Are rotating cash back credit cards worth it?

Credit Cards
1

Hi Clark Community!

We talk a lot about getting a 2% cash back credit card for your everyday purchases at Clark.com, but today I wanted to ask you all about one of the “next step” credit card options.

I recently wrote an article about getting 3% back or more on certain types of purchases with no annual fee credit cards. These can be a great “tandem” card to have alongside your 2% back card to earn even more rewards.

But one option I didn’t really cover in that article is Rotating Cash Back Credit Cards.

Many people are attracted to the rotating cash back from cards like the Chase Freedom Flex or Discover It Cash Back card.

Both of these offer 5% cash back with no annual fee. But the catch is that the spending categories for your 5% back rotate every quarter, and there’s a $1500 spending cap.

But even with the cap, you could max out the rewards at $75 per quarter. And, over the course of the year, that could be worth up to $300 in rewards on $6,000 in spending. That’s not bad for a no annual fee card.

Of course, the downside is that these cards also can be a little one dimensional.

If you don’t have a need for the 5% category that rotates in a particular quarter, it may be mostly dormant in your wallet for three months.

And then there’s the whole annoyance of having to remember which card is offering which rewards during which quarter. And when do those quarters start and end?!

I happen to have both of these credit cards and I’d say I use them fairly often.

For example, right now I’m able to get 5% back at Walmart with the Discover card. That’s really useful. And last quarter I used the Freedom Flex’s 5% back for dining all the time!

What about you? Do you have these cards? Would you say they’re worth having around? Or does their constant moving target make them an annoyance in your life?

I’d love to hear where the Clark community stands on these.

Nick

2

Happy Monday

I have 3 no annual fee credit cards.

Citi for the 2% on most repurchases (including some utilities and insurance);
AmEx for Cell service (5%) and gas (3%)
CapOne (1 1/2%) for Costco (but not a Costco card) and for foreign travel without transaction fees.

That works for me because I’m getting good rewards and its simple. Maybe a Costco CC someday.

I think if someone wants to use a rotating reward card, it makes good sense but I’ve decided to trade off a little extra $'s to keep it simple.

3

that’s only $100 more than using a 2% card all the
time. Is it really worth the fuss for $100?

3 Likes
4

Yes, that would be annoying for saving a few cents more. I think you need to look at where you spend most of your money and get a card that offers a good cash back in that category. The Costco VISA is perfect for me because I spend a large percentage of my money at Costco and on gas, travel and restaurants which the card offers good cash back on those categories without having to keep track of them. Then I have a Citi 2% back for everything else.

5

I find the rotating 5% ones to be annoying and sometimes problematical. I can almost remember but ADHD wife has more trouble remembering what to use this quarter. Accumulating points can sometimes get “gift” card scrip at a discount which I like.

One example problem from several months ago: Category Public Transit. So I booked a ride on Alaska Bus, but it rang up Travel, not Transit. WTF is the difference? So be that way your card is in the drawer!

6

Not worth it.

I have Citi and Citi Costco. I don’t have time to play their marketing games. I don’t travel, and frankly, I can cook better than most restaurants. My wife is even a better cook. I’ll be damned if I go to downtown atlanta for a concert, and the major sports people are so over priced, I wonder how people justify it.

7

I have two VISA, one Discover and one Amex card. I have a piece of paper in my wallet the size of my drivers license in the window next to my cards. I have the catogories printed in ink but the dates, card to use and percent cash back in pencil. At the end of each Quarter I just enter the new dates, card and percent. Simple!

8

I have the Chase Freedom card, and I keep it for longevity on my credit report…which weirdly says my oldest card is 23 years, but I don’t have that one anymore. Hmm. Anyway, with rotating categories, I find that 2 out of 4 quarters are very useful (Amazon, Walmart, warehouse clubs, home improvement stores, Paypal - love that one!) and I max them out, 1 is somewhat useful, and usually 1 is a total dud. Like the current one.

For those who hate keeping track, I recommend using a label maker or some other easily removable sticker. Wrapping it in a post-it note or similar might work for you as well. My mom has the Freedom Flex and a label maker, it works for her :slight_smile: