Key takeaways

  • Rotating bonus categories allow cardholders to earn heightened cash back on a variety of spending, and these categories typically change on a quarterly or monthly basis.
  • The best rotating bonus category cards offer up to 5 percent cash back on your purchases and feature bonus category calendars that cardholders can view to get a sense of what the next quarter’s categories may be.
  • You can further maximize your rewards by pairing a rotating bonus category card with a flat-rate rewards card that offers 1.5 or 2 percent cash back on all other purchases.

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 of previous years memorized.

Others avoid rotating bonus category credit cards out of concern that they won’t be able to keep track of all of the categories. If that’s you, we’re going to help you understand how rotating bonus category cards work and how you can use them to maximize your cash back rewards.

Many people use their cash back rewards to pay down their balances, but you can also turn your cash rewards into gift cards, redeem them for online purchases and more.

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 bonus categories?

Cash back is a type of credit card reward that gives you a percentage of cash back on your purchases. Some cash back cards offer flat-rate cash back while others offer rotating bonus categories, meaning higher cash back rates in specific categories that change each quarter.

So, rotating bonus category credit cards are also precisely what they sound like — credit cards that offer bonus cash back rewards on different shopping categories and regularly rotate those categories on a quarterly or monthly basis.

Several cash back credit cards offer rotating bonus category rewards, giving cardholders the opportunity to earn high amounts of cash back on many different kinds of purchases. For example, according to the Discover Cash Back calendar for 2023, cardholders can earn 5 percent cash back (on up to $1,500 in combined spending per quarter after activation, then 1 percent) on purchases made at Amazon.com and Target during the fourth quarter of 2023.

Benefits of rotating bonus category credit cards

Rotating bonus category credit cards offer a lot of benefits. Cardholders can earn higher cash back percentages on popular spending categories, such as grocery stores, gas stations and restaurants.

Categories are often tied to seasonal spending habits. So, during the holiday season, for example, expect your rotating bonus categories to include popular retailers like Amazon.com, Target or Walmart. The best rotating bonus category credit cards also offer valuable sign-up bonuses that allow new cardholders to earn even more cash back.

Drawbacks of rotating bonus category cards

The biggest drawback of rotating bonus category cards? Since they regularly change the shopping categories that earn the highest cash back percentage, you might end up stuck with a bonus category you don’t spend that much money on.

Plus, rotating bonus category cards often require cardholders to activate their new bonus categories before they can start earning cash back. This means if you forget to activate your bonus categories, you could miss out on some cash back earnings.

The most popular rotating cash back category cards are the Discover it® Cash Back and Chase Freedom Flex℠*. These two cards are very similar in many ways, but they have a few key differences.

How they’re similar:

  • Bonus category rate. Both the Discover it® Cash Back and Chase Freedom Flex allow you to earn 5 percent cash back on categories that rotate every quarter (activation required) for up to $1,500 in combined category spending per quarter (then 1 percent back).
  • Activation required. Both cards require you to activate your bonus categories before you can start to earn heightened cash back, but the way Chase and Discover approach bonus category activation is slightly different.
  • Category announcements. Discover and Chase both announce their categories one quarter at a time (though, in the past, Discover announced the entire year upfront).

How they’re different:

  • Non-bonus category spending. The Discover it® Cash Back offers 1 percent cash back on all other purchases, but the Chase Freedom Flex also offers 5 percent back on travel purchased through Chase Ultimate Rewards, 5 percent cash back on Lyft rides through March 2025, 3 percent cash back on dining and drugstore purchases and 1 percent cash back on all other purchases.
  • Retroactive rewards. With Discover, you have to 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 is applied retroactively to all qualifying bonus category purchases made during that quarter.

Discover it® Cash Back 2023 bonus categories

The 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.

Here are the Discover it® Cash Back categories for 2023:

  • January through March: Grocery stores, drug stores and select streaming services
  • April through June: Restaurants and wholesale clubs
  • July through September: Gas stations and digital wallets
  • October through December: Amazon.com and Target

Chase Freedom Flex 2023 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.

So far, here are the Chase Freedom Flex bonus categories for 2023:

  • January through March: Target, grocery stores (excluding Walmart) and fitness club and gym memberships
  • April through June: Lowes (in-store and online) and Amazon
  • July through September: Gas stations, electric vehicle charging and select live entertainment
  • October through December: Wholesale clubs, select charities and PayPal

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 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. There are a variety of 1.5 percent and 2 percent cash back cards that can earn you heightened cash rewards on your everyday purchases, such as the Chase Freedom Unlimited®*, which earns 1.5 percent cash back on all purchases, and the Wells Fargo Active Cash® Card, which earns 2 percent cash rewards on all purchases.

Pair with a card that matches your spending habits

If you’re the kind of person who spends a lot of money on retailers like Amazon, Walmart and Target, for example, 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 with no annual fee. That way, any rewards you earn won’t be undermined by a yearly charge for card membership. Luckily, many 1.5 and 2 percent cash back cards are highlighted 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 with rotating bonus categories. To maximize the cash back you can earn, pair your rotating bonus category card with a second cash back card that offers high rewards on your most frequent purchases or a flat rate on all purchases.

*The information about the Chase Freedom Flex℠ and Chase Freedom Unlimited® has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.