When it comes to choosing a cash back credit card, there are a lot of factors that go into picking the right card for you, from how you earn cash back to what other perks and benefits the card has to offer. Many people might find themselves wondering whether a card with fixed or rotating cash back categories is the better choice for them. There are certainly benefits to both choices, but how can you know what’s right for you? We decided to compare and contrast these two types of cash back rewards programs to help you choose. As an added bonus, we’ve outlined the top credit cards in both categories for you to consider.
Fixed cash back credit cards
Advantages: Certainly, the biggest draw of a credit card with fixed cash back categories is that you always know what you’re going to get, in terms of cash back rewards. If you’re someone who spends a significant amount of money in certain areas, such as gas or groceries, or you’d just like to get back a flat percentage from all your purchases, then it makes sense to choose a cash back rewards credit card that’s going to get you the most bang for your buck.
Disadvantages: Some cardholders may wind up feeling limited by the same old categories month after month, year after year. If your lifestyle changes and suddenly you’re only grocery shopping for one or you aren’t eating out anymore to save some money, then you could find yourself with a cash back rewards credit card that isn’t really making you very much.
Rotating cash back credit cards
Advantages: If you’re someone who likes change and wants to spread your earning potential over a variety of different spending categories throughout the year, a cash back credit card with rotating categories might be up your alley. Since the categories change instead of staying the same all year, these cards often offer higher cash back percentages in the promotional categories than rewards cards in fixed categories might.
Disadvantages: Given the ever-changing nature of a credit card with rotating cash back categories, there may be some periods where you just won’t earn much cash back because you don’t spend money in those categories. Likewise, most credit cards with rotating categories require cardholders to activate or sign up each earning period, so you have to remember to do so in order to get your cash back.
So what cash back card should you get?
Once you’ve decided which type of rewards card you’d like to get, you still have to choose a card to apply for, which can be hard considering how many there are out there! To help you out, we’ve rounded up some of the top credit cards offering fixed or rotating cash back.
If you want to earn fixed cash back in specific spending categories …
The Blue Cash Preferred Card from American Express (a NextAdvisor advertiser) is a cash back powerhouse, offering a jaw-dropping 6% cash back on groceries (up to $6,000/year in purchases, then it’s 1%), unlimited 3% at U.S. gas stations and select department stores and 1% on everything else. On top of all that, if you apply by 5/3/17, you’ll get 10% cash back at U.S. restaurants in the first 6 months (up to a $200 back maximum), and if you spend $1,000 on purchases within your first 3 months, you’ll get a $150 cash back bonus. Rounding out this card is 0% intro APR for 12 months on both purchases and balance transfers (there is a $5 or 3% balance transfer fee). There is a $95 annual fee associated with this card, so if that’s a dealbreaker, you might want to consider its sister card, Blue Cash Everyday from American Express, which offers similar rewards — 3% cash back on groceries up to a $6,000 annual maximum, 2% cash back on gas and select department store purchases, plus the limited-time 10% cash back at restaurants — and bonuses without an annual fee. If you need more help deciding between the two, one of our editors wrote about her experience making the same decision.
Those interested in earning a little more on gas might find the BankAmericard Cash Rewards Credit Card more to their liking. In addition to 3% cash back on gas, cardholders earn 2% at wholesale clubs and grocery stores, up to a combined quarterly maximum of $2,500 (all purchases after that earn 1%). Online applicants can get a $100 bonus if they spend $500 within the first 90 days of opening their account, and Bank of America customers can earn an ongoing 10% to 75% cash reward bonus (depending on what type of account you have) when they redeem their rewards directly into their bank account. Other notable perks of this rewards card include a 0% intro APR for 12 billing cycles on purchases and balance transfers made within the first 60 days and no annual fee. If you’re a die-hard MLB fan or want your purchases to benefit a good cause, consider one of its two sister cards — MLB BankAmericard Cash Rewards Mastercard and Susan G. Komen Credit Card — which offer identical perks and rewards.
Rounding out our list is new kid on the block, the Capital One Premier Dining Rewards Credit Card, which is a restaurant lover’s dream cash back rewards card, as you can earn unlimited 3% cash back rewards on dining, plus unlimited 2% cash back on groceries and 1% on everything else. Other perks include a $100 cash bonus when you spend $500 on purchases within 3 months of approval, no annual fee or foreign transaction fees and rewards that never expire. While this card also doesn’t charge a balance transfer fee, keep in mind that there isn’t a 0% intro APR period on purchases or balance transfers, so it’s not an ideal choice for those wanting to transfer a balance or make a large purchase and pay it off over time.
If you want to earn fixed cash back on all of your purchases …
Those looking for a credit card that’ll earn them a flat cash back rate on every purchase they make will appreciate the Barclaycard CashForward World Mastercard. All purchases made with this card earn an unlimited 1.5% cash back, and as an added perk, when you redeem your rewards, you’ll earn a 5% bonus that you can use toward your next points redemption. Though there is a minimum redemption of $50, which is higher than many other rewards credit cards requiring a minimum redemption of $25, the bonus still a nice perk that’ll make your total effective earnings 1.575% cash back. That’s not all — cardholders who spend $1,000 within their first 90 days after account opening will earn a huge $200 bonus. Finally, this card features no annual fee and a 12-month 0% intro APR on balance transfers made within the first 45 days (with a 3% balance transfer fee).
Cardholders can earn big with the Wells Fargo Cash Wise Visa Card, which offers an unlimited 1.5% cash back on virtually all purchases, as well as the opportunity to earn 1.8% on all purchases made when using Apple Pay or Android Pay during the first 12 months from account opening. Spend $1,000 within the first 3 months, and you’ll be rewarded with a $200 bonus. There’s a 12-month 0% intro APR period on purchases and balance transfers with this card, and balance transfers made during this time period will be charged an intro 3% balance transfer fee (after 12 months, it’s 5%). Another great perk offered to cardholders is mobile phone protection, which covers up to $600 (after a $25 deductible) against covered damage or theft as long as you pay your cell phone bill with your card. It should be noted that anyone can open this card, but Wells Fargo customers have more cash back redemption flexibility.
With the Citi Double Cash Card 18 month BT offer, (a NextAdvisor advertiser) not only will you earn an effective 2% cash back on all your purchases (1% at the time of purchase, and an additional 1% when you pay it off), but you’ll also get 18 months of 0% intro APR on balance transfers (with a 3% balance transfer fee). Although this card is best for those who pay their balance in full each month because there’s no 0% intro APR on purchases, no matter how long it takes you to pay off your balance, you will receive the additional 1% on your purchases when you get to it. Like many of the cards we’ve already highlighted, this one has no annual fee to worry about.
If you want to earn cash back in rotating categories …
Discover it – Cashback Match offers new cardholders a cash back bonus almost too good to be true: in addition to earning ongoing rewards in the form of 5% cash back on purchases in quarterly rotating categories (up to the quarterly maximum, currently $1,500, then it’s 1% back) and 1% on all other purchases, at the end of your first 12 months as a cardholder, Discover will match all the cash back you’ve earned. That means if you earn $250 in your first year, you’ll receive another $250 at the end for a total of $500 back! Other perks include a 14-month 0% intro APR on purchases and balance transfers (with a 3% balance transfer fee), no annual fee and the Discover Freeze it feature which helps protect your account by letting you freeze your card from a smartphone or computer if you misplace it. You do have to activate the 5% categories each quarter to receive cash back, but you can sign up to be sent email alerts to remind you.
Chase Freedom – $150 Bonus earns cardholders 5% on purchases made in quarterly rotating categories (up to $1,500 combined purchases per quarter, then it’s 1%) as well as an unlimited 1% cash back on all other purchases. Remembering to sign up for the rotating cash back categories is a breeze with Chase’s reminder feature, which will send you a text or email each quarter. Anyone looking to save on interest will appreciate 15 months of 0% intro APR on purchases and balance transfers (with a 5% balance transfer fee), and there also isn’t an annual fee associated with this card. The cherry on top of this credit card is the $150 bonus you can earn by spending just $500 within the first 3 months of account opening. If you prefer a card with the same intro bonus and 0% intro APR that offers fixed cash back rewards, you may want to check out its sister card, Chase Freedom Unlimited, which earns an unlimited 1.5% cash back on all purchases.
Not seeing a card that hits the mark or want to learn more about these cards and others? Read our reviews of the best credit cards for more in-depth comparison and coverage, and don’t forget you can use our free Cash Back Calculator to determine the perfect credit card to suit your spending habits.
Disclaimer: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author’s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This content was accurate at the time of this post, but card terms and conditions may change at any time. This site may be compensated through the credit card issuer Affiliate Program.