We’ve compared six 5% cash back credit cards and found the winner.
In the world of rewards credit cards, 5% cash back is a generous offer that comes with either rotating or flexible 5% back categories. How do these cards compare to each other? Is there one that beats all the others?
Welcome to the battle of 5% cash back cards! We’re going to set these cards against each other, analyze their value, strengths and weaknesses, and find out which card has the most to offer.
Let the best card win.
Cards with rotating categories
No-annual fee cards with rotating quarterly categories are the most common version of a 5% cash back credit card. They offer 5% back in bonus categories that change every quarter and typically require activation.
Round 1: Discover it® Cash Back vs. Chase Freedom FlexThe two most popular rotating category cash back cards are the Discover it® Cash Back and the Chase Freedom Flex℠.
The way 5% cash back bonus categories work on these two cards is identical. You can earn 5% back in rotating categories you need to activate each quarter, and there’s a $1,500 quarterly spending limit on combined purchases. After you reach the limit, you’ll earn 1% back on purchases in these categories. General purchases earn 1% back as well.
This is, however, where the similarities end.
The Freedom Flex also has a more attractive rewards structure. Besides 5% back in rotating categories, it earns:
- 5% cash back on grocery store purchases (not including Target or Walmart) on up to $12,000 spent in first year
- 5% cash back on Lyft purchases (through March 2022)
- 5% cash back on travel purchased through Chase Ultimate Rewards
- 3% cash back on dining
- 3% cash back on drugstore purchases
As you can see, there’s a lot of earning potential all year round. Redemption options are abundant too, ranging from travel to cash to gift cards. Additionally, if you combine the Flex with the Chase Sapphire Preferred Card or the Chase Sapphire Reserve card, you can boost your rewards value 25% or 50% respectively when redeeming for travel through the Ultimate Rewards portal.
The Discover it Cash Back offers none of that. The redemption options include direct deposit, statement credits, gift cards and more, but you can’t redeem for travel.
One unique feature of the Discover it Cash Back is CashBack Match: The issuer will match all the cash back you earn at the end of the first year with the card. This means that if you maximize rotating categories (meaning you hit the $1,500 spend cap each quarter), you’ll earn at least $300 in annual cash back and another $300 after your first card anniversary.
The Flex’s welcome bonus is only $200 for spending $500 in the first three months. On the other hand, the card comes with an appealing 5% back on grocery purchases in the first year (excluding Walmart and Target) with a generous $12,000 limit in combined purchases.
Groceries are a lucrative category which provide significant earning potential in the first year. In the scenario where you maximize the rotating categories and spend at least $167 on groceries monthly, the Chase Freedom Flex beats the Discover it Cash Back in the first-year value – and we’re not even factoring in extra bonus categories on the Chase Freedom Flex.
If we do factor in the Flex’s bonus categories, we have a clear winner – in the first year and beyond.
Round 2: ABOC Platinum Rewards vs. Citi Dividend
Our next two contenders aren’t available for new applications at the moment, but we’re going to take a look at them too, to keep this credit card fight fair.
The Citi Dividend Card earns 5% in rotating quarterly categories, up to an annual total of $300 in cash back (for combined earnings in bonus categories and on general purchases). Similar to the Chase Freedom Flex, the Citi Dividend announces categories one quarter at a time.
The ABOC Platinum Rewards is more like the Discover it Cash Back and announces all four quarters worth of categories before the year starts. It also offers 5 points per dollar on up to $1,500 in combined spending in bonus categories and 1 point per dollar on all other spending.
The ABOC Platinum offers more earning potential than the Citi Dividend. With the ABOC Platinum, you can continue to earn 1 point per dollar on all purchases even after meeting the cap in the 5-point categories.
Not only does the Citi Dividend limit your annual cash back to $300, but it also has fewer categories each quarter – only two against the ABOC Platinum’s four or five.
All in all, the ABOC Platinum offers more potential value, comes with more categories each quarter and requires less maintenance – and therefore, wins this round.
Semifinal: The Chase Freedom Flex vs. the ABOC Platinum Rewards
The ABOC Platinum Rewards may be low maintenance and have a wider range of bonus categories, but the Chase Freedom Flex is hard to beat.
The additional bonus categories on the Chase Freedom Flex offer earning potential the ABOC Platinum can’t match.
Plus, if you have or are planning to get other Chase credit cards that earn Ultimate Rewards points, you can stretch your rewards even further by pooling them and redeeming for travel or transferring to travel partners. That way, you’ll be able to get a value of over 1 cent per point – something the ABOC Platinum can’t offer.
Winner in cards with rotating categories: Chase Freedom Flex
Cards with a flexible 5% cash back category
Rotating categories can yield excellent value, but they also can be hit or miss. Occasionally, there can be a quarter when you may find it hard to maximize any of the bonus categories. You may end up wishing you could just pick a category yourself.
Fortunately, there are cards that will let you do just that.
Round 3: U.S. Bank Cash+ Visa Card vs. Citi Custom Cash
The U.S. Bank Cash+™ Visa Signature Card* has quite a unique rewards system. Each quarter, cardholders get to choose two categories in which they’ll earn 5% back on up to $2,000 in combined purchases per quarter. Additionally, they can pick a 2% cash back category with no spending cap. All other purchases earn 1% back.
Currently, eligible 5% categories include TV, internet and streaming services, fast food, cellphone providers, department stores, home utilities, select clothing stores, electronics stores, sporting goods stores, movie theaters, gyms and fitness centers, furniture stores and ground transportation. As for 2% cash back categories, you can choose from grocery stores, gas stations and restaurants.
You must choose and activate bonus categories each quarter. Otherwise, you’ll only earn 1% back on all purchases.
The Citi Custom Cash℠ Card is the most recent addition to Citi’s credit card roster. It offers 5% cash back on purchases in your top eligible spending category each billing cycle (up to the first $500 spent, 1% back thereafter) and 1% back on everything else.
Categories that qualify for 5% back include restaurants, gas stations, grocery stores, select travel, select transit, select streaming services, drugstores, home improvement stores, fitness clubs and live entertainment.
The card defines your top category automatically each billing cycle.
As you can see, both cards offer plenty of flexibility. That said, the 5% categories on the U.S. Bank Cash+ can be hard to maximize. They may work well for big purchases, but that implies plenty of planning on your part. If you happen to spend a lot in any of these categories or are ready to plan out your spending throughout the year, you can make up to $400 in cash back per year in your 5% categories. That said, we don’t think most spenders will be able to meet the full spend cap.
The 2% cash back categories are more lucrative, with grocery stores and restaurants being some of the most common expenses for many people.
Some of the 5% categories on the Citi Custom Cash, on the other hand, are much more appealing, including groceries, restaurants and travel. Not to mention, you’re not tied to any category. This means that one month you can pay off your gym membership for a year ahead, and the next month you can buy a concert ticket. This makes maximizing the value of this card rather easy if you put some thought in it.
The maximum you can make in your 5% categories with the Custom Cash is limited to $300 per year. That’s $100 less in potential value than what you can make from U.S. Bank Cash+ 5% categories. Plus, all your non-category spending with the Custom Cash will only earn 1% back, while the Cash+ earns unlimited 2% back in a lucrative category.
Note, however, that due to the types of categories eligible for 5% back with the Cash+, maximizing the value of this card can be a lot of work – perhaps even too much for an average cardholder. Instead, let’s take a look at a more realistic scenario.
Crunching the numbers
Say, your annual spending is $15,900, which we consider to be the average credit card spending per year.
You pick groceries as your 2% category on the Cash+ each quarter and spend about $4,650 at grocery stores annually, which is about average for an American household, according to U.S. Bureau of Labor Statistics data.
For your 5% categories, you pick clothing and home improvement stores – two of the more appealing purchase categories on the list – and spend about $1,100 in them annually. The rest of your spending ($10,150) earns you 1% back.
In this scenario, your annual cash back will be $93 in the 2% category, $55 in the 5% categories and around $102 from everything else. Your total annual cash back will sum up to $250.
Let’s apply a similar scenario to the Custom Cash card. You spend $15,900 annually, $4,650 of which you spend for groceries – your top spending category each billing cycle – bringing in 5% back. There’s no 2% category to up your earnings, so all your general purchases will only earn 1%. In this scenario, you’ll earn around $233 from the 5% category and $113 from general purchases. Therefore, you’ll get about $346 in annual cash back.
As you can see, when you apply the math, the Cash+ loses. While it offers more potential value, that value is too hard to unlock without a lot of strategy and tailoring spending to the card. The Custom Cash, on the other hand, doesn’t require as much maintenance and is a flexible card with more attractive 5% categories.
Final round: Chase Freedom Flex vs. Citi Custom Cash
We’ve arrived at our final round with two contenders: the Chase Freedom Flex and the Citi Custom Cash.
Both are excellent cash back cards. The Custom Cash is a good choice for both credit card enthusiasts and cardholders who prefer simplicity. The Chase Freedom Flex offers amazing value with its extra bonus categories and access to Ultimate Rewards, one of the most valuable credit card currencies.
This is going to be a tough round. Let’s see how the cards stack up.
The Custom Cash has more flexible 5% categories that require no activation. You can earn up to $300 from 5% categories annually with either card. But with the Freedom Flex, ironically, you have less freedom: You’re tied to the categories you activate and can’t even plan for them in advance.
Extra bonus categories are where the Custom Cash gets knocked out. The extra 3% and 5% categories on the Freedom Flex can be truly lucrative. The Custom Cash only offers 1% on everything outside of your top eligible spending category.
The Chase Freedom Flex also wins in first-year value. The Citi Custom Cash offers a $200 sign-up bonus after you spend $750 on purchases in the first three months. The Chase Freedom Flex also offers $200, but you’ll only need to spend $500 in the first three months.
Additionally, you’ll earn 5% cash back on groceries (excluding Target or Walmart) on up to $12,000 spent in your first year with the Flex.
The Citi Custom Cash has better intro APR offers: 0% for 15 months on purchases and 0% for 15 months on balance transfers (13.99% to 23.99% variable APR thereafter).
With the Flex, you’ll only get a 0% intro APR on purchases for your first 15 months (14.99% to 23.74% variable APR thereafter).
The Freedom Flex can potentially offer better rewards value. Both the Custom Cash and the Freedom Flex, even though marketed as cash back cards, earn points. The Freedom Flex gives you access to the Ultimate Rewards ecosystem. The Citi Custom Cash earns ThankYou points.
With both cards, the point value is 1 cent per point for most redemption options. This seems to be a tie – unless we consider how you can stretch your Chase points if you have a Sapphire card. Combining the Flex with the Sapphire Preferred or Reserve boosts your value to 1.25 or 1.5 cents per point when redeemed for Ultimate Rewards travel.
You could combine your ThankYou points with those from multiple Citi cards too, but they’d still lose to Ultimate Rewards points in value. Besides, Citi’s transfer partners are less appealing, and you won’t get a point boost for redeeming through Citi.
Both the Freedom Flex and Custom Cash offer some desirable perks, like a complimentary DashPass subscription for three months (automatic enrollment at 50% off for nine months after that) and a ShopRunner membership.
When all is said and done, we have to give this one to the Chase Freedom Flex. Though the Custom Cash put up a fair fight with its intro APRs and flexible 5% categories, the extra earning potential on the Freedom Flex edges it out in the end.
The battle winner: Chase Freedom Flex
All of our contenders have plenty of value to offer, and this fight hasn’t been easy. Still, we have our champion.
The Chase Freedom Flex wins the battle of 5% cash back cards, thanks to its generous bonus categories, opportunities that come from participating in Ultimate Rewards, useful perks and, of course, great value in the first year and beyond.
If you’re interested in a 5% cash back credit card, remember that none of our contenders charge an annual fee. This means that you can get more than one of these cards without worrying about their cost and use them in tandem to get even more cash back.
Head over to CardMatch to find credit card offers tailored to your credit profile. Checking your offers won’t affect your credit, and you’ll be able to see the cards you’re most likely to be approved for.
*All information about the U.S. Bank Cash+ Visa Signature Card has been collected independently by CreditCards.com and has not been reviewed by the issuer.