Which 5% Cash Back Credit Cards Are The Best, On Average?

In the world of credit cards and Reddit, the 5% rotating category credit card is a cash-back darling. If you can add it to your wallet, taking advantage of 5% earnings on various categories like grocery stores, gas stations, online shopping, and more can help you boost your annual reward total. 

One Redditor is getting directly to the point in r/CreditCards with a post asking which is the best 5% cash-back credit card you can get today. While they have heard of the usual suspects like Citi, Chase, and Discover, they wonder whether or not any other options exist. 

There are plenty of cases where the 5% card can be a great addition to your credit card toolbox, but you must use it correctly to maximize your rewards. 

What Is 5% Cashback? 

Best known as the rotating category credit card, any cashback credit card that earns 5% is a general-purpose card that traditionally offers a 1% cashback reward on all other purchases. However, for each of the four quarters of a year or three months at a time, these rotating category cards will offer an increased percentage of 5% that you can earn if you shop at the predetermined bonus category. 

Generally speaking, these categories range from restaurants and dining to gas stations, home improvement stores, Amazon, Walmart, and select streaming services. In some cases, there are limits to these earnings, as Chase and Discover show. Both of these allow 5% cash back on up to $1,500 spent in activated rotating bonus quarters, and then you drop to the traditional 1% cashback earning. 

However, some cards, like the Citi Custom Cash card, only offer up to $500, while the US Bank Cash+ Visa Signature Card increases the limit up to $2,000 in spending before dropping to 1%. 

Making a Choice

Deciding which 5% cash back credit card is the best can be challenging, but if you have to choose just one, the US Bank Cash+ Visa Signature card is the way to go. This card is attractive because you can earn 5% cash back on your first $2,000 in combined eligible purchases in each quarter and add a 2% cash back everyday category choice each quarter.

If gas stations or grocery stores aren’t eligible for 5%, you can still get 2% cash back with these categories. This means that every other purchase would be 1% cash back, but considering that neither Discover nor Chase offer a third option between 5% and 1%, the US Bank card becomes even more attractive. 

In the case of the Discover It card, yes, you are getting rotating categories and Discover’s best-in-class customer service, but beyond that, it doesn’t stand out in the way the US Bank card does. The only significant benefit is that Discover will match all of the cashback you earn in the first year and double it. If you earn $100 in cashback rewards in the first 12 months, Discover will give you another $100, but only in the first year of card use. 

In the case of the Chase Freedom Flex card, you get 5% cash-back in quarterly bonuses, but 3% on dining at restaurants, which includes takeout and delivery. In addition, you get 3% on drugstore purchases, and while this percentage might be slightly higher than US Bank, the extra $500 US Bank allows you to spend each quarter matters more. 

The Final Answer

Ultimately, 5% credit cards are attractive for most people, especially if you do a lot of shopping in the rotating category area. However, the best choice for most people is a flat-rate cash back card that offers 2% on all purchases, so you don’t have to worry every time you reach into your wallet about which card is 5% at which retailer. If you’re wondering which 2% card is the best, you can see our top picks here: https://247wallst.com/go/qs/cc/cashback

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