When it comes to cash-back credit cards, the highest rewards rate you’re likely to get is usually 5%. Spoiler alert: we’ve found one credit card that offers a bit more than 5%.
While those 2% flat cash-back cards can help you collect rewards on every purchase, and cash-back cards with 3% offer rewards in certain bonus categories, 5% cash-back cards may require some extra strategy to maximize. Most of the time, a high cash-back rate is found on cards with strict maximum spending thresholds, rotating bonus categories, or cards that are associated with a single retailer.
However, 5% cash back cards can provide significant savings on everyday purchases. Here’s our advice: before choosing a cash-back card, think about the grocery store/supermarket/retailer where you spend the most. This way you’ll choose a credit card that will help you earn some money back on items that are already in your budget.
Although each card has its own terms, they all offer rewards across either rotating quarterly categories or specific categories, allowing you to save some money on purchases like dining, gym memberships, gas, streaming services, and more.
How 5% cash-back credit cards work
New bonus categories are introduced each quarter, such as on groceries or gas, which can give you 5% cash back, up to a typically $1,500 quarterly maximum. After reaching the cap, you’re left with only 1% cash back on the rest of your purchases.
Usually, the card issuer pre-selects these bonus categories releasing them up to a year in advance through an annual cash-back calendar.
Without activating each quarter’s bonus categories, you cannot earn 5% cash back, so make sure you do this (the easiest way would be to use your card issuer’s mobile app). If you don’t activate a bonus category, all of your purchases will earn only 1% cash back.
If you’re looking for a credit card that will help you save some money, check out our list of the 6 best 5% cash-back credit cards on the market. Take a look and choose the one that matches best both your spending needs and habits.
1. U.S. Bank Cash+ Visa
The US Bank Cash+ Visa is a great option if you’d rather have a no-annual-fee credit card with flexible rewards to match your spending habits. If you choose this one, you’ll earn up to 5% cash back on up to $2,000 in purchases made per quarter.
There are two bonus categories that you can choose from, and they include options such as home utilities, electronics stores, streaming services, department stores, fast food, cell phone providers, and internet and TV services.
In addition, you’ll get 2% cash back on the second category of your choice (you can choose from dining, gas stations, and supermarkets), as well as 1% cash back on anything else. But the list of benefits doesn’t end here: there’s also a $200 sign-up bonus if you spend $1,000 in the first 120 days following the account opening. Plus, you’ll benefit from a 0% introductory APR on balance transfers for 18 months.
2. Discover it Cash Back
We know how important it is to find a credit card that truly fits your spending habits best. If you’re interested in a card with an attractive sign-up bonus and great rewards on popular categories such as gas stations, groceries, and restaurants, the Discover it Cash Back card is the way to go!
Cardholders can get 5% cash back on rotating bonus categories (each quarter introduces a different bonus category) including grocery stores, gym memberships, fitness clubs, Amazon.com, Target, and PayPal (up to a $1,500 limit). All other kinds of purchases are eligible for 1% cash-back.
The Discover it Cash Back card doesn’t come with a sign-up bonus, but the card issuer ensures new cardholders are rewarded: all cash-back you’ve been collecting gets doubled after the first year. This is great, especially for those who plan to make big purchases in the coming year.
Other benefits include 0% interest on all kinds of purchases for the first 14 months, 0 % introductory APR on balance transfers for 14 months, no foreign transaction fees, and no annual fee.
3. Citi Custom Cash Card
Bonus categories are definitely a great way to earn some cash back, but what if your spending habits change from month to month? Well, in this case, these patterns can do more harm than good when it comes to saving some money. If you think chasing bonus categories is a waste of time, the Citi Custom Cash Card is a great choice.
This credit card automatically earns you 5% cash back on your top monthly spending category, up to $500 in purchases. Once you reach the limit, you’ll earn 1% cash back on your purchases. All purchases that don’t fit in this category qualify for a 1% cash-back.
What’s great about this credit card is that it automatically adjusts to your spending habits. If they change the following month, the Citi Custom Cash Card’s features adjust to them, so you won’t lose out like you would with credit cards that have fixed quarterly bonus categories.
Here are the categories eligible for the 5% cash back: grocery stores, gas stations, drugstores, streaming services, home improvement, fitness club memberships, live entertainment, restaurants, and select travel and transit.
To maximize your rewards, you can convert your cash back into Citi ThankYou points. Once you do this, you can transfer them to any of Citi’s airline partners — a way through which they become more valuable.
Extra benefits include:
- a $200 cash back sign-up bonus after spending $750 on purchases made within the following 3 months after account opening
- 0% introductory APR on balance transfers and purchases for 15 months (then 13.99% to 23.99% variable)
- no annual fee.
Keep reading to find out which credit card offers you 6% cash back on your purchases!
4. Chase Freedom Unlimited
The Chase Freedom Unlimited card is still one of the top no-annual-fee credit cards for earning Chase Ultimate Rewards. The Freedom Unlimited is a great way to get started with Chase points while also enjoying other valuable benefits.
As an intro offer, you can earn a $200 sign-up bonus if you spend $500 on purchases during the three months of account opening. In addition, if you spend more than $6,000 on gas station purchases in the first 12 months, you can get 5% cashback.
This credit card can help you earn 5% cash back on travel purchases via Chase Ultimate Rewards, 3% cash back on eligible drugstores and dining, and 1% cash back on all other kinds of purchases.
Let’s say you spend $250 at a restaurant on a Friday evening. If you have a Chase Freedom Unlimited card, you’ll earn back 3% of your bill or 750 Chase Ultimate Rewards points, which can be redeemed for $7.5 in cash-back.
The Freedom Unlimited Rewards don’t expire. Also, there’s no minimum limit to redeem for cash back. You can redeem every dollar through Chase’s Ultimate Rewards program to pay for travel or other qualified services or products.
In addition, cardholders receive extra points at the end of each monthly billing cycle.
5. Blue Cash Preferred (American Express)
American Express Blue Cash Preferred is a fantastic choice if you want to earn valuable rewards on your supermarket spending. The credit card now gives a whopping 6% cash back on every supermarket in the country for up to $6,000 in purchases each year. After this limit, the credit card offers 1% cash back.
It also gives 6% cash back on streaming services, 3% cash back at all US gas stations and certain transit, and 1% cash back on all other kinds of purchases. Here are some other benefits:
- a 0% introductory APR on all purchases made within the first year after account opening (after this, 13.99% to 23.99% variable)
- a $300 sign-up bonus in statement credits after spending $3,000 in purchases within the first half of the year following the account opening
- a 0% introductory annual fee available for the first year (after this, $95 per year)
- a great return protection policy that allows you to ask for a refund of up to $300 per product (up to a threshold of $1,000 per year) for any allowable product purchased with Blue Cash Preferred (this is only available within 90 days of the purchase date if the seller refuses to accept it back).
6. Chase Freedom Flex
Known as one of the best 5% cash back credit cards, the Chase Freedom Flex provides quarterly rotating 5% spending categories which include gas stations, home improvement stores, wholesale clubs, PayPal, and Walmart.
The reward will show in the account after spending $1,500 on the quarter’s category purchases. To receive the cash back, you must activate each quarterly bonus manually. Don’t worry about it as Chase will send you an email where you can activate the promotion.
The list of benefits also includes:
- 5% cash back on travel purchased via Chase Ultimate Rewards
- 5% cash back at US gas stations on the first $6,000 spent in the first 12 months
- 3% cash back on dining (including takeout and delivery) on up to $12,000 of purchases made in the first 12 months
- 1% cash back on all other purchases
- a $200 bonus after spending $500 on purchases made within the first 90 days after account opening
- cell phone protection
- 0% intro APR financing on purchases for 15 months
- no annual fee.
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