Best rotating category cards

All cash back credit cards are not created equal. Flat-rate cash back credit cards don’t offer exciting earning rates, but they’re easy to use. You get rewarded for every transaction, which makes such cards a good choice for cardholders who seek simplicity in their credit card strategy.

Bonus category credit cards, on the other hand, offer higher rates on certain types of transactions, such as groceries, gas or travel. The rest of your purchases usually earn 1 percent back.

Then there are rotating category credit cards—cards that earn generous rewards (typically 5 percent cash back) in categories that rotate every quarter and generally require activation. This kind of credit card can be an excellent choice for consumers who are ready to take their credit card strategy further to maximize rewards.

Is a rotating category credit card a good fit for you? And if so, which one should you choose? Read on to learn more about the rotating category cards available on the market today.

Rotating category credit cards:

• Discover it® Cash Back: Best for planning your yearly rewards strategy
• Chase Freedom Flex℠: Best for Ultimate Rewards stockpiling
• U.S. Bank Cash+™ Visa Signature® Card: Best for choosing your own rewards
• ABOC Platinum Rewards Mastercard® Credit Card: Best for no quarterly activation required

Discover it Cash Back

Discover it® Cash Back is a classic rotating category credit card. It earns 5 percent cash back in quarterly rotating categories (up to $1,500 in purchases each quarter) after activation, and 1 percent on all other purchases. Additionally, as an intro offer, Discover matches all cash back you earn in the first year.

The issuer typically announces the categories for a year ahead, and many of them tend to repeat from year to year.

For example, here are the categories for 2020 and 2021:

As you can see, the card offers some lucrative categories, such as groceries, restaurants and major retailers, including Amazon.com, Target.com and Walmart.com, making it a great credit card for the holiday season and beyond.

Other Discover cards with a similar rewards structure include the Discover it® Student Cash Back and the NHL® Discover it®.

Chase Freedom Flex

The Chase Freedom Flex℠ is another widely popular rotating category credit card. Similar to the Discover it Cash Back, it earns 5 percent cash back in quarterly bonus categories on up to $1,500 in purchases each quarter after activation.

Chase Freedom Flex bonus categories

We don’t know yet what the categories will be in 2021—the issuer only releases them one quarter at a time.

Besides that, the card offers:

• 5 percent back on travel booked through Chase Ultimate Rewards
• 5 percent back on qualifying Lyft services purchased through the Lyft app (through March 2022)
• 3 percent back on dining, including takeout and delivery services
• 3 percent back on drugstore purchases
• 1 percent on all other purchases

These additional bonus categories provide substantial value and more opportunities for a cardholder to maximize cash back earnings.

What makes this product stand out even further is that the cash back comes in the form of Chase Ultimate Rewards points—one of the most valuable rewards currencies on the credit card market. Note, however, that you’re going to need either Chase Sapphire Preferred® Card or Chase Sapphire Reserve® to transfer your points to travel partners and get the most out of their value.

U.S. Bank Cash+ Visa Signature Card

Another credit card that rotates bonus categories is the U.S. Bank Cash+™ Visa Signature® Card.

Its structure is different from that of the Discover it Cash Back or the Flex: With this card, you can choose two 5 percent categories per quarter from a list of 12, with a combined quarterly spending capped at $2,000, and pick one 2 percent category from a list of three “everyday” choices (restaurants, grocery stores and gas stations) without a spending limit. All other purchases earn 1 percent cash back.

Here are the 12 categories you can choose from to earn 5 percent cash back:

• TV, Internet and streaming services
• Fast food
• Cellphone providers
• Department stores
• Home utilities
• Select clothing stores
• Electronics stores
• Sporting goods stores
• Movie theaters
• Gym/fitness centers
• Furniture stores
• Ground transportation

While this structure offers a lot of flexibility other options don’t provide, it’s also quite labor-intensive. To maximize this card’s value, you’ll need to review your spending patterns to determine in which categories you can earn the most cash back.

The way U.S. Bank categorizes transactions is also rather complex. For instance, there’s a 5 percent fast food category, but restaurants is also a 2 percent category.

However, if you’re ready to put in some thought into your card usage, the U.S. Bank Cash+ Visa Signature can be highly rewarding, as you can adjust categories according to your spending plans.

ABOC Platinum Rewards Mastercard® Credit Card

The ABOC Platinum Rewards Mastercard® Credit Card earns 5X points on up to $1,500 in combined purchases each quarter in bonus categories and 1X point on everything else. What sets this card apart is that you don’t need to activate its bonus categories quarterly —you’ll be automatically enrolled each quarter.

ABOC Platinum Rewards bonus categories

While these categories can be lucrative, the redemption options offer a rather poor value. You can redeem points for travel, gift cards, merchandise or statement credit, with travel being your best option at 1 cent per point. Redeeming for statement credit, on the other hand, will only get you 0.75 cent per point in value. For that reason, if you’re looking for a rotating category card to earn cash back, the ABOC Platinum Rewards might not be the best choice.

Should you get a rotating category credit card?

Rotating category credit cards can be an excellent option for cardholders who don’t mind putting some work into their credit card strategy. These cards offer a unique opportunity to earn high-rate rewards in various categories throughout the year, which can translate into significant earnings if you work to maximize the card’s potential.

However, if you’d rather avoid complex earning structures, a different rewards card might be a better pick. If you want to earn rewards at a better rate than a flat-rate cash back card, it can be a good idea to look into classic bonus category credit cards.

For instance, the Blue Cash Preferred® Card from American Express offers 6 percent cash back at U.S. supermarkets (up to $6,000 in purchases per year, then 1 percent) and on select U.S. streaming subscriptions, 3 percent cash back at U.S. gas stations and on transit and 1 percent cash back on everything else. Or, if you prefer dining out, you might want to consider the Capital One Savor Cash Rewards Credit Card, which earns unlimited 4 percent cash back on dining and entertainment purchases, 2 percent cash back at grocery stores and 1 percent cash back on all other purchases.

There are many credit cards with an amazing earning potential, but it always comes down to what’s best for your unique spending and card usage habits.