Which credit card gives you 5 cash back?
Which credit card gives you 5 cash back?
Which Credit Card Gives You 5% Cash Back?
When it comes to maximizing your rewards with credit cards, earning 5% cash back on your purchases is one of the most appealing benefits. But with so many options available, it can be overwhelming to decide which credit card offers the best 5% cash back rewards and how to take full advantage of these benefits.
In this article, we will explore a variety of credit cards that offer 5% cash back, the categories where you can earn this rate, and some important tips and strategies to optimize your rewards. Whether youāre a savvy shopper or someone looking to get more value from everyday spending, this guide will help you make an informed decision.
Understanding 5% Cash Back Credit Cards
Before diving into specific cards, itās important to understand what 5% cash back actually means and how these rewards typically work.
- 5% cash back means you get 5% of your spending back as rewards. For example, if you spend $100 in a qualifying category, you earn $5 in cash back.
- This rate often applies only to specific spending categories, which may rotate quarterly (like grocery stores, gas stations, or select retailers).
- Many cards cap the amount of 5% cash back you can earn within these categories per quarter or per year.
- Outside these categories or spending limits, the cash back rate often drops to 1% or 1.5%.
With this knowledge, let’s explore some of the top credit cards that offer 5% cash back and how they work.
Best Credit Cards Offering 5% Cash Back
1. Chase Freedom Flexā
The Chase Freedom Flexā card is one of the most popular options for earning 5% cash back. It offers rotating quarterly categories that earn you 5% cash back on up to $1,500 in combined purchases each quarter.
- 5% cash back on rotating categories such as grocery stores, gas stations, restaurants, and more (activation required each quarter).
- 5% cash back on travel purchased through Chase Ultimate RewardsĀ®.
- 3% cash back on dining and drugstores.
- 1% cash back on all other purchases.
This card is ideal if you donāt mind activating categories quarterly and can track your spending to maximize the 5% rewards.
2. Discover itĀ® Cash Back
The Discover itĀ® Cash Back card also offers 5% cash back on rotating categories that change every quarter. The categories are broad and often cover essentials like grocery stores, gas stations, restaurants, and Amazon.com.
- 5% cash back on up to $1,500 in purchases each quarter in selected categories.
- 1% cash back on all other purchases.
- Discover automatically matches all cash back you earn at the end of your first year as a cardholder.
This card rewards those who want simple cash back with a nice bonus during their first year, making it an excellent choice for new credit card users.
3. Blue Cash PreferredĀ® Card from American Express
The Blue Cash PreferredĀ® Card from American Express is designed for heavy grocery and gas shoppers, featuring a steady 6% cash back at U.S. supermarkets (on up to $6,000 per year in purchases) and 3% at U.S. gas stations. But it also features categories with 5% cash back:
- 6% cash back at U.S. supermarkets (up to $6,000 per year in purchases).
- 3% cash back at U.S. gas stations and on transit.
- 1% cash back on other purchases.
While 5% cash back is less common here, American Express often offers targeted promotions or monthly deals through Amex Offers where you can earn 5% cash back at selected merchants.
4. U.S. Bank Cash+Ā® Visa SignatureĀ® Card
The U.S. Bank Cash+Ā® Visa SignatureĀ® Card is a flexible cash back card that allows you to choose two categories each quarter to earn 5% cash back on your first $2,000 in combined purchases.
- 5% cash back on two categories of your choice each quarter (e.g., grocery stores, restaurants, gas stations, cell phone providers, etc.).
- 2% cash back on one additional category.
- 1% cash back on all other purchases.
This card is excellent for people who want to customize and maximize rewards where they spend the most.
5. Citi Custom Cashā Card
The Citi Custom Cashā Card is relatively new but offers a simple way to get 5% cash back on your highest eligible spend each billing cycle, up to $500 spend.
- 5% cash back on your top eligible spend category each billing cycle, up to $500 spent
- Eligible categories include restaurants, gas stations, grocery stores, select streaming services, and more.
- 1% cash back on all other purchases.
This card is great for people who want automatic rewards without tracking rotating categories or activating offers.
How to Maximize Your 5% Cash Back Rewards
Simply having a 5% cash back card isnāt enough to maximize your earnings. Here are some strategies to help you get the most value:
- Activate categories when required. Cards like Chase Freedom Flexā and Discover itĀ® require quarterly activation. Setting calendar reminders helps you never miss out.
- Track rotating categories. Pay attention to which categories are eligible each quarter and plan your spending accordingly.
- Use multiple cards. Having one card for rotating 5% categories and another for a steady rate on groceries or gas can increase your overall cash back.
- Meet spending limits smartly. Most cards cap the 5% cash back on a quarterly or yearly basis for the bonus categories. Make sure to maximize right up to these limits.
- Combine with store loyalty programs or coupons. Using your cashback card with other savings strategies can multiply your gains.
- Redeem rewards wisely. Some cards offer bonus redemption values when you use points for travel or statement credits. Know your cardās redemption policies.
Common User Questions About 5% Cash Back Credit Cards
Do all 5% cash back cards require category activation?
Most cards with rotating categories, such as the Chase Freedom Flexā and Discover itĀ® Cash Back, require you to activate the categories each quarter. However, cards like the Citi Custom Cashā automatically apply the 5% to your top spending category without activation, making it more convenient if you prefer a hands-off rewards approach.
Is 5% cash back really worth it?
Absolutely! Earning 5% cash back is significantly higher than the typical 1-2% on many credit cards, effectively giving you a 5% discount on purchases in these categories. However, to truly benefit, you should only spend in these categories what you would have normally spent and avoid unnecessary purchases just to earn rewards.
Are there limits to how much 5% cash back I can earn?
Yes. Most 5% cash back categories come with a spending cap, usually around $1,500 per quarter or $6,000 per year depending on the card. After hitting that threshold, purchases earn the regular cash back rate (often 1%).
Can I earn 5% cash back on all my purchases?
Currently, no credit card offers a flat 5% cash back rate on every purchase without restrictions. Cards that offer 5% rewards typically limit this to specific categories or a certain amount of spending. For flat-rate cash back, most cards offer 1.5% to 2%, but not 5%.
Who Should Consider 5% Cash Back Credit Cards?
These cards are best suited for particular types of spending habits and preferences:
- Category spenders: If you consistently spend in categories like groceries, gas, restaurants, or travel, rotating category cards or cards with fixed 5% categories can offer big rewards.
- Organized spenders: Cards that require quarterly activation and category tracking work best if youāre someone who plans and follows through on bonus categories.
- New credit users or cautious spenders: Cards like Discover itĀ® that offer first-year cash back matches and no annual fees are great to start earning rewards.
- People seeking flexibility: Cards like U.S. Bank Cash+Ā® and Citi Custom Cashā offer customization or automatic rewards on your highest spend, ideal for flexibility.
Important Considerations Before Applying
Before choosing a card for 5% cash back, keep these key factors in mind:
- Annual fees: Some cards with generous 5% categories charge annual fees (like the Blue Cash PreferredĀ® Card). Factor this into your rewards calculations.
- Interest rates: Carrying a balance can quickly wipe out rewards benefits. Always aim to pay off your balance in full each month.
- Credit score requirements: Many of these cards require good to excellent credit, so check your creditworthiness beforehand.
- Expiration or program changes: Credit card rewards programs can change, so stay updated on your cardās terms and activation deadlines.
Summary: Which Credit Card Gives You 5% Cash Back?
To summarize, the best credit cards giving you 5% cash back include:
- Chase Freedom Flexā ā 5% on rotating categories quarterly, 5% on Chase travel.
- Discover itĀ® Cash Back ā 5% on rotating categories with first-year cashback match.
- Blue Cash PreferredĀ® Card from Amex ā 6% at supermarkets, occasional 5% via offers.
- U.S. Bank Cash+Ā® Visa SignatureĀ® ā 5% cash back on two customizable categories quarterly.
- Citi Custom Cashā Card ā 5% on your top spending category monthly (up to $500).
Choosing the right 5% cash back card depends on your spending habits, willingness to activate offers, and preference for simplicity or customization. With careful planning and smart usage, these rewards cards can save you hundreds of dollars per year on everyday purchases.
Related Articles
Our HOME in English: Smart Finance: Learn, Invest, and Grow
Our Categories:
- š³ Credit Cards: Comparisons, reviews, and tips to choose the best card for your profile ā cashback, travel rewards, no annual fee, and more.
- š¦ Digital Banks: Practical guides and evaluations of digital bank accounts, fees, benefits, and services.
- š Investments: Beginner guides, fixed income and variable income options, real estate investment trusts (REITs), and more.
- š§® Financial Education: Learn to manage your budget, build an emergency fund, and get out of debt.
- š Loans and Financing: Explanations about mortgage, auto, and student loans, with smart money-saving tips.
- š”ļø Insurance: Information about the most important types of insurance to protect your family and assets.
- š Taxes and Income: Guidance on tax filing, investment taxation, and fiscal responsibilities.
- šļø Retirement Planning: Tips to plan your retirement with private retirement plans, Social Security benefits, and passive income strategies.
Which Credit Card Gives You 5% Cash Back?
Looking for a credit card that offers 5% cash back can be a smart move to maximize your rewards on everyday spending. Many credit cards provide tiered or rotating categories where you can earn a higher cash back rate, often up to 5%, on purchases like groceries, gas, or dining. Choosing the right 5% cash back credit card depends on your spending habits and whether you prefer flat-rate rewards or bonus categories that change quarterly. Understanding the details behind these cards will help you save more and spend wisely.
Top Credit Cards Offering 5% Cash Back
- Chase Freedom Flexā : Earn 5% cash back on up to $1,500 in combined purchases in rotating categories each quarter when activated.
- Citi Custom Cashā Card: Automatically earn 5% cash back on your highest eligible spend category each billing cycle, up to $500 spent.
- Discover itĀ® Cash Back: 5% cash back on rotating quarterly categories, up to $1,500 in purchases per quarter, when activated.
- U.S. Bank Cash+ā¢ Visa SignatureĀ® Card: Pick two categories each quarter to earn 5% cash back on up to $2,000 in combined purchases.
How to Maximize 5% Cash Back Credit Cards
To get the most value from a 5% cash back card:
- Activate bonus categories: Some cards require activation every quarter.
- Track spending limits: Most cards cap the amount eligible for 5% cash back.
- Use combined category bonuses: Some cards allow pooling purchases from multiple categories.
- Avoid carrying a balance: Interest charges can outweigh rewards.
FAQ about 5% Cash Back Credit Cards
Which credit card offers 5% cash back with no annual fee?
The Chase Freedom Flexā and Discover itĀ® Cash Back cards offer 5% cash back on rotating categories with no annual fee.
Do all 5% cash back cards have rotating categories?
Most 5% cash back cards feature rotating quarterly categories, but some like the Citi Custom Cashā card automatically reward your top spend category each month.
What categories usually earn 5% cash back?
Common categories include grocery stores, gas stations, restaurants, drugstores, and select online retailers.
Are bonuses capped on 5% cash back cards?
Yes, many cards cap the 5% cash back reward on a spending limit, often $1,500 per quarter or $500 per month.
How do I activate the 5% cash back categories?
Cards with rotating categories typically require quarterly activation via the issuerās mobile app or website.
Is 5% cash back better than flat-rate cards?
If your spending aligns with bonus categories, 5% cash back can yield more rewards than a flat 1.5% or 2%, but only up to the category cap.
Can I combine 5% cash back cards?
Yes, pairing multiple cards with different bonus categories can help maximize rewards across various purchases.
Are there any restrictions on 5% cash back rewards?
Some cards exclude certain purchases like gift cards, balance transfers, or cash advances from the 5% cash back categories.
How do I redeem my 5% cash back?
Rewards typically can be redeemed as statement credits, direct deposit, gift cards, or merchandise through the card issuerās portal.
Do 5% cash back cards have foreign transaction fees?
Most 5% cash back cards are designed for domestic use and may charge foreign transaction fees; check the terms before using abroad.
Can my credit score affect approval for 5% cash back cards?
Yes, these cards usually require good to excellent credit scores for approval to access the best rewards.
Are 5% cash back cards a good option for beginners?
They can be beneficial if you can track categories and avoid interest charges, but starting with a simple flat-rate card might be easier.
What happens after reaching the spending cap for 5% cash back?
Purchases beyond the cap typically earn a lower cash back rate, such as 1% on most cards.
Is the 5% cash back rate guaranteed indefinitely?
Rotating category bonuses usually last per quarter, and card issuers may change categories or terms annually.
How does the Citi Custom Cashā card’s 5% cash back work?
It automatically awards 5% cash back on your highest eligible spending category each billing cycle, up to $500 spent.
Conclusion
Choosing a credit card that offers 5% cash back can significantly enhance your rewards, especially if you spend regularly in the right categories. Cards like the Chase Freedom Flexā , Discover itĀ® Cash Back, and Citi Custom Cashā provide flexible options to earn 5% on groceries, gas, dining, and more. While rotating categories require some management, many find the boost to their cash back earnings worth the effort. Remember, understanding the spending caps, activation requirements, and redemption processes is key to making the most of these rewards. With no annual fees on many top-rated 5% cash back cards and generous signup bonuses, this credit card type can be an excellent way to save money on everyday purchases for American consumers. Start by identifying which card matches your lifestyle and spending habits, then activate those bonuses and watch your rewards growāall while managing your credit responsibly to maintain financial health.
