Credit card reward programs come in so many varieties that it can be difficult to 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 itâ€™s not exactly something to write home about either.
There are even better cash back rewards offerings out there, some as high as 5%. But with these high-reward cards, thereâ€™s almost always a catch, since most donâ€™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 wholesale 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 wonâ€™t qualify for the higher reward.
The key to maximizing these great cashback card offers is to find ones that offer cash in the categories you use the most. We dug around and found 10 cards that offer at least 5% cash back in some of the most common spending categories including gas, groceries and entertainment.
on Chase Bankâ€™s secure website
How it works: The Chase FreedomÂ® card lets you Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate. Enjoy new 5% categories every 3 months. Unlimited 1% cash back on all other purchases.Â 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.
Another area where theÂ Chase FreedomÂ® shines is in how it allows customers to redeem their rewards. The cash youâ€™ve earned converts into Chase Ultimate RewardsÂ® 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 theÂ Chase FreedomÂ® rewards dashboard.
They make it super simple to redeem points on the go through the Chase FreedomÂ®Â Mobile app. While youâ€™re shopping, you can pick the merchant from the list on of eligible merchants on your app (popular ones include Nike, Regal Cinemas, Loweâ€™s, Starbucks and Best Buy). Then tell the app how much cash you want to use. Youâ€™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 yourÂ Chase FreedomÂ®Â card with your points on other Chase rewards cards, like theÂ Chase Sapphire PreferredÂ® Card and the Chase Sapphire ReserveÂ®.Â That just increases the spending power of your points.
The Fine Print: You canâ€™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.
How it works: With the Discover itÂ® Cash BackÂ you earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com, or wholesale clubs up to the quarterly maximum each time you activate ($1,500). 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 2019:
Using your rewards: Cash back from the Discover itÂ® Cash BackÂ 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). Thereâ€™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 youâ€™ve hit that cap, youâ€™ll earn 1% unlimited cash back automatically on all other purchases.. This adds up to a $75 maximum return on your rotating bonus categories. There is no annual fee.
Extra perks: As an Intro Offer, Discover will match ALL the cash back youâ€™ve earned at the end of your first year, automatically. Thereâ€™s no signing up and no limit to how much is matched.
How it works: The VisaÂ® Platinum Rewards Credit Card from Nusenda Credit Union lets youÂ Earn 3 bonus points, or 5% cash back, respectively, for every dollar they spend on purchases for movies, restaurants, and home improvements (up to $1,500 per quarter). Notably, it offers both gas and restaurants in two quarters. As a bonus New card holders earn 10,000 bonus points for $500 in purchases during first 90 days.
Earn 5% cash back in these categories through the end of 2019:
Using your rewards: This offer stands out as a decent companion card for maximizing cash back. When coupled with theÂ Chase FreedomÂ® or Discover itÂ® Cash Back, you can maximize cash back in different areas during one quarter.
For an example, you can turn to the VisaÂ® Platinum Rewards Credit Card from Nusenda Credit Union for 5% on gas and school expenses in Q3. Then pull out the Discover itÂ® Cash BackÂ forÂ dining out for another 5% the same quarter.
The fine print: Once again, youâ€™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.
on US Bankâ€™s secure website
The U.S. Bank Cash+â„˘ Visa SignatureÂ® Card has a revolving cash back program thatâ€™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:
The categories for 5% cash back up to $2,000 (choose two each quarter) are:
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: The same opt-in revolving category applies here, except you must also remember to choose your categories. There is no annual fee. The U.S. Bank Cash+â„˘ Visa SignatureÂ® Card 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+â„˘ Visa SignatureÂ® Card is worth considering.
How it works: The SimplyCashÂ® Plus Business Credit Card from American Express* gives 5% cash back on wireless telephone services purchased directly from U.S. service providers and U.S. office supply stores, 3% cash back on the category of your choice from a list of eight, 1% cash back on other purchases. 5% and 3% apply to the first $50,000 in purchases per calendar year, then 1% applies thereafter. The eight categories are:**
**Terms and conditions apply.
Earning cash back: You have to choose your 3% category within two months of signing. If you donâ€™t choose one, the default is gas stations. The combined annualÂ maximum spend 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. The SimplyCashÂ® Plus Business Credit Card from American Express card has No annual fee, so youâ€™ll earn cash back with a generous annual maximum of $50,000Â (see Rates & Fees).
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, youâ€™ll be locked into the same 3% category for another 12 months until you make a switch. There is no annual fee.
*The information related toÂ the SimplyCashÂ® Plus Business Credit Card from American Express has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.
The information related to Amazon Prime Rewards VisaÂ® Signature Card has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.
How it works: The Amazon Prime Rewards VisaÂ® Signature Card is open to Amazon Prime Members, so itâ€™s somewhat exclusive. Earn 5% back at Amazon.com and Whole Foods Market with eligible Prime membership, 2% back at restaurants, gas stations, and drugstores, and 1% back on all other purchases. Buying items on other merchant websites that have the Amazon Prime Rewards VisaÂ® Signature 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 youâ€™re not already an Amazon Prime Member, itâ€™s probably not worth signing up to become one just for the card unless you intend to spend big bucks on the site or at Whole Foods Market. You need to spend $2,380 per year at Amazon.com for the 5% cash back to cover the $119 annual membership fee.
The fine print: The fine print of what you can and canâ€™t buy to earn 5% is the only gotcha here. But, if you shop a lot at Whole Foods Market or on Amazon.com often and stick to the rules, youâ€™ll see a nice return from this card.Â Thereâ€™s no annual fee for the card, but you must be an Amazon Prime member, which costs $119 a year ($59 for students).
How it works: For Target shoppers, thereâ€™s the Target REDcardâ„˘ Credit Card. It gives you a discount of 5% at Target & Target.com (minus any other discounts or promotions). Purchases that wonâ€™t earn 5% cash back include:
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.
How it works: TheÂ Fort Knox Federal Credit Union VisaÂ® Platinum Card 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. Youâ€™ll have to take a few extra steps to qualify for membership. If you donâ€™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.
How it works: The Blue Cash PreferredÂ® Card from American Express is our top pick for cardholders who want to maximize cash back on groceries. With this card, you getÂ 6% cash back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%). 3% cash back at U.S. gas stations, 1% cash back on other purchases.
Welcome offer: $200 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months.
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 ofÂ $95 per year.
on USAA Bankâ€™s secure website
How it works: USAAÂ® Cashback Rewards Plus American ExpressÂ® Card lets youÂ Earn 5% cash back on your first $3,000 in gas and military base purchases annually on these categories combined. Earn 2% on your first $3,000 on supermarket purchases per year. Unlimited 1% cash back on all other purchases. USAA membership is available to active and former military and their eligible family members.
Earning cash back:Â You Earn 5% cash back on your first $3,000 in gas and military base purchases annually on these categories combined. Earn 2% on your first $3,000 on supermarket purchases per year. Unlimited 1% cash back on all other purchases. You can redeem cash back in increments of $1 through the USAA Rewards Service Center online or over the phone.
The fine print: The USAAÂ® Cashback Rewards Plus American ExpressÂ® Card is light on the fine print. Just remember, the 5% category yearly maximum is $3,000 for combined gas and military base purchases per year and not per quarter. There is no annual fee.
In closing, regardless of which cash back card you choose, be sure to pay off your bill in full each month. Thatâ€™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 youâ€™re making in cash back.