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What are rotating category credit cards, and how do they work?

These cards allow you to earn high-level cash back percentages on a variety of everyday expenses over the course of a year

Summary

The best rotating category credit cards are the Discover it Cash Back card and the Chase Freedom Flex card – but how do you decide which card is better for you?

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Rotating categories on a credit card – for some people, a rotating category credit card can be a powerful tool, giving them the opportunity to earn 5% cash back on many different shopping categories throughout the year. Other people avoid rotating credit cards because they don’t like strategizing to use them well or simply don’t understand how they work.

Whether a rotating category credit card is right for you depends on what you’re hoping to get out of your credit card. Most of today’s best credit cards offer rewards, but not all credit cards give you the opportunity to earn high-level cash back rewards on rotating bonus categories. Here’s what you need to know about rotating category credit cards, including how rotating category cards work, some common rotating credit card categories and how to choose between the two best rotating category credit cards currently on the market.

What are rotating category credit cards?

Rotating category credit cards are cash back credit cards that offer their highest cash back percentage in shopping categories that rotate on a regular basis, often quarterly.

Unlike flat-rate cash back cards that offer the same cash back percentage on every purchase and bonus category cash back cards that offer higher cash back percentages on spending categories that never change (such as credit cards that reward grocery shopping), rotating category credit cards give you the opportunity to earn high-level cash back percentages on a variety of everyday expenses over the course of a year. In January, your bonus categories might include drugstores and gas purchases; by September, your bonus categories could have switched to home improvement stores and Amazon.com.

The best rotating category credit cards feature popular spending categories throughout the year, giving you the opportunity to maximize your bonus category rewards no matter what category is currently earning the bonus.

How do rotating category cards work?

Rotating category credit cards generally offer a high rewards rate – typically 5% cash back – on a few shopping categories that change every quarter. There’s usually a limit on the amount of bonus category rewards you can earn per quarter; once you maximize your bonus category rewards, any additional purchases in your bonus categories will earn cash back at the card’s regular rewards rate.

What are the rotating categories on a credit card? It all depends on the card. Common bonus categories include restaurants, department stores, home improvement stores, groceries and gas – as well as specific retailers sometimes, such as Walgreens, Target or Amazon.com.

What are the best rotating category credit cards?

The best rotating category credit cards are the Discover it® Cash Back card and the Chase Freedom Flex℠. Both of these cards offer 5% cash back on bonus categories that rotate every quarter, for a maximum of $1,500 in purchases (or $75 cash back) every quarter. The Discover it Cash Back card offers a flat 1% cash back on all other purchases, while the Chase Freedom Flex offers a range of cash back percentages depending on your shopping category.

The Discover it Cash Back card and the Chase Freedom Flex card have many similar features—but the amount of rewards you can earn with each card will depend on your shopping habits and your financial goals. Here’s how to decide whether the Discover it Cash Back or the Chase Freedom Flex is right for you.

Discover

The Discover it® Cash Back card offers 5% cash back on shopping categories that rotate every quarter, for up to $1,500 in purchases per quarter. All other purchases receive an unlimited 1% cash back.

Plus, first-time cardholders can take advantage of Discover’s Cashback Match program, which matches all of the rewards you earn during your first year as a cardholder. If you maximize your bonus category spending every quarter, for example, you’ll earn $75 cash back per quarter or $300 per year – and at the end of your first year, Cashback Match will match the rewards you’ve earned with another $300 in cash back.

What are the Discover credit card rotating categories? In 2021, the Discover it Cash Back calendar includes the following rotating bonus categories:

QuarterBonus categories
Winter (January to March)
  • Grocery stores
  • Walgreens
  • CVS
Spring (April to June)
  • Gas stations
  • Select streaming services
  • Wholesale clubs
Summer (July to September)
  • Restaurants
  • PayPal
Holiday (October to December)
  • Amazon.com
  • Target.com
  • Walmart.com

Before you can start earning 5% cash back on your bonus category purchases, you need to activate your bonus categories. Discover makes it easy to activate your rotating categories – all you have to do is log in to your Discover online account or app and select the option to activate your bonus categories. (Want an even easier option? Discover will email you an activation link that works in a single click, no login necessary.)

It’s a good idea to activate your quarterly bonus categories well in advance of the start date because you won’t earn bonus cash back on any of your rotating bonus purchases until they are activated. If you make a restaurant purchase on July 1 but don’t activate your quarterly bonus categories until July 10, for example, your July 1 restaurant purchase will only earn 1% cash back.

Chase

Like the Discover it Cash Back card, the Chase Freedom Flex card offers 5% cash back on shopping categories that rotate every quarter, for a maximum of $1,500 in purchases per quarter. However, the Chase Freedom Flex also gives you the opportunity to earn bonus category cash back on a select number of fixed spending categories, including these:

  • 5% cash back on grocery store purchases (not including Target or Walmart) on up to $12,000 spent in your first year as a cardholder
  • 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

All other purchases earn a flat 1% cash back, and new cardholders can earn a sign-up bonus of $200 after spending $500 in the first three months.

What are the Chase credit card rotating categories? Unlike Discover, Chase does not announce its bonus categories in advance – but those for the fourth quarter of the year have been announced recently. Here are Chase’s rotating bonus categories for 2021:

QuarterBonus categories
Winter (January to March)
  • Select streaming services
  • Phone, cable and internet services
  • Wholesale clubs
Spring (April to June)
  • Home improvement stores
  • Gas stations
Summer (July to September)
  • Grocery stores (excluding Walmart and Target)
  • Select streaming services
Holiday (October to December)
  • Walmart and PayPal purchases

Like Discover, Chase requires you to activate your rotating bonus categories before you can earn the 5% cash back. Unlike Discover, however, Chase applies your activation to the entire quarter – as long as you activate before the activation deadline, which is generally 15 days before the quarter ends. This means that if you make a grocery store purchase on July 1 but don’t activate your summer bonus categories until July 10, your July 1 grocery store purchase will still earn 5% cash back.

How can I maximize my rotating category card?

The best way to maximize your rotating category cash back rewards is by planning ahead. Make sure to activate your rewards as soon as possible and use the rotating bonus categories to help plan your spending. If you know that grocery purchases are going to earn 5% cash back during a specific quarter, for example, consider stocking up your freezer and maximizing your rewards.

It’s also a good idea to pair one of the best rotating category credit cards with another top rewards card. Use your rotating category card any time you can earn 5% cash back and use your other rewards card for any purchases that might only earn 1% cash back on your rotating category credit card. That way, you can earn industry-leading rewards on everything you buy – no matter what category it is.

See related: How to stack cards to get the most on your everyday spending

Final thoughts

The best rotating category credit cards offer 5% cash back on popular spending categories that rotate every quarter, giving you the opportunity to earn rewards on a variety of purchases. Once you understand how rotating category cards work and how to maximize your rotating category rewards, you can start using these powerful rewards cards to plan your shopping and maximize your cash back potential.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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