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If you’re looking for the highest possible return on credit card spend, you’ll need to include rewards cards with rotating bonus categories in your points and miles strategy. These cash back cards are not the best option for everyday spending, typically earning just 1% back on non-bonus expenditure. But, if a purchase falls under the listed bonus categories, you can receive as much as 10% back on every dollar just by swiping the right card!
Increased Returns on Bonus Category Spending
The cards listed below don’t all offer rotating bonus categories in the traditional sense, but each card features a unique rewards structure that can yield supersized value:
When used as a stand-alone rewards card, the Freedom Card earns 5% cash back on quarterly revolving bonus categories, on up to $1,500 in combined purchases per quarter. Any purchase outside of bonus categories or in excess of the $1,500 quarterly cap earns a flat rate of just 1%. What makes the card so unique?
The Freedom Card accrues rewards worth 1¢ per piece called Cash Back Rewards, spend $1 in a bonus category, and you earn 5x Cash Back Rewards points. If you’re using the Freedom Card as a self-contained rewards card, you can redeem those 5x points as 5¢ cash back. If, on the other hand, you hold either the Chase Sapphire Reserve®, Chase Sapphire Preferred® Card, or the Ink Business Preferred℠ Credit Card, you can redeem points for a much better value. Cardholders can combine the Cash Back Rewards earned on the Freedom Card, with Ultimate Rewards points from the three UR cards above, and redeem for a higher fixed-value through the Chase Travel Portal or transfer to travel partners for potentially much higher returns.
For example, if you max out the bonus categories each quarter, you’d net 30,000 points per year. If you were to redeem those points as cash back, you would receive just $300. If you transferred them to your Sapphire Reserve, you could redeem those points for a minimum 1.5¢ per point through the Chase Travel Portal for at least $450 in value. And that’s without factoring in that you can transfer those points to travel partners for substantially higher returns.
The rewards structure for the Discover it® Card is very similar to that of the Freedom Card, but with a first-year feature offering monster value. You’ll earn 5% cash back on quarterly rotating bonus categories on up to $1,500 per quarter, with all non-bonus purchases making just 1%. The killer feature of the Discover it is called Cashback Match. Discover will match all the cash back you earn in the first year, whether it comes from the 1% or 5% categories! If you max out the $1,500 spend each quarter you’ll receive $75 cash back or $300 per year. With Cashback Match, Discover doubles that amount to $600, or 10% of your bonus category spending.
The U.S. Bank Cash+ Visa operates differently from the two cards above, allowing you to choose two 5% categories and one 2% category, on up to $2,000 per quarter. All other purchases outside of bonus categories earn just 1%. The ability to choose your bonus categories provides a ton of flexibility. If you're already making 5% back on Freedom Card for grocery stores, you can select another category such as cell phones or car rentals to ensure you receive the highest possible return on the maximum number of categories. Why earn just 2% cash back when you could be making 5%?
The Huntington Voice Card is almost a hybrid mix of the three cards above. The card allows you to earn 3x points per dollar spent, on the first $2,000 each quarter, and you can choose from 10x different categories. The twist is that you can change the nominated category each quarter if you need to optimize your spending. While 3x points (each point is worth 1¢) isn’t as lucrative a return as the 5% offered on the cards above, you’re still receiving a 3% minimum return on spending which may not otherwise fall within a bonus category.
Register to Ensure Bonus Points are Awarded
One of the only catches to revolving bonus categories featured on these cards is that you’ll need to register for each one for the bonus points to be awarded. If you fail to register your bonus categories on any of these cards, the purchases will only code as 1%. You’ll also need to keep an eye on how much you spend each quarter on each card, recording every dollar in and out to ensure you don’t exceed the $1,500 and $2,000 spending limits.
- Register Chase Freedom bonus categories
- Register Discover Card bonus categories
- Register US Bank Cash+ bonus categories
- Register Huttington Voice bonus categories
Cards that feature rotating bonus categories can supercharge your ability to earn points and miles, and form an essential part of any rewards strategy that aims to maximize the return on everyday spending. Both the Freedom Card and the Discover it cards offer king-sized value, providing returns as high as 10% on every dollar spent in bonus categories. If we were pushed to name a ‘best in class’ card, we’d have to give first prize to the Freedom Card card. Why? The ability to combine points earned on the Freedom Card with Ultimate Rewards points from cards like the Sapphire Reserve and Sapphire Preferred, and redeem them through the Chase Travel Portal or transfer to travel partners provides unrivaled flexibility and the potential for monster returns.
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