No Annual Fee Credit Card With 5% Cash Back on Major Categories

Are you looking to get a 5% cash back or close to it on all your credit card purchases? But don’t want to spend a dime on an annual fee, then this guide is for you.

Is such a thing even possible? Yes and no, depending on how you value it.

In this post, I will cover credit cards with no annual fees that offer 5% cash back or points on the categories that an average American spends on.

To start, I have set some ground rules for research because there are already so many articles related to 5% cash back credit cards.

Ground Rules:

• Will not recommend any alternate cards that have an annual fee.
• Will not mention the original Chase Freedom card, as Chase stopped issuing this card.
• Bank of America Preferred Rewards won’t be considered as it requires lump sum cash or investment.
• Must have at least 3% cash back for categories that do not offer 5%.
• Excluding mortgage or rent payment from the category, most people cannot pay that with a credit card.

Overview/Summary

Citi Custom Cash is your wild card and must-have, as it offers 5% cash back on your highest eligible spend category each billing cycle. Therefore, you would want to use it for the most spent category every month or a specific category that your other credit cards won’t provide cash back, such as drug stores, home improvement and so on.

You are guaranteed a 5% return on two categories if you run a two-player setup, which is great. In addition, this is the only card that offers transfer partner benefits in this setup.

Most people are not remodeling their homes every month. That’s why I did not include the home improvement category on my table. If you anticipate a small home improvement project, you can put that spend on Citi Custom Cash for that month and get the 5x ThankYou Points.

U.S. Bank Cash+ is the backbone of this setup as it covers versatile categories such as home utilities, department stores, ground transportation, and more.

Dinning

Unless you utilize Citi Custom Cash here, it’s not that easy to find a no annual fee card with a 5% bonus on dining. You should use Discover IT on the month that it offers a 5% bonus for dining. Also, it matches all your spending in the first year bonus, you should take advantage of that.

Nusenda Platinum Cash Rewards Credit Card is another card that comes with rotating categories that give 5% cash back (Apr-Jun) on restaurant spending. You do have to be a credit union member to apply for the card. Detail on how to become a member is here.

U.S. Bank Altitude Go should be on your radar if you don’t want to switch your wallet every time you go out for dinner. Aside from 4% dining, it gives you a $15 streaming service credit after 11 months of streaming purchases and comes with a $200 signup bonus.

Gas

Like dining, the PNC Cash Rewards credit card is a good alternative if you don’t like the rotating categories set up. Pair this card with a gas cash back app like GetUpside, and you will easily net a 5%-7% bonus on your next gas fill-up.

Grocery

I have designated Citi Custom Cash as a grocery card because most people will easily hit $500 in grocery spending every quarter.

Suppose you already used Citi Custom Cash for the gas or dining category. In that case, you can look into Capital One SavorOne, which gives 3% cash back unlimited 3% cash back on groceries, dining, entertainment & popular streaming services.

Travel (Airfare/Hotel)

You can use either portal for the travel category based on your preferences. You get 1 cent per point redemption.

Don’t use CFF or Cash+ if you are traveling abroad, as they both have a foreign transaction fee. This is where Altitude Go comes in handy as it charges no annual fee.

To maximize your points, you can always use Citi ThankYou Points to book your travel. However, the bonus is capped to $25 each billing cycle, which is the shortcoming of the Citi Custom Cash Card.

Utilities

U.S. Bank Cash+ shines in the category as it’s the only card that provides 5% cash back among other categories. Ever since I got this card, I switched over all my utility bills to the card.

Things to consider:

• If you want to stick to one card issuer, U.S. Bank Cash+ and Altitude Go is a good combo without missing too much. Although they are not the easiest credit card issuer to approve for a new account, establishing a bank account or investing account prior is a strategy you should look into.
•  You can combine just two issuers to cover more categories, such as :
  • U.S. Bank + Citi Custom Cash (This is the best two issuers set up as categories are interchangeable)
  • U.S. Bank + PNC Cash Rewards
  • Citi Custom Cash + Cash Freedom Flex

Some notable benefits of the cards that are worth mentioning that I think people will actually use:

• • Chase Freedom Flex is a World Elite Mastercard that offers cell phone protection with up to $1,000 in yearly coverage and free one year ShopRunner membership. Details »
  • U.S. Bank Altitude Go no foreign transaction fee,  a $15 credit for annual streaming service purchases like Netflix, Apple TV+, Spotify and more, extended warranty protection, auto rental collision damage waiver and many other Visa signature card benefits.
  • Nusenda Platinum Cash Reward comes with price protection, extended warranty, and other Visa Signature card benefits.

Final Thoughts

You don’t need to go ahead and sign up for all the cards mentioned here, but you can customize it based on your spending.

Between my wife and me, we have: Citi Custom Cash, U.S. Bank Cash+, U.S. Bank Altitude Go, Chase Freedom Flex, and Discover IT. We use all of these cards regularly on various items. Using cash back portal and offers, sometimes we can get more than 5% cash back.