When it comes to cash-back credit cards, which is better: Flat rate or bonus categories?

CNBC

11-06-2025

Cash-back credit cards have long been a popular go-to rewards card for many cardholders — and for good reason. You can simply make money off of those everyday purchases you'd make anyways. That money can then be used to pay off your credit card bill, as one redemption example.
How much cash back you can earn depends on the credit card and its cash-back rate. Some cards offer a flat-rate cash back, say 2%, on all purchases no matter what they are. Others offer a higher cash-back rate, say 5%, but only on purchases in certain spending categories.
Here's how to know which is better for you.
With a flat-rate cash-back credit card, you earn a fixed rewards rate on all eligible purchases. For newbies to the credit card rewards game, these credit cards can make for a simple and easy way to start out.
Flat-rate cards typically don't carry an annual fee, in exchange for their benefits being less impactful. While the exact rate will vary by card, some of the best flat-rate cash-back cards offer 2% cash back on purchases, so a purchase of $100 will earn you $2 in rewards.
Flat-rate cards are a good option if you want to stick to one credit card for most of your purchases, and you'd rather not mess around with points or miles.
One of the most popular flat-rate cash-back cards available is the Citi Double Cash® Card, which offers an unlimited flat 2% cash back on all your purchases: 1% when you make a purchase and 1% when you pay your bill. The card doesn't have any category restrictions, nor does it require enrollment, so you'll be earning with every purchase. The Double Cash Card also comes with an introductory 0% APR period and has no annual fee.
On Citi's site
On Citi's site
Receive a 0% intro APR for 18 months on balance transfers.
Fair to Excellent580–850
18.24% - 28.24% variable
$0
Earn $200 cash back
See rates and fees, terms apply.
Read our Citi Double Cash® Card review.
The Citi Double Cash® Card is one of the best no-annual-fee cash-back cards thanks to its straightforward rewards structure.There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. A balance transfer fee of 5% of each transfer ($5 minimum) applies if completed after 4 months of account opening.
3%
The Wells Fargo Active Cash® Card also offers 2% cash rewards on all purchases and zero annual fee. The Active Cash Card comes with a 12 month 0% intro APR period on purchases and qualifying balance transfers (after 19.24%, 24.24%, or 29.24% Variable APR), plus a few additional perks like access to the Visa Concierge® Service and cell phone protection.
On Wells Fargo's site
On Wells Fargo's site
Good to Excellent670–850
19.24%, 24.24%, or 29.24% Variable APR
$0
Earn a $200 cash rewards bonus
See rates and fees. Terms apply.
The Wells Fargo Active Cash® Card is great if you want simplicity thanks to its flat-rate 2% unlimited cash rewards on purchases and $0 annual fee.Intro balance transfer fee of 3% for 120 days from account opening, then up to 5%, min: $5
3%
Using a flat-rate card means you don't have to track changing bonus categories or worry about using a specific card for a purchase. You can check out our comparison of these two cards for a more in-depth look.
Find the best credit card for you by reviewing offers in our credit card marketplace or get personalized offers via CardMatch™.
Bonus categories offer a higher rewards rate, usually 5%, for spending in specific categories, like grocery stores and online shopping. The bonus categories will either rotate every quarter or be fixed categories that don't change. Both of these options typically have a maximum amount of cash back you can earn in your categories, then the card earns 1% after you've hit the threshold.
Credit cards offering bonus categories allow you to earn more rewards than flat-rate cash-back cards, but only if you spend efficiently, and maybe get a little lucky with your categories. The Chase Freedom Flex® earns you 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate, then 1%. The categories rotate each quarter based on the current Chase Freedom cash-back calendar and are typically announced a few weeks before the new quarter. You'll also get 3% cash back on dining at restaurants, including takeout and eligible delivery services, and 1% on all other purchases.
New cardholders receive a 0% intro APR for 15 months from account opening on purchases and balance transfers.
Good to Excellent670–850
18.99% - 28.49% variable
$0
Earn a $200 Bonus
Member FDIC. Terms apply. Information about the Chase Freedom Flex® has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.
Read our Chase Freedom Flex® review.
The Chase Freedom Flex® is an excellent cash-back card for maximizing your spending in a variety of categories.
Intro fee of either $5 or 3% of the amount of each transfer, whichever is greater, on transfers made within 60 days of account opening. After that, either $5 or 5% of the amount of each transfer, whichever is greater.
3%
Prefer a card with bonus categories that don't rotate? The Blue Cash Preferred® Card from American Express offers 6% cash back on groceries at U.S. supermarkets (up to $6,000 per year), 6% cash back on select streaming services, 3% on transit, 3% on gas and 1% on everything else. These categories are fixed and won't rotate, so you can plan your spending without worrying about them ever changing.
On the American Express site
On the American Express site
Good to Excellent670–850
20.24%-29.24% Variable
$0 intro annual fee for the first year, then $95.
Earn a $250 statement credit
See rates and fees, terms apply. Read our Blue Cash Preferred® Card from American Express review.
The Blue Cash Preferred® Card from American Express is a low-fee card with generous cash-back rewards and useful ongoing benefits, such as a monthly Disney Bundle credit. (Enrollment required for select benefits mentioned)Either $5 or 3% of the amount of each transfer, whichever is greater.
2.7% of each transaction after conversion to US dollars
While many bonus category cards have the ability to out earn flat-rate cash-back cards, it will depend on your spending habits. Make sure to shop around to find a bonus category card that fits your lifestyle instead of just going for the highest return.
Both flat-rate cards and bonus category cards can work well, but it comes down to how you want to spend. If you're curious, it might be helpful to do the math on some mock purchases, so you can see how your rewards change.
Another popular solution is to have both types of cards as they can pair together quite well. You can earn your elevated rewards in your bonus categories, and for purchases that don't fall into one of those, you can use your flat-rate card to likely earn higher than the 1% you might have otherwise.
Either type of card can help you get the most out of your spending, but you have to be aware of how you spend your money so you can pick the best card to match.
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