In addition to 5% rewards rates and annual fees, we take into account approval requirements and the type of cardholder each offer is intended for. In the interest of not excluding cards with great terms unnecessarily, we do not automatically rule out cards offering rewards in the form of points or miles. Rather, we factor the cash value and ease of conversion into our final selection of the best 5% credit cards, alongside other relevant WalletHub Rating components. We also update our picks whenever new offers come about or existing offers change substantially.
WalletHub's Key Rating Components
Two-Year Cost: 38% – We estimate the bottom line impact of using a 5% cash back card over two years, taking into account annual fees, rewards, and any other card benefits that offset costs. Negative values in this category indicate cardholder savings.
Rewards: 29% – We assess each card’s cash back program, focusing on bonus categories, earning limits, activation requirements, and how simple it is to redeem rewards.
Editor’s Rating: 12% – WalletHub editors evaluate each card based on its rewards potential, fees, and overall usability, as well as how it compares to other cash back cards with high earning rates.
Fees: 11% – We review all associated charges, including annual fees, foreign transaction fees, and any other costs that could reduce a cardholder’s net value.
User Reviews: 7% – We factor in cardholder feedback to gauge satisfaction with earnings, redemption ease, customer service quality, and the overall experience of using the card.
Other Features: 3% – We consider extra benefits that add value for the cardholder, such as sign-up bonuses, secondary bonus rewards categories, discount offers, and purchase protections.
How Two-Year Cost Is CalculatedTwo-year cost is used to approximate the monetary value of cards for better comparison and is calculated by combining annual and monthly membership fees over two years, adding any one-time fees or other fees (like balance transfer fees), adding any interest costs, and subtracting rewards. Negative amounts indicate savings. When fees or other terms are presented as a range, we use the midpoint for scoring purposes.
Rewards bonuses and credits have been taken into account for two-year cost calculations. However, bonuses applicable to only a very small portion of cardholders are not considered. For example, credits and bonuses awarded for spending or redeeming rewards through a company portal with non-co-branded cards have not been taken into account. Similarly, bonuses and credits related to spending with specific merchants using a non-co-branded card have not been taken into account (for example, if Card A offers credits with DoorDash, this feature would not be factored into calculations because it is hard to assess how many cardholders would use the benefit or exactly how much value they'd get from it).
Cardholder Spending Profiles
Given that different users have different goals and are likely to use their credit cards differently, we identified spending profiles that are representative of the most common financial priorities and behaviors. For each cardholder type, we have assumed a specific amount of monthly spending by purchase type (e.g., groceries, gas, etc.), as well as an average balance, balance transfer amount, amount spent on large purchases and average monthly payment. Spending assumptions are based on Bureau of Labor Statistics data for consumers and PEX data for businesses.
