Expired: 2016 Quarterly 5x Cashback Categories on Credit Cards: Summary

Some credit cards offer not only the standard 1% cashback on everyday spending, but also rotating quarterly 5x cashback categories, which means 1% x 5 = 5% cashback. Using the right bonus-category card for the right type of purchase can help you maximize your savings. And if you get a little creative, these quarterly bonus categories can even be extended to cover many more types of spending. Today, we’ll summarize the credit cards that offer quarterly 5x cashback, their corresponding categories, and how to make the most of these 5x rewards.

【Updated 2016/9/15】Freedom has announced its Q4 5x cashback categories: Drug Store, Department Store, and Wholesale Club. Activation has started: activation link. Drugstores such as CVS sell Visa gift cards, PayPal mycash, Amazon, and eBay gift cards, so it’s very easy to max out the category.

【Updated 2016/9/4】Discover has announced its Q4 5% cashback categories: Amazon, Department Store, and Sam's Club. You can activate now: registration link

1. 2016 Quarterly 5x Cashback Summary

This mainly covers the three most common credit cards: Chase Freedom, Discover it, and Citi Dividend.

Chase Freedom

• Q1: Includes gas and public transit such as the subway, but does not include parking, tolls, or Amtrak. Activate by 3/14.
• Q2: Includes most U.S. Chinese supermarkets, but excludes Walmart and Target. Also includes wholesale clubs (Sams, BJs, Costco), as well as purchases on their websites. Activation starts on 3/15.
• Q3: Dining, including all kinds of restaurants, and also includes wholesale club. Activation starts on 6/15.
• Q4: Drug Store, Department Store, wholesale club. Activation starts on 9/15.
• Quarterly 5x activation link: Chase Freedom official website
• Latest activation deadline: Activate by the 14th of the last month of each quarter, and all eligible purchases made earlier in that quarter will still earn 5x.
• 5x cashback cap: 5x on the first $1,500 each quarter, then 1x after that.
• When rewards post: After each statement closes.
• Card review:【Limited-Time 17,500 Sign-Up Bonus】 Chase Freedom
• Pros: No annual fee. The 5x is actually earned as UR points. If you also have a premium Chase card, those points can be transferred to airline miles and hotel points, and can be redeemed at a value of about 1.6 cents each. That means quarterly 5x UR can be worth roughly 8% cashback.

Discover it

• Q1: Includes gas, car rentals, and rail travel. Activate by 3/31.
• Q2: Includes all kinds of restaurants, including Chinese restaurants. Activate by 6/30.
• Q3: Amazon and stores such as Home Depot. Activate by 9/30.
• Q4 (partially announced): Amazon, Department Store, Sam's Club. Activate by 12/31.
• Quarterly 5x activation link: Activate by logging into your Discover account, or sign in here: activation link
• Latest activation deadline: You only start earning 5% cashback after activation
• 5x cashback cap: 5% on the first $1,500 each quarter, then 1% after that.
• When rewards post: After each statement closes.
• Card review: 【$100 Bonus, Cashback Match】 Discover IT
• Pros: No annual fee. For newly approved cardholders, the 5% quarterly cashback is also doubled, which effectively makes it 10% quarterly cashback.

Citi Dividend

• Q1: Includes furniture stores (IKEA) and home goods stores (BedbathBeyond). Activate by 3/31.
• Q2: Includes drugstores such as CVS, Walgreen, and Rita Aid. Activate by 6/30.
• Q3: Hilton and car rentals. Activate by 9/30.
• Q4: Best Buy and department stores. Activate by 12/31.
• Quarterly 5x activation link: Citi official activation link
• Latest activation deadline: You only start earning 5% cashback after activation
• 5x cashback cap: Total annual cashback is capped at $300, then 1% after that.
• When rewards post: After each statement closes.
• Card review:Citi Dividend (no longer available for direct application, but can still be obtained via product change)
• Pros: No annual fee. There is no quarterly cap by category, so if a certain quarter has especially useful 5% categories, you can knock out the full annual $300 very quickly.

How to Best Use These Quarterly 5x Categories

For ordinary credit card users

For most everyday card users, it’s enough to know the 5x categories and carry the right card during the right quarter. If you’re a new Discover user, using Discover for gas in Q1 is better than Chase because with Cashback Match, gas effectively earns 10% cashback. In Q2, use Discover for dining, Freedom for groceries, and Dividend for drugstore purchases. In Q3, use Freedom for dining. In Q4, these cards are all tied to holiday shopping, so just make good use of them.

For advanced credit card users

Because quarterly 5x categories only apply during a specific quarter, even if you have all of the cards above, you still can’t cover all your spending year-round, such as gas and groceries. That’s where category shifting comes in, allowing you to effectively earn 5% cashback on other categories. For example, when Chase Freedom earns 5x at grocery stores in Q2, you can buy gas gift cards and save them for later quarters, effectively earning 5x on gas for the rest of the year. Citi Dividend in Q3 works the same way: drugstores also sell many third-party gift cards, such as Amazon and eBay. In Q4, department stores like Sears also sell many third-party gift cards, and so does Best Buy. Use gift cards as a bridge to earn 5% cashback on all your spending! For a more detailed discussion, see:

• Credit Card Strategy — Category Shifting

For MS users

• Gas stations: 711 may carry Vanilla cards, and the in-store merchant code may still code as gas station.
• Drugstores (CVS,walgreen): PayPal my cash and various Vanilla cards
• Sears, Bedbathbeyond, Best Buy: 200Visa gift cards with PIN

For Dividend, drugstores are the best choice because the fee is 1%. Gas stations are more YMMV, since many places do not have high-denomination Vanilla cards. For first-year Discover and Chase Freedom, it can still be worth buying $200 cards if you have a real need for them.