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Guide to Using Rotating Rewards Categories

Rotating rewards cards offer more flexibility than most credit cards, but it’s important to understand the rules.

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Certain rewards credit cards feature rewards that rotate quarterly or change depending on your spending habits. 

These cards tend to provide a return on a variety of different purchase types, from popular stores and vendors like Target and Amazon, or things like gym memberships and streaming services. Some of them require manual activation of the categories each quarter, while others offer automatic activation.

What is a rotating rewards card?

A card that changes rewards every quarter or every few months is considered a rotating rewards card. Some examples of popular rotating rewards cards include the Chase Freedom Flex℠*, the Discover it® Cash Back*, the Bank of America® Customized Cash Rewards credit card* and the Citi Custom Cash® Card*.

Pros and cons of rotating rewards cards

Pros

  • High cash-back earnings on qualifying purchases in bonus categories

  • Some offer rewards for less-common categories

  • Best cards do not have an annual fee

Cons

  • Typically lower spending limits before the higher cash-back rates fall significantly

  • Some cards require manual activation of bonus categories

  • Risk of overspending in bonus categories

  • The hassle of tracking of bonus categories that may change every quarter

Who should use a rotating rewards card?

Anyone who spends across a variety of purchase categories could benefit from a rotating rewards card. Some cards offer rewards for some less-common categories such as home improvement stores, online shopping or fitness memberships. And the best rotating rewards cards don’t charge an annual fee.

Who should not use a rotating rewards card?

Cards with rotating rewards can help you earn more cash-back on purchases, but only if you remember to activate your bonus category and plan your spending according to the bonus category calendar. 

If you don’t have the time to activate a category or don’t want the hassle of remembering which card to use to maximize the rewards you earn, you might be better off using a flat-rate cash-back rewards card instead.

And if there’s a chance you’ll make unnecessary purchases just to earn rewards in a bonus category, you may run the risk of overspending and ending up in credit card debt.

The best rotating rewards cards

Chase Freedom Flex℠

The Chase Freedom Flex℠* has more earning potential than most credit cards. In addition to rotating rewards, it offers static cash-back categories for travel through Chase Ultimate Rewards, drug stores and dining.

Its 5% cash-back rotating categories are limited to the first $1,500 spent each quarter. The current 5% categories for April through June 2024 are Amazon.com, hotels and restaurants.

With the Freedom Flex, you must manually activate the categories to earn the higher rewards rate. As long as you activate by the date specified by Chase -- for example, for this quarter cardholders need to activate by June 14, 2024 -- any qualifying rewards for previous purchases in that quarter will retroactively apply to your account.

Discover it® Cash Back

The Discover it® Cash Back* offers 5% cash back (limited to the first $1,500 spent each quarter, then 1%) on rotating categories but doesn’t have any static categories. The categories for April through June 2024 are gas stations, EV charging stations, home improvement stores and public transit. One of the biggest draws to Discover cards is their welcome bonuses. Called Cashback Match™, Discover will essentially double the rewards you earn during your first year with the card at the end of your first year.

You’ll need to activate your rewards each quarter, and if you activate later in the quarter, you won’t earn retroactive rewards.

Bank of America® Customized Cash Rewards credit card

The Bank of America® Customized Cash Rewards credit card* works a bit differently than other rotating rewards cards. Each month you can choose one 3% cash-back category in addition to earning 2% cash back for grocery stores and wholesale clubs. 3% and 2% rewards are limited to the first $2,500 spent in combined purchases each quarter, then the rate falls to 1%.

Your 3% category choices include gas, online shopping, dining, travel, drug stores or home improvement and furnishings. Cardholders can change their 3% category once per month. So while the rewards don’t technically rotate, you can still choose to change them depending on your expected spending.

Citi Custom Cash® Card

Another card with changing rewards, the Citi Custom Cash® Card offers 5% cash back (on the first $500 of each billing cycle, then 1%) for your eligible top-spend category. There’s no need to manually activate categories with this card -- instead, you’ll receive the higher tier reward rate for whichever category you spend the most on during that billing cycle.

Eligible categories include restaurants, gas stations, grocery stores, select travel, select transit, select streaming services, drugstores, home improvement stores, fitness clubs and live entertainment.

How to use rotating rewards

There are three things to keep in mind when utilizing a rewards card with rotating categories:

  • Remember to activate your bonus categories. Avoid missing out on rewards by remembering to activate your categories (if required) at the start of a new quarter.
  • Make sure you’re using your card for the correct purchases. You’ll need to keep track of which purchases your card earns the most rewards for. 
  • Be aware of the card’s higher rewards rate limit. Once you hit that mark, consider switching to a flat-rate cash-back card to maximize your return.

When using a card like the Custom Cash, it’s also important to track your spending. You’ll want to make sure you’re doing the majority of your spending in the category that you’d like to earn the most rewards for -- but you shouldn’t overspend to earn higher rewards.

The Bank of America Customized Cash Rewards credit card offers a bit more flexibility, as you can decide which category you’d like to earn the most rewards for each month. If you plan to spend more on online shopping or dining one month, simply change your category.

Considering most cards that feature flexible or rotating rewards have lower spending limits before their higher cash-back rates fall significantly, it’s a good idea to pair them with another rewards card, like a flat-rate card, which may help you earn higher rewards once you reach this threshold.

How to maximize rotating rewards categories

Strategically planning your spending throughout the year will help you get the most value out of credit cards with rotating rewards categories. 

Whether it’s tracking a card’s quarterly bonus categories or understanding what your top spending categories are, getting the most rewards may require juggling some expenses to capitalize on the bonus categories. Here are some tips to ensure you maximize your rewards:

  • Keep an eye on rotating categories to get the most out of your card. Bonus categories are typically announced a few weeks in advance. Know your card’s schedule and set an alert on your own calendar to check with your credit card issuer for the upcoming category. It will give you a little more time to plan purchases.
  • Remember to activate your bonus categories. Understand how your card’s bonus category activation period works, and set alerts to activate a bonus category so you can earn the most rewards.
  • Know your bonus category limits. By planning purchases, you can maximize your rewards within the bonus category before switching back to a flat-rate cash-back card that may offer a better reward rate for your other purchases. 

Cards that work well with rotating rewards cards

These general rewards cards work well with rotating rewards cards. Using them in tandem to cover purchases that your rotating rewards don’t can help you maximize your rewards.

Wells Fargo Active Cash® Card

The Active Cash is one of the best flat-rate cash-rewards cards on the market. Its 2% cash-rewards rate will cover the purchases that your rotating rewards card won’t. There’s no annual fee to worry about either, making it an easy choice to pair with another card. In addition to its strong rewards, it offers some useful Visa Signature benefits and an introductory APR offer on purchases and qualifying balance transfers.

You can learn more in our Wells Fargo Active Cash Card review.

Citi Double Cash® Card

The Double Cash offers 2% cash back on every purchase. You’ll get 1% when you use the card, and the other 1% when you pay the purchase off. It’s a good general card to use for any spending that your rotating rewards card doesn’t earn higher rates on, and once you hit higher rewards rate limits for the quarter. It doesn’t charge an annual fee, and there’s a long introductory balance transfer offer should you need to eliminate some existing credit card debt. However, using the card to earn rewards while working to pay down a transferred balance isn’t a great strategy.

Check out all the details in our Citi Double Cash Card review.

Blue Cash Everyday® Card from American Express

The Blue Cash Everyday Card from American Express* offers rewards for everyday expenses including purchases made at U.S. gas stations, U.S. supermarkets and with select U.S. online retailers. Its 3% cash-back rate (on the first $6,000 spent annually on each category, then 1%) is hard to beat for a card without an annual fee, making it a solid pick to use in conjunction with a rotating rewards card. Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit.

Terms apply to American Express benefits and offers. Enrollment may be required for select American Express benefits and offers. Visit americanexpress.com to learn more.

You can read more about it in our Blue Cash Everyday from American Express review.

The bottom line

Rotating rewards cards can be great tools to earn a higher return on a wide variety of purchase types. They work best when paired with general rewards cards, however, to ensure you’re still earning decent rewards rates on most of your purchases. 

 

Just be sure to activate your bonus categories each quarter, keep an eye on spending limits, and use them for the correct purchases.

*All information about the Chase Freedom Flex, Citi Custom Cash Card, Discover it Cash Back, Bank of America Customized Cash Rewards credit card, and Blue Cash Everyday Card from American Express has been collected independently by CNET and has not been reviewed by the issuer.

The editorial content on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. However, we may receive compensation when you click on links to products or services offered by our partners.

Evan Zimmer has been writing about finance for years. After graduating with a journalism degree from SUNY Oswego, he wrote credit card content for Credit Card Insider (now Money Tips) before moving to ZDNET Finance to cover credit card, banking and blockchain news. He currently works with CNET Money to bring readers the most accurate and up-to-date financial information. Otherwise, you can find him reading, rock climbing, snowboarding and enjoying the outdoors.
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