We all have expenses. Whether it’s gas for our commute, grocery shopping, entertainment, office supplies, or online shopping, Americans are constantly spending money. But while we’re spending, saving money by using specific credit cards for those same purchases is also possible. And money back in your pocket is never a bad deal.
While a single credit card that gets you 5% cash back on everything is hard to come by, there are plenty of ways to earn 5% or more in cash back on your purchases. Earning this great cashback rate does require a small amount of planning and strategy, though. So, in this article, you’ll learn how cashback rewards work and how you can save 5% or more on many of your everyday purchases.
- How cashback rewards work
- Credit Cards that will give you (at least!) 5% cash back
- Multiple cashback cards could get you 5% cash back more often
- The bottom line on these 5% cashback credit cards
How cashback rewards work
Earning cash back on your purchases is simple — you pay with your credit card, and you earn a percentage of each purchase back as “cash.” Scoring cash back is a great way to save money on expenses you’d normally pay for anyway. While some cards have general rewards like “1.5% cash back on all purchases,” other cards have specific spending categories like “6% cash back on groceries.” These savings may sound small, but they can make a real difference over the course of a year.
While some people argue that having a credit card that earns points or miles may be “better,” there’s nothing wrong with putting money in any form back in your pocket. For some time, I used cashback cards to save on my monthly bills, and it helped tremendously. So if you’re looking to open a new credit card and debating between cash back versus miles, going with cash back can be a great choice.
While high rates of cashback rewards aren’t typical, they do exist. If you’re wondering which credit card will give you 5% cash back on all your purchases, unfortunately, that’s hard to come by. However, there are some cards that have specific spending categories where you can earn even more than 5% cash back.
Keep reading, and I’ll show you the best cashback credit cards available from a variety of credit card issuers, as well as how you can use them strategically to earn the most cash back possible.
Credit cards that will give you (at least!) 5% cash back
|Card||Best for||Welcome bonus||Rewards rate||Annual fee|
|Blue Cash Preferred® Card from American Express||U.S. supermarkets and U.S. streaming subscriptions||Earn a $300 statement credit after spending $3,000 on purchases in the first 6 months||6% cash back at U.S. supermarkets (for first $6,000 per year, after that 1X) and on U.S. streaming services, 3% at U.S. gas stations and on eligible transit, and 1% on other purchases||$95 (waived first year) (See rates and fees) (Terms apply)|
|Chase Freedom Flex Card||Rotating categories and travel purchases||Earn $200 cash back after spending $500 on purchases in the first 3 months, plus earn 5% cash back on grocery store purchases (not including Target or Walmart; up to $12,000 in the first year)||5% on rotating quarterly categories (on up to $1,500 spent) and travel purchased through the Chase Ultimate Rewards portal; 3% at restaurants (including takeout and delivery) and drugstores; and 1% on all other purchases||$0|
|U.S. Bank Cash+ Visa Signature Card||Selected spending categories||Earn $200 cash back after spending $1,000 in the first 120 days||5% cash back on two chosen categories (up to $2,000 quarterly), 2% cash back on one chosen everyday category, and 1% cash back on all other eligible purchases||$0|
|Citi Custom Cash Card||Flexible top spending categories||Earn $200 cash back after spending $750 on purchases in the first 3 months||5% cash back in your top eligible spending category each billing cycle (up to the first $500 spent, and then 1% cash back after that), plus unlimited 1% cash back on all other purchases||$0|
|Chase Ink Business Cash Card||Select business expenses:
Office supply stores, plus internet, cable, and phone services
|Earn $750 bonus cash back after spending $7,500 in the first 3 months||5% cash back at office supply stores and on internet, cable, or phone services (up to $25,000 combined annually); 2% cash back at gas stations and restaurants (up to $25,000 combined annually); and 1% cash back on everything else||$0|
Blue Cash Preferred Card from American Express
With the Blue Cash Preferred Card from American Express, cardmembers can earn even more than 5% cash back on specific categories. This is one of the best credit cards for buying groceries, as you can earn 6% cash back on purchases with U.S. supermarkets (on up to $6,000 per year, after that 1X) and select U.S. streaming services. If you were to spend $4,000 a year on groceries for your family, along with $200 a year in streaming services, that would net you $252 cash back. The cash back earned is given as Reward Dollars that can be redeemed as a statement credit.
Some people avoid this card because it has an annual fee of $95 (waived first year). But if you use your card strategically for groceries and 5% cashback categories you might find you have earned enough cashback to more than cover the fee. The overall reward rate is 6% cash back at U.S. supermarkets (for first $6,000 per year, after that 1X) and on U.S. streaming services, 3% at U.S. gas stations and on eligible transit, and 1% on other purchases.
If you follow the earlier example and earn $252 in cash back from your spending and then subtract the annual fee charge, you’ll still be left with $157 in cash back (in the form of statement credits). That’s nearly a 4% return on your spending, which is great. To add to the savings, this card also comes with a great welcome offer. You can earn a $300 statement credit after spending $3,000 on purchases in the first 6 months.
In addition, the Blue Cash Preferred Card from American Express is not only a great card for buying groceries, it’s also one of the best credit cards for gas.
The bottom line: If you’re spending consistently at U.S. supermarkets and pay for U.S. streaming subscriptions, this card could make a difference in your budget.
Chase Freedom Flex Card
For anyone looking to earn valuable cash back, the Chase Freedom Flex Card is a must-have for its rotating categories. With this Mastercard you can earn 5% on rotating quarterly categories (on up to $1,500 spent) and travel purchased through the Chase Ultimate Rewards portal; 3% at restaurants (including takeout and delivery) and drugstores; and 1% on all other purchases. If you make the most of the rotating categories alone, you’ll earn $75 every three months, which adds up to $300 in yearly savings.
The only catch is you’ll need to activate these spending categories each quarter. You’ll get an email alert prior to the start of the quarter, though. And activation can easily be done in your account portal. Check out the current schedule for Chase Freedom categories.
These potential savings come with an intro 0% APR (annual percentage rate) for 15 months (then 14.99% to 23.74% (variable)) on purchases and a $0 annual fee.
Also, the card comes with a generous sign-up bonus: Earn $200 cash back after spending $500 on purchases in the first 3 months, plus earn 5% cash back on grocery store purchases (not including Target or Walmart; up to $12,000 in the first year).
New cardholders also get the benefit of a 0% intro APR on purchases for the first 15 months (then 14.99% to 23.74% (variable)) after account opening. After that your purchases will be subject to the regular variable APR.
The bottom line: If your spending is more flexible or your budget tends not to be heavy in one area (like groceries or gas), the Chase Freedom Flex is a great choice to earn you significant cash back.
U.S. Bank Cash+ Visa Signature Card
U.S. Bank tends to be a bit overlooked in the credit card world, but the U.S. Bank Cash+ Visa Signature Card shouldn’t be skipped. It packs a punch with its 5% cash back on two chosen categories (up to $2,000 quarterly), 2% cash back on one chosen everyday category, and 1% cash back on all other eligible purchases. This card is similar in concept to the Chase Freedom, except you get to choose your two preferred spending categories rather than having them assigned.
The 5% quarterly categories you can choose from for 2019 are as follows:
- TV, internet, and streaming services
- Fast food
- Cell phone providers
- Department stores
- Home utilities
- Select clothing stores
- Electronic stores
- Sporting good stores
- Movie theatres
- Gyms and fitness centers
- Furniture stores
- Ground transportation
Since you can select your spending categories each quarter, using this card is a great way to strategize your purchases ahead of time. If you know you’ll be traveling and eating out during July through September (Q3), you can select those two categories to earn up to 5% cash back. If you were to maximize the spending categories at $2,000 with 5% cash back, you could earn up to a maximum of $100 cash back each quarter.
On top of the 5% categories, you can also earn unlimited 2% cash back on one of these three categories you can select from:
- Grocery stores
- Gas stations
While the 2% categories are a nice addition, they’re not the best feature of this card, in my opinion. The other cards on this list all surpass this earning rate in similar categories.
New cardholders also get the perk of a 0% intro APR on balance transfers for the first 18 billing cycles on balances transferred in the first 60 days (then 14.99% to 23.74% (variable)). You will have to pay a balance transfer fee of $5 or 3%, whichever is greater, and after the promo period ends your balance will be subject to the regular interest rate.
The bottom line: If you have larger purchases across various categories or are planning specific purchases in the categories listed above, the U.S. Bank Cash+ Visa Signature Card is the card for you.
Citi Custom Cash Card
While you might be familiar with the Citi Double Cash Card as an easy-to-use flat-rate cashback card, this newer offering from Citi is also potentially very powerful to have in your wallet.
The Citi Custom Cash is another Mastercard and it has a $0 annual fee and offers a welcome bonus offer of $200 cash back after spending $750 in the first 3 months. You also have the opportunity to earn 5% cash back in your top eligible spending category each billing cycle (up to the first $500 spent, and then 1% cash back after that), plus unlimited 1% cash back on all other purchases.
What this means is that you’ll automatically earn the maximum percentage of cash back in whichever category you’re spending the most on each month. Eligible categories include restaurants, gas stations, grocery stores, certain travel and transit purchases, certain streaming services, drugstores, home improvement stores, fitness clubs, and live entertainment.
You’re limited to earning the 5% rate on the first $500 you spend, but that spending limit still gets you at least $25 in cash back each month if you maximize your earnings.
New cardholders also get the benefit of a 0% intro APR on purchases for the first 15 months (then 13.99% to 23.99% (variable)). You also get a 0% intro APR on balance transfers for the first 15 months (then 13.99% to 23.99% (variable)).
The bottom line: The Citi Custom Cash can be helpful if you don’t want to worry about rotating categories, but your top spending category tends to change from month to month.
Chase Ink Business Cash Card
Did you know business credit cards can also be cashback cards? If you’re a small business owner looking to save on your business expenses, the Chase Ink Business Cash Card could be a great fit for you.
With the Chase Ink Business Cash Card, you’ll earn 5% cash back at office supply stores and on internet, cable, or phone services (up to $25,000 combined annually); 2% cash back at gas stations and restaurants (up to $25,000 combined annually); and 1% cash back on everything else. This card also offers 5% cash back on each dollar spent on Lyft rides.
Also, you can get earn $750 bonus cash back after spending $7,500 in the first 3 months. With this earning potential, you could easily put thousands of dollars back into the bottom line of your business.
Along with these earnings, this card will protect you during your travels with coverages such as auto rental collision damage waiver (primary coverage) and roadside assistance.
New cardholders also get the benefit of a 0% intro APR on purchases for the first 12 months (then 13.24% to 19.24% (variable)).
The bottom line: The Chase Ink Business Cash Card is excellent for a business owner looking to add hundreds of dollars to their bottom line.
Multiple cashback cards could get you 5% cash back more often
While using just one of the credit card offers listed above could save you a significant amount of money, none of them has the potential to maximize every single one of your purchases.
We all spend money in many different areas. From shopping, gas, grocery stores, eating out, and entertainment, there’s plenty of cash being spent — and cash back to be earned. Unfortunately, there’s no single credit card that will earn you at least 5% in all of these categories. However, there’s still a way to get 5% cash back more often.
If you were to use these three cash rewards credit cards simultaneously, you could easily achieve that goal of 5% cash back. Here’s an example strategy for a regular consumer that could earn you over $800 in cash back over the course of one year.
|Card name||Blue Cash Preferred Card from American Express||Citi Custom Cash Card||Chase Freedom Flex Card|
|Rewards category||6% at U.S. Supermarkets and on U.S. streaming subscriptions||5% on highest spending category||5% on rotating categories|
|Estimated yearly spending||$6,000||$6,000 ($500 each month)||$6,000 ($1,500 each quarter)||Total money spent = $18,000|
|Cash back earned||$360||$300||$300|
|Annual fee||$95 (waived first year) (Terms apply)||$0||$0|
|Net cash back earned||$265||$300||$300||Total cash back earned = $865|
While spending $1,500 quarterly on each of the rotating category cards can seem a bit daunting, you can accomplish it through planning:
- For example, Q4 is the holiday season where people tend to spend a lot of money on gifts. This is likely why Chase often has the categories for that time period set as retailers such as Amazon.com, Target, and Walmart.com. So when you’re price shopping, make sure to factor in the cashback savings you’ll get on your gifts if you shop at one of those websites.
- Similarly, if the Chase Freedom Flex Card has the category of wholesale stores set for April through June, you could plan to stock up on everyday items during that time to get the most out of your cashback potential without unnecessary spending.
If you were to adopt the multi-card strategy outlined above, you could earn $865 in cash back over one year. On your spending of $18,000, that’s a healthy return. This doesn’t even take the potential welcome bonuses of the Blue Cash Preferred and Chase Freedom Flex cards into consideration, so earnings can soar even higher.
Just be sure to never spend money just for the sake of earning cash back. To make the most of a cashback rewards program, you need to pay off your balance each month. Otherwise you’ll be paying interest charges, and that would defeat the whole purpose of saving money on your expenses.
In addition, these cards also charge a foreign transaction fee, so they wouldn't be ideal for traveling abroad. If you want to earn travel rewards, check out our list of the best travel credit cards.
What is the best credit card for 5% cash back?
The best credit card for 5% cash back depends on your lifestyle and spending habits. You typically won’t get 5% cash back on all purchases, so you have to decide which card(s) would be best for the areas where you typically spend. For example, the Amex Blue Cash Preferred is ideal for U.S. supermarket purchases, while the Chase Ink Business Cash makes sense for common business expenses.
What credit card gives the most cash back?
The card that gives the most cash back is likely the one that offers high earning potential in a category that aligns with your spending habits. For example, if you frequently spend a lot on groceries, a card like the Amex Blue Cash Preferred could be your best bet for getting the most cash back (issued in the form of statement credits). But for someone who doesn’t consistently have one area where they spend the most, a card with rotating bonus categories like the Chase Freedom Flex or Discover it Cash Back might be better.
Do cashback cards actually give you cash?
Most cashback credit cards offer multiple redemption options for your cashback rewards. This often includes redeeming your cash as statement credits or direct deposits into an eligible bank account. Some card issuers may also offer gift cards or travel options as well. The closest thing to getting actual cash would be getting a deposit into a bank account where you can make cash withdrawals.
The bottom line on these 5% cashback credit cards
The cashback hobby is a great one, as you can feel the immediate impact in your wallet. That said, there’s no “best” cashback credit card. The best cashback credit card is the one that will earn you the most for your expenses.
When deciding on your next move, consider a credit card (or cards) that reflect your lifestyle, typical expenses, and financial needs. Hopefully this article gave you some insight into which cards might be a good fit for you and how you can use multiple cashback cards together to maximize your savings.
Seriously Powerful Cashback Card
up to 5% cash back
- $200 sign-up bonus
- Up to 5% cash back on spending
- 5% cash back on grocery store purchases (up to $12k your first year)
- Lyft and DoorDash perks
- Has foreign transaction fee
- Earn $200 cash back after spending $500 on purchases in the first 3 months, plus earn 5% cash back on grocery store purchases (not including Target or Walmart; up to $12,000 in the first year)
- 5% on rotating quarterly categories (on up to $1,500 spent) and travel purchased through the Chase Ultimate Rewards portal; 3% at restaurants (including takeout and delivery) and drugstores; and 1% on all other purchases
- Intro purchase 0% offer: 0% for 15 months then 14.99% to 23.74% (variable)