Methodology: US News reviewed hundreds of credit cards to identify those offering 5% cash back based on factors including rewards rate, rotating bonus categories, bonus spending limits, sign-up bonuses, and annual fees.
Best Card Summary
Chase Sapphire Preferred® Card
Why it’s one of the best 5% cash back credit cards: Cheez Sapphire Preferred Card customers earn rewards for a variety of purchases, including five points per dollar (valid through March 2022) on Lyft rides. Other earning categories include two points per dollar on travel and food. There is an annual fee of $ 95, but after spending $ 4,000 in the first three months an attractive bonus can attract you – 60,000 bonus points.
Chase Freedom Flex Fre
Why it is one of the best 5% cash back credit cards: If you are looking for a reward card with 5% cash in active bonus categories every quarter, this is a good option. The card also gives 5% back on trips purchased through Chase, 3% at drugstores and restaurants, including takeout and delivery, and 1% year-round on other purchases.
Chase Freedom Unlimited®
Why this is one of the best 5% cash back credits: Cardholders can earn up to 5% cash in grocery store purchases of up to $ 12,000 (excluding First Target and Walmart) and 5% on purchases purchased through Chase back. Add 1.5% cash back rewards and a variety of bonus categories, and this card is a solid earning.
Chase Sapphire Reserve®
Why it’s one of the best 5% cash back credit cards: The Chase Sapphire Reserve is an elite travel card with a $ 550 annual fee. In addition to the VIP benefits, cardholders earn up to $ 10 per Lyft ride (valid through March 2022), three points per dollar on food, up to three points in monthly grocery store purchases made from November 1, 2020 to April 30 . 2021, and three points per dollar on the trip immediately after earning your $ 300 travel credit. You will get 50% extra value when redeeming for the trip and select other categories through the Chase Ultimate Rewards portal. The sign-on bonus offers 50,000 points after spending $ 4,000 in the first three months.
Platinum Card® from American Express
Why it’s one of the best 5% cash back credit cards: Elite travelers choose Platinum cards from American Express for their top-notch travel, as long as they can justify the $ 550 annual fee. During the first six months after account opening, by earning 10 points on eligible purchases made at US gas stations and US supermarkets, up to $ 15,000 in combined purchases. You will earn five points per dollar spent on flights booked with airlines or with American Express Travel (initially January 1, 2021, bonus points in these categories will be limited to the first $ 500,000 in combined purchases each year) . You will earn five dollars per dollar on prepaid hotels booked on amextravel.com and one point per dollar on all other purchases, while also availing a $ 200 airline fee credit per year.
City Prestige® Credit Card
Why it’s one of the best 5% cash back credit cards: With the Citi Prestige credit card, you’ll earn five points per dollar on airlines and dining, three points per dollar on hotels and cruise lines, and one point per dollar on other purchases. . There is a $ 495 annual fee, but you can refund just over half of the $ 250 annual credit for travel expenses.
Wells Fargo Visa Signature® Card
Why it’s one of the best 5% cash back credit cards: Five points per dollar on this card are short-lived, as it only applies to the $ 12,500 spent on gas, grocery and drugstores in the first six months. Later, and for all other purchases, you will earn one point per dollar. However, there is no annual fee and you will get some attractive visa signature benefits.
US Bank Cash + ™ Visa Signature® Card
Why it’s one of the best 5% cash back credit cards: US Bank Cash + Visa Signature Card allows cardholders to choose two categories each quarter to earn 5% cash back; You are limited to the first $ 2,000 spent in those categories. In addition, you will get 2% cash back on a daily category (eg gas station, grocery store or restaurant), and 1% on all other purchases.
How else can I give 5% cash back card?
With 5% cash back credit cards, you have the opportunity to earn cash back on qualifying purchases that exceed the typical 1% to 2% cash back. You can usually earn 5% cash on all purchases with rotating bonus categories, categories of your choice, dedicated year round categories or with a particular retailer. You are unlikely to get a 5% cash back card on purchases in all categories.
Are there 5% cash back card limits?
Five percent cash back is a great reward earned level. But it is not without limits.
“These cards almost always come with a catch,” says Chelsea Hudson, senior public relations officer and personal finance specialist website TopCashback.com. “Ranging from not giving 5% cash across the board to 5% of your expenses may qualify for rewards. Researching how much money to earn for every dollar you spend is the most important.”
Most cards with rotating cash back categories require you to activate bonus rewards every quarter. Otherwise, you will just come at a regular rate, usually 1% cash back. Activating is quite simple. You can do this when you log in to check your account or pay your bill.
More importantly, these cards may not offer unlimited earning on the 5% bonus categories. It is common to see a 5% cash limit of up to $ 1,500 each quarter in the bonus category. This is a limit of $ 300 in 5% bonus cash every year.
Although you are often limited by how much you can earn on a 5% cash back, most of these cards offer unlimited 1% cash in the bonus category or that exceed the quarterly bonus limit. Suppose you spend $ 3,000 a year on food. If it is spread evenly throughout the year and has a 5% cash back bonus in a quarter, you will earn $ 37.50 cash in the bonus quarter and $ 7.50 for each of the other three quarters. That is $ 60 cash annually on food.
Cards with quarterly limit on 5% cash back purchases may not be a good option for a card you use for year round purchases. Other cards may offer higher flat rates at cash back of up to 2%.
However, there are 5% cash back cards that do not impose limits on how much you can earn and do not require activation of bonus rewards every quarter. for example, Amazon Rewards Visa Signature Card Earns 5% back on qualifying purchases, no limit on earnings. But 5% earning is available only to card holders with a paid Amazon Prime Membership.
How can you maximize the value of 5% cash back card?
Cards that offer 5% cash back with rotating bonus categories can be a good choice when you are shopping with quarterly bonus categories – but not necessarily for purchases that do not qualify for the higher cash back rate.
Research bonus categories when using a 5% cash back card and according to your purchase plan, says Hudson. If you know your card’s rotating cash back calendar for the year, or at least plan for the upcoming quarter, plan purchases so that they align with the card’s bonus categories, especially if they are buying. You plan to make it at any point in any year.
When choosing a new 5% cash back credit card, look ahead to the cash back calendar if possible, and compare it with your spending. It is a good idea to look at the previous calendar to get an idea of what categories may be offered in the future.
A popular strategy for 5% cash back cards is to use them exclusively for purchases that qualify for 5% cash back, combining them with another card from 1.5% to 2% on purchases. A cash back rate of Rs. 5% rate.
“I would advise against using only your 5% card for all purchases,” Brackenbury says. “This will limit the amount of all the rewards you spend.”
It can try to keep complicated by which cards earn 5% cash on which purchases are made throughout the year. Brackenbury recommends communicating with other cardholders in your home to make sure they know which purchases to use for the card.
How should you use the 5% cash back card?
As with any credit card, you should use a 5% cash back card with caution. Be aware of card limits, and manage your account responsibly to avoid paying more interest and fees than what you earn in rewards.
“Be sure to read the terms and conditions closely to understand where rewards can and cannot be earned,” says Brackenbury. For example, your card can earn 5% cash at grocery stores, but not if you are buying groceries at Walmart or Target.
Brackenbury recommends keeping up to date with the categories by reviewing your account online and reading an email from your card provider.
And don’t give in to excessive expenses because you are earning 5% cash. If you keep a balance, you can expect to pay an annual percentage rate of about 17% to 24%, Which so far surpasses the value of 5% cash back rewards.
If your card has a quarterly limit of $ 1,500 on bonus spending, the bonus you can earn in this quarter is $ 75. It is valuable – but not worth stressing over your budget. The best strategy for using a 5% cash back card is to make the most of the bonus rewards on purchases, nothing more.