize cash back on groceries. With this card, you get 6% cash back at US supermarkets excluding superstores and warehouses up to $6,000 per year. You also earn 3% cash back at US gas stations and select US department stores and 1% cash back on everything else.
Bonus offer: In addition to the recurring cash back program, if you spend $1,000 within the first three months of signing up for the card you’ll get $200 cash back.
Using cash back: Cash back builds as Rewards Dollars you can redeem for statement credit in increments of $25.
The Fine Print: There is an annual fee of $95 per year.
USAA Cashback Rewards Plus Amex: Only Advantageous for Military Service Members Living On-Base
How it works: The USAA Cashback Rewards Plus Amex gives 5% cash back on gas and military base purchases including commissaries, exchanges, and shopettes. The cap for the 5% category is $3,000 per year.
Earning cash back: In addition to the 5% back on gas and military base purchases, you’ll also earn 2% cash back on groceries up to $3,000 annually. On everything else, there’s 1% cash back. You can redeem cash back in increments of $1 through the USAA Rewards Service Center online or over the phone.
The Fine Print: The USAA Cashback Rewards Plus Amex card is light on the fine print. Just remember, the 5% category cap is $3,000 for combined gas and military base purchases per year and not per quarter. There is no annual fee.
The Key to Earning from Any Cash Back Card
In closing, regardless of which cash back card you choose, be sure to pay off your bill in full each month. That’s one underlying trap of any card rewards program. If you carry a balance over time, adding interest into the equation means you may end up paying the credit card company more than what you’re making in cash back.