Rotating credit card bonus categories: A quick guide

Quick insights

• Rewards credit cards can give you the opportunity to earn rewards or cash back for spending you’re already doing.
• Rotating bonus credit cards can offer bonus rewards-earning opportunities in categories that change over time.
• By keeping track of your rotating bonus categories and planning your spending, you may be able to maximize your earning potential.

From travel credit cards to cobranded cards offered by some of your favorite retailers, many issuers offer a variety of rewards cards. After learning about their fees and benefits, you may be able to find one or more that meet your interests.

Types of rewards credit cards

There are two primary types of rewards credit cards: set-rate cards and rotating bonus cards.

Set-rate cards

One common type of rewards credit card is a set-rate card (sometimes referred to as a flat-rate card). As the name suggests, these cards typically offer a set rate of rewards earning that does not change over time. In some cases, these cards have a single earning rate for all purchases (which is typically when they’re referred to as a flat-rate card), but other set-rate cards offer accelerated earn rates for certain purchase categories. For instance, your card might offer a constant 3% cash back earning rate at gas stations and grocery stores and a 1% cash back earning rate on every other purchase. This contrasts with rotating bonus category credit cards, which change their bonus earning categories after a set period of time.

Rotating bonus cards

Rotating bonus credit cards offer a dynamic approach to earning rewards. These cards typically feature higher rewards rates in specific categories, such as grocery stores, gas stations or dining. These credit card spending categories change, or rotate, over time, usually every quarter. For example, a card might offer 5% cash back at grocery stores in one quarter and then switch to offering 5% cash back at gas stations the next quarter. Sometimes the categories can be chosen by card members, while other lenders choose the categories for consumer.

Card members are usually required to activate these bonus categories on their app or credit card website to earn the increased rewards. This type of card might be ideal for those who are willing to keep track of the changing categories and tailor their spending to earn rewards at the higher rates.

Examples of rotating bonus categories

Credit card spending categories are the different types of purchases that can earn rewards. Common rotating categories include grocery stores, gas stations, dining, travel, and entertainment. The specific categories and the rewards rate for each can vary by month, card and lender. For example, a credit card may have a rotating bonus category that offers 5% back at grocery stores in the first quarter of the year, then in the second quarter of the year rotates to 5% back at restaurants.

Activation of bonus categories

Activation of bonus categories is typically done through the credit card issuer's website or app. Once activated, card members can earn bonus rewards on purchases made, usually up to a certain amount, in the specified categories until the end of the designated time period.

Limitations and caps

Most credit cards with rotating bonus categories have a cap on the amount of bonus rewards you can earn each quarter. Typically, this cap is between $1,500 and $2,000. Once you reach this cap, you typically earn the card's standard rewards rate on purchases in the bonus categories until both the spending limit and bonus category reset at the end of the quarter (or other time period).

Maximizing credit card bonus categories

You may be able to maximize your rewards earnings in credit card bonus categories. We’ll explore a few of them below:

Plan your spending

By planning your spending around the bonus categories, you could earn more rewards. For example, if the bonus category for the quarter is grocery store purchases, you could try to plan ahead and do as much of your grocery shopping as possible during this time. Or, if the rotating category offers bonus rewards on cell phone plan payments, you may be able to prepay your upcoming bills so you can earn as many rewards as possible.

Multiple cards

If you have multiple credit cards with rotating bonus categories, you can pick and choose the cards that offer the highest rewards rate for each purchase. For instance, you can use the card that's earning 5% cash back at grocery stores for all grocery purchases and another card that's earning 5% cash back at restaurants on all your dining expenses.

Take advantage of online shopping portals

Many credit card issuers offer online shopping portals that can help you earn additional rewards on your purchases. For instance, your card might partner with a department store chain that offers a 5% bonus by clicking through the portal during the same quarter that your 5% rotating bonus category is department stores.

Bottom line

Credit cards with rotating bonus categories can allow you to earn additional rewards on specific categories that change over time, making them an exciting option for some consumers. If you pay attention to the bonus categories as they change, activate them as early as possible and plan your spending accordingly, rotating bonus cards could allow you to earn bonus rewards on the spending you would have done anyway.