In an effort to attract new customers and retain existing ones, some credit cards offer bonus rewards for spending money in certain categories at certain times. Many of these cards change the categories quarterly, so what gets you extra points in January, February and March won't get you anything special come April. But, if you're willing to put in the extra effort to keep track of which cards to use and when to use them, it can put some extra cash in your pocket.
Rotating Category Function
Credit cards set up a schedule for which types of purchases get you extra cash back. For example, your credit card might regularly give you 1 percent cash back on all purchases, but give you 5 percent cash back when you shop at grocery stores. Often, the credit cards use broad categories for the rewards, such as gas stations, restaurants, movie theaters or home improvement. Other times, the rewards might be tied to a particular store or website, so anything you purchase from that retailer qualifies for the bonus.
Some credit cards put limits on the amount of bonus rewards you can earn for spending money in the rotating categories. For example, as of late 2013, one major card limited the bonus as applicable to just the first $1,500 spent in the rotating categories each quarter. For example, say the bonus categories are gas and restaurants. If you spend $700 at gas stations and $800 at restaurants during those the three months, you'll earn $75 cash back on those purchases. But, if you were to spend another $500 at restaurants, you wouldn't earn the special 5 percent back -- just your ordinary rewards -- because you're over the limit.
Before you start swiping your card to spend in the rotating categories, make sure you've met any activation requirements. Some cards require you to sign up for the bonus before you're eligible for any extra rewards. If you don't sign up before you spend, those purchases will be treated as if they weren't in the rotating category. For example, if the bonus for gas stations starts on January 1, but you don't sign up until January 15, any gas station swipes before January 15 wouldn't count toward the bonus. Staying on your toes about activation dates means you won't have to let any of those bonus points go to waste.
Multiple credit card companies offer cards with rotating categories, including Chase, Discover and Citi. Having multiple cards allows you to put different purchases on different cards to max out your rewards. Of course, it's bound to happen that some of the categories will overlap from time to time, but many times you can get extra cash back with one card at gas stations while another will save you extra at the grocery store.
- Discover: 5 Percent Cashback Bonus Calendar
- Chase: Freedom Card
- U.S. Bank. "U.S. Bank Cash+ Visa Signature Card." Accessed July 17, 2020.
- U.S. Bank. "Cash+ Categories July–September 2020." Accessed July 17, 2020.
- Bureau of Labor Statistics. "Consumer Expenditures—2018." Accessed July 17, 2020.
- U.S. Bank. "Sample Merchants." Accessed July 17, 2020.
- U.S. Bank. "Program Rules U.S. Bank Cash+ Program." Accessed July 17, 2020.
- U.S. Bank. "U.S. Bank Cash + Visa Card Benefits and Rewards." Accessed July 17, 2020.
- J.D. Power. "Credit Card Rewards War Reaches Inflection Point as Competition Grows, J.D. Power Finds." Accessed July 17, 2020.
- U.S. Bank. "U.S. Bank Cash+ Visa Signature Card Terms and Conditions." July 17, 2020.
Based in the Kansas City area, Mike specializes in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."