Key takeaways

  • Rotating bonus categories allow cardholders to earn heightened cash back on a variety of spending, and these categories typically change quarterly or monthly.
  • The best rotating categories credit cards offer up to 5 percent cash back on your purchases, along with other rewards, perks and features.
  • You can further maximize your rewards by pairing a rotating bonus category card with a flat-rate rewards card that offers 1.5 percent or 2 percent cash back on all purchases outside the bonus categories."colors_variant="blue

Some people love rotating bonus category credit cards. They activate their bonus shopping categories as soon as they get the chance and have the rotating bonus categories from previous years memorized.

Others choose cash back cards without rotating bonus categories out of concern they won’t be able to keep track of all of the categories, remember to activate their rewards or otherwise fully capitalize on the rewards opportunities available to them. But it’s time to demystify these potentially lucrative cards so you can put them to work in your own rewards strategy.

Rewards earned through rotating categories cards can help you pay down your credit card balance as statement credit, purchase gift cards or other merchandise — or even fit seamlessly into a travel rewards strategy.

Let’s take a closer look at the pros and cons of rotating bonus category cards, the most popular rotating cash back category cards available and how you can maximize your cash back strategy with these cards.

What are rotating category credit cards?

Rotating bonus category credit cards offer bonus cash back rewards on different shopping categories that regularly rotate on a quarterly or monthly basis.

The most common rotating category cards are cash back cards, which offer rewards as a percentage of cash back on your purchases. In addition to rotating category cash-back cards, other cash back structures include flat-rate cash back or tiered-rate cards.

Several cash back credit cards offer rotating bonus category rewards, and most of those feature quarterly categories chosen by the issuer and announced a few weeks before the start of the next quarter. A few cards, however, give cardholders the opportunity to choose the categories in which they want to earn top rewards. These are a subset of rotating categories cards we’ll call “cardholder choice” cards.

Benefits of rotating bonus category credit cards

Rotating bonus category credit cards offer a lot of benefits that boosted rewards on your everyday spending and welcome bonuses to start you on the right foot.

  • Higher cash back in popular categories. Cardholders can earn higher cash back in such categories as grocery stores, gas stations, restaurants or even online spending, helping you to earn more on what you’re already buying.
  • Categories for seasonal spending. During the holiday season, for example, expect your rotating bonus categories to include popular retailers like Amazon, Target or Walmart. During the summer travel season, you may see gas or restaurants as your categories.
  • Lucrative welcome bonuses. The best rotating bonus category credit cards also offer valuable welcome bonuses that allow new cardholders to rack up quick rewards.

Drawbacks of rotating bonus category cards

The biggest drawback of rotating bonus category cards is that they require attention and hands-on management. These aren’t designed for the cardholder who wants to use the same credit card for every purchase and never think about it.

  • You must activate your bonus categories. If you forget to activate your bonus categories, you won’t start earning cash back at the higher rate and you’ll miss out on significant earnings. Even if you do remember to activate, it’s possible the quarter’s categories won’t align with your spending needs, and you could struggle to maximize rewards in that quarter.
  • You’ll need to align spending with your bonus categories. Cardholder choice cards allow you more control over where you’ll earn top rewards, but you must also time your spending for maximum rewards. Let’s say you need to make an emergency purchase of a new washer and dryer at a local home improvement store, so you decide to set your cardholder choice card to “home improvement” as the category. But life happens, and you delay your purchase. Instead of earning top rewards on that major purchase, you might earn just 1 percent cash back.
  • You must mind spending caps. Rotating category cards usually set a cap on the amount you can spend in the category — often $1,500 or $2,500 per quarter — to earn the top rewards. It’s still wonderful to earn top rewards on spending up to that cap, but once you hit it, you should have a back-up card to use that earns at least 1.5 percent back on those purchases. Otherwise, you’ll likely earn just 1 percent on the rest of that spending.

Perhaps the best-known rotating cash back category cards are Discover it® Cash Back and Chase Freedom Flex℠*.

How they’re similar

  • Bonus category rate. Both Discover it Cash Back and Chase Freedom Flex allow you to earn 5 percent cash back on up to $1,500 spent in categories that rotate quarterly, with activation required. After hitting the cap, you earn 1 percent back on those purchases.
  • Activation required. Both cards require you to activate your bonus categories to earn the bonus cash back. In both cases, activation is simple through your online account or app.
  • Category announcements. Discover and Chase both announce their categories one quarter at a time, usually about three weeks to a month before the start of the next quarter.

How they’re different

  • Non-bonus category spending. Discover it Cash Back offers 1 percent cash back on purchases outside of the quarterly bonus categories. Chase Freedom Flex offers 5 percent back on travel purchased through Chase Travel℠ , 5 percent cash back on Lyft rides through March 2025, 3 percent back on dining and drugstore purchases and 1 percent back on all other purchases.
  • Cash back vs. points. Chase Freedom Flex officially awards cash back in the form of Chase Ultimate Rewards points, a powerful travel rewards currency. You can redeem those points for straight cash back, but you can also combine them with rewards earned through other Ultimate Rewards–earning cards. In fact, when combined with a premium product such as the Chase Sapphire Preferred® Card, rewards earned with Freedom Flex can be worth even more. Discover it, on the other hand, offers rewards cardholders can redeem for straight cash back or other “cash like” redemptions such as statement credit, to purchase gift cards, to make charitable donations or to pay for purchases at
  • Retroactive rewards. With Discover, you must activate your bonus categories before you can start earning bonus cash back. If you don’t activate your July-to-September bonus categories until August, for example, you won’t be able to earn the increased cash back rate on any bonus category purchases made in July. Instead, you’ll earn only 1 percent cash back on those purchases. Chase lets you activate your bonus category rewards throughout the quarter (though there is an activation deadline on the 14th of the last month in the quarter). After activation, your bonus cash back rate applies retroactively to all qualifying bonus category purchases made during that quarter.

Discover it Cash Back bonus categories

Discover it Cash Back has often offered bonus category rewards on groceries, gas, online shopping and more. Remember, you need to activate your Discover card categories before you can start earning the heightened cash back rate, so don’t procrastinate.

Keep an eye on your email or log in to your Discover online account so you know when it’s time to activate your quarterly bonus categories.

Discover it Cash Back categories for 2024

  • January through March: Drugstores and restaurants
  • April through June: Gas stations and electric vehicle charging stations; home improvement stores; and public transit (Q2 in 2023: Restaurants and wholesale clubs)
  • July through September: TBD (Q3 in 2023: Gas stations and digital wallets)
  • October through December: TBD (Q4 in 2023: and Target)

Chase Freedom Flex bonus categories

Like Discover, Chase regularly offers bonus category rewards on categories like online shopping, gas stations and groceries. Watch your email, check your Chase online account or keep an eye on Bankrate’s Chase Freedom Flex bonus category guide to learn what kind of quarterly bonus categories to expect each year — and don’t forget to activate your rewards.

Chase Freedom Flex bonus categories for 2024

  • January through March: Grocery stores (excluding Walmart and Target), fitness club and gym memberships and spa services/self-care
  • April through June: Hotels, restaurants and (Q2 in 2023: Lowes (in-store and online) and Amazon)
  • July through September: TBD (Q3 in 2023: Gas stations, electric vehicle charging and select live entertainment)
  • October through December: TBD (Q4 in 2023: Wholesale clubs, select charities and PayPal)

Most popular cardholder choice rewards cards

Cardholder choice cards are hybrids in the rotating categories card world. These categories do “rotate,” but the cardholder has the flexibility to choose what those categories are.

The Bank of America® Customized Cash Rewards credit card and U.S. Bank Cash+® Visa Signature® Card* rise to the top as popular cardholder choice cards. That said, they differ significantly in their structures.

Bank of America Customized Cash Rewards details

The Customized Cash Rewards card offers cardholders a tiered rewards structure

  • 3 percent cash back in a category of the cardholder’s choice from among categories like gas and electric vehicle charging stations, online shopping (also including cable, streaming, internet and phone services), dining, travel, drugstore or home improvement
  • 2 percent back on purchases at grocery stores and wholesale clubs (3 percent and 2 percent earning is on the first $2,500 in combined spending each quarter, then 1 percent)
  • 1 percent back on other purchases

Cardholders can change their 3 percent category once each calendar month, so you can plan ahead to ensure you earn the most rewards. Your current choice remains in effect until you elect to change it.

Finally, Bank of America Preferred Rewards clients can earn even more — 25 percent to 75 percent more rewards on each transaction, depending on your tier.

<br></br>Information about the Bank of America® Customized Cash Rewards credit card was last updated on Jan. 9, 2024.<br></br>

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

The Cash+ card takes the cardholder choice model to an even more hands-on structure:

  • 5 percent cash back on up to $2,000 spent in two categories of your choice from fast food; home utilities; TV, internet and streaming; department stores; cell phone; electronic stores; gyms/fitness centers; sporting goods stores; ground transportation; movie theaters; furniture stores; and select clothing stores
  • Unlimited 2 percent back on one everyday category of the cardholder’s choice from gas stations and EV charging stations, grocery stores and grocery delivery, and restaurants
  • 1 percent on other purchases

This card requires even more organization and management by the cardholder, but the tradeoff is an excellent opportunity to structure your rewards earning potential to align with your monthly budget and spending.<br></br>

You can change your categories once each quarter, but you must remember to select something. If you don’t choose your categories, you only earn 1 percent on those purchases.

Additional ways to maximize cash back with rotating bonus category cards

Rotating bonus category credit cards are a great way to earn high percentages of cash back on certain types of purchases — but what about on everything else you buy?

Here are a few ways to maximize your cash back earnings with rotating bonus category cards.

Pair with a flat-rate cash back card

If you want to earn as many cash back rewards as possible, try pairing a rotating bonus category card with a flat-rate cash back card. That way, you can use your bonus category card every time you make a purchase that falls within its quarterly bonus categories, and your flat-rate cash back card for every purchase that doesn’t qualify for bonus category rewards. A variety of 1.5 percent and 2 percent cash back cards can earn you heightened cash rewards on your everyday purchases, such as the Chase Freedom Unlimited®, which earns at least 1.5 percent cash back on all purchases, and the Wells Fargo Active Cash® Card, which earns 2 percent cash rewards on purchases.

Remember also that your card may pair well with another card from the same bank or rewards family, as is the case with Freedom Flex and Freedom Unlimited. Both cash back cards earn rewards as Chase Ultimate Rewards points, and you can pool those points to see your rewards cache grow more quickly.

Pair with a card that matches your spending habits

If you’re the kind of person who spends a lot of money at retailers like Amazon, Walmart and Target, why not pair your rotating bonus category card with a credit card that rewards online shopping? That way, you can earn high-level cash back rewards on your Amazon or online Target purchases throughout the year.

Depending on your shopping habits, you might also want to pair a rotating bonus category card with a credit card that rewards grocery shopping or a credit card that rewards restaurant spending. Either way, you’ll be able to earn more cash back on the purchases you make most often.

Seek out cards with no annual fee

When deciding on the best card to pair with your rotating bonus category card, it may be best to stick to options that don’t charge an annual fee. That way, any rewards you earn aren’t undermined by a yearly charge for card membership. Luckily, we highlight many 1.5 and 2 percent cash back cards on our list of the best credit cards with no annual fee.

The bottom line

Cash back is an opportunity to earn a little extra money on everyday purchases. Some of the best cash back credit cards offer the same amount of cash back on every purchase or different cash back percentages depending on the type of purchase. But a few of the best cards reserve their highest rewards rates for rotating bonus categories.

If your shopping habits are flexible enough to cover many different spending categories, you might want to consider a cash back credit card that rotates bonus categories. To maximize the rewards you can earn, pair your rotating bonus category card with a second rewards card that offers high return on your most frequent purchases or a flat rate on all purchases.

*Information about Chase Freedom Flex℠ and the U.S. Bank Cash+® Visa Signature® Card has been collected independently by Bankrate and have not been reviewed or approved by the card issuer.