Our pick for 5% cashback: Chase Freedom Unlimited®
Up to 5%
Cash back
- Up to 5% cashback and an impressive 1.5% base cashback rate
- 15 months of intro APR on purchases
- No annual fee
With a few exceptions, a 5% cashback credit card is one of the most rewarding types of cards you can add to your wallet. The main caveat: There are no cashback rewards cards that earn 5% on all purchases, so you’ll need to adjust your spending based on the card’s rotating quarterly categories. Since the cards also have specified spending caps, you’ll only get the 5% cashback rate on up to a designated amount. That’s why the best way to maximize your cash back is to pair this card with a steadier cashback card, like a 1.5% or 3% cashback card.
Below are cards that earn 5% back in at least one category. You’ll generally need good or excellent credit to qualify for a card with such strong rewards.
This type of card usually offers 5% cash back on rotating categories every three months, though the categories they earn, spending caps, and cash back they earn on other purchases often vary greatly between cards. Here’s how you can make the choice that best suits your needs:
To give you an idea of whether a 5% cashback credit card fits your spending lifestyle, here’s a breakdown of what you might earn in several categories assuming an average level of spending each quarter of the year (Q1, Q2, Q3, Q4).
For this example, we’ll assume we’re spending with the Chase Freedom Flex’s 2020 categories — each quarter is made up of three months. This table also excludes the Chase Freedom Flex’s signup bonus on grocery spending.
Q1 (Jan-Mar) | Q2 (Apr-Jun) | Q3 (July-Sept) | Q4 (Oct-Dec) | |
---|---|---|---|---|
Groceries ($1,500 in spending each quarter) | $15.00 | $75 | Up to $75 if done at Whole Foods | $15.00 |
Gas ($750 in spending each quarter) | $37.50 | $7.50 | $7.50 | $7.50 |
Dining ($690 in spending each quarter) | $6.90 | $6.90 | $6.90 | $6.90 |
Streaming ($120 in spending each quarter) | $1.20 | $6 | $1.20 | $1.20 |
Total | $60.60 | $95.40 | $90.60 | $30.60 |
Total earned annually: $277.20
Now here’s the same level of spending each quarter when performed with the Citi Double Cash, which earns a maximum of 2% cash back on all purchases.
Q1 | Q2 | Q3 | Q4 | |
---|---|---|---|---|
Groceries ($1,500 in spending each quarter) | $30 | $30 | $30 | $30 |
Gas ($750 in spending each quarter) | $15 | $15 | $15 | $15 |
Dining ($690 in spending each quarter) | $13.80 | $13.80 | $13.80 | $13.80 |
Streaming ($120 in spending each quarter) | $2.40 | $2.40 | $2.40 | $2.40 |
Total | $61.20 | $61.20 | $61.20 | $61.20 |
Total earned annually: $244.80
As you can see, the Citi Double Cash earns a steady and reliable cash back value each month. But in eligible quarters, the Chase Freedom Flex can net a much greater value if you push the spending cap to the max.
The rotating cashback structure of a 5% cashback credit card means that it naturally pairs well with a card that can earn accelerated rewards in a steadier fashion. A 1.5% flat rate cashback card or 3% cashback card can fill in the gaps present in the 5% card’s rotating categories.
In fact, you can combine all three types of cards to ensure you’re always earning more than 1% cashback on a given purchase. This is called a card “trifecta” and is most popular with rewards programs that can easily transfer points across the cards you own. The Chase Trifecta and Amex Trifecta are both great examples of how lucrative this kind of setup can be for your wallet. Here’s a look at the two major earning players in the Chase Trifecta, the Chase Freedom Flex and the Chase Freedom Unlimited.
★★★★★
Annual Fee | $0 |
---|---|
Purchase APR | 0% intro for the first 15 months (then 14.99% to 23.74% variable) |
Balance transfer APR | 14.99% to 23.74% variable |
Welcome offer | $200 after spending $500 in the first 3 months |
Rewards | 5% back in rotating categories up to $1,500 combined each activated quarter (then 1%), 5% on travel purchased through Chase, 3% on dining and drugstores, and 1% on all other purchases |
★★★★★
Annual Fee | $0 |
---|---|
Purchase APR | 0% intro for the first 15 months (then 14.99% to 23.74% variable) |
Balance transfer APR | 14.99% to 23.74% variable |
Welcome offer | $200 after spending $500 in the first 3 months |
Rewards | 5% cash back on travel purchased through Chase, 5% on Lyft, 3% on dining and drugstores and 1.5% on all other purchases |
Though 5% cashback credit cards are among the highest earners on the market, not every consumer will necessarily perform the type of spending needed to maximize this value. If you don’t want to monitor new categories each quarter, a 3% cashback credit card can offer you a similar level of accelerated earnings in a specific category that won’t change throughout the year.
However, 3% cashback credit cards usually share the earning caps present on 5% cashback credit cards. If you’d rather not worry about categories or spending caps, a flat-rate 2% or 1.5% cashback credit card is your best bet. Like the name suggests, these cards earn a flat-rate on all purchases, all year round with no limits.
Finding a card that offers 5% cash back is a good perk to have. However, there are sometimes categories you have to manage and caps on the amount of cash back you can earn. If you’re not sure if any of these cards would be a good choice, take a look at other cashback credit cards and compare your options until you find the right card for your needs.
Support your child’s financial knowledge and teach the important real-life money skills in a safe and controlled way with a kids’ debit card.
This insurer has four dental plans to choose from — compare costs and features now.
This new debit card will let you pay for purchases over time when it debuts later this year.
Get up to 90% off popular brands through ThredUp, a secondhand clothing website. Here’s what you need to know before you start shopping.
Two great cards for building your credit score.
Shop Ulta’s sale event, with deep discounts on products including L’Oréal mascara, Bioré pore strips and Not Your Mother’s dry shampoo.
Prepare to revamp your asset allocation and explore new investment classes.
How states compare on employment, earnings, poverty, education, health and wellbeing.
Compare pros and cons of selling on Poshmark vs. Tradesy to help you get the most for your secondhand clothing, shoes and accessories.
Sephora regulars get to earn rewards on their purchases.