Identifying the Top-Performing 5% Cash Back Credit Cards Overall
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them. When people think about the best cash-back credit cards, the 5% cash-back option is often at the forefront of their minds. While not the most common card type, this is undoubtedly one of the […] The post Identifying the Top-Performing 5% Cash Back Credit Cards Overall appeared first on 24/7 Wall St..
When people think about the best cash-back credit cards, the 5% cash-back option is often at the forefront of their minds. While not the most common card type, this is undoubtedly one of the best benefit levels you can find in the space today.
The 5% cash-back credit card is one of the most popular options available today.
There are several cards in this space, each offering different benefits and rewards.
One card rises above the rest with better category selections.
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Key Points
Knowing that the benefit level of this card is that good, one Redditor is trying to uncover the very best 5% cash-back credit card. Posting in r/CreditCards, they are looking at some of the different ones from Chase, Discover, US Bank, and others, trying to discover which one is the “best.”
The Options
The good news is that this Redditor is already looking at a list of the best and most popular options in this space. You have the Chase Freedom Flex, arguably the best-known 5% card option. The Discover it card is another well-known name, and generally speaking, most people choose between these two.
However, depending on where you bank, you might be familiar with the US Bank Cash+ card. The good news about this card is that it’s not necessarily category limited, unlike the Chase and Discover options. Instead, it’s 5% cash back on your first $2,000 in combined eligible purchases each quarter based on two categories of your choosing.
In other words, unlike Chase and Discover, which dictate quarterly categories, US Bank allows you to choose. This is a pretty significant advantage and undoubtedly means you can earn more rewards. As a cardholder of the Discover it card, I can say that not every quarter’s categories will appeal to me, so I skip the 5% cash back altogether. This wouldn’t happen with the US Bank Card, since I’m choosing categories I know I’ll spend money in.
The Redditor also mentions the Citi Custom Cash card, which is a middle ground between US Bank and other options. This card offers 5% cash back on a single category of your choice, but only up to $500 monthly. Every other purchase earns just 1% cash back, which is similar to the cash back rewards offered by other cards.
The Best 5% Choice
The US Bank Cash+ card is arguably the best option for this Redditor and anyone in a similar position seeking 5% cash back rewards. With two categories qualifying for 5%, and another single category qualifying for 2%, there is little question that you have far more flexibility with this card than any other option in the 5% space.
While the 1% cash back on all other earnings is a disappointment, it aligns with the other cards in this space. This means you aren’t losing much, if anything, if you opt for the US Bank Cash+ route. Plus, you don’t have any annual fee, flexible redemption options, and a large number of categories to choose from for your additional bonus benefits.
Flat-Rate Cards
Even with the US Bank Cash+ card being a great option for many people, there is a strong alternative. In many instances, some people just don’t want to be bothered by bonus categories. You need to remember to select the categories every quarter or month, and then ensure you’re using the correct card each time.
Instead, options like the Wells Fargo Active Cash or Fidelity card, which offer a flat rate of 2% cash back, might be a great alternative. This means you earn 2% cash back on every purchase, with no limits. You get the same number of benefits rewards-wise, but also additional perks like extended warranty, purchase protection, auto rental coverage, trip cancellation, and so many more.
While a 5% card can be really good, the best card on average might be one of these flat-rate cash back options. Best of all, these cards don’t have any special fees, restrictions, or caps, it’s just shop and earn every time. If you want to learn more about the best flat-rate cards, you can see our top picks here: https://247wallst.com/go/qs/cc/cashback.
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