Credit Card Spending Caps Explained: How Bonus Category Limits Affect Your Real Rewards
Many cards advertise "3% on groceries" or "5% on rotating categories," but cap the bonus after a certain spending threshold. After you hit the cap, you earn 1% on everything else. This means your effective annual rate in that category can be much lower than advertised.
What Are Spending Caps?
Example: The Amex Blue Cash Everyday advertises 3% on groceries. But the bonus only applies to the first $6,000 in grocery spending per year. After that, you earn 1%. If you spend $9,000/year on groceries ($750/month):
First $6,000 x 3% = $180
Next $3,000 x 1% = $30
Total: $210 on $9,000 = 2.33% effective rate (not 3%)
Cap Impact Calculator
Enter your monthly spending in a bonus category to see your real effective rate and when you hit the cap.
Actual Annual Rewards
$180
vs $180 if no cap
Effective Annual Rate
3.00%
Advertised: 3%
Cap Hit Month
Month 12
Earning 1% for 0 months after
Card-by-Card Cap Breakdown
| Card | Bonus Rate | Cap | After Cap | Cap Hit Month ($500/mo) |
|---|---|---|---|---|
| Amex Blue Cash Everyday | 3% grocery | $6,000/yr | 1% | Month 12 at $500/mo |
| Amex Blue Cash Everyday | 3% gas | $6,000/yr | 1% | Never at $200/mo |
| Discover it Cash Back | 5% rotating | $1,500/qtr | 1% | Month 3 at $500/mo |
| Citi Custom Cash | 5% top category | $500/mo | 1% | Immediately |
| Chase Freedom Flex | 5% rotating | $1,500/qtr | 1% | Month 3 at $500/mo |
| BoA Customized Cash | 3% chosen | $2,500/qtr | 1% | Never at $500/mo |
| Wells Fargo Active Cash | 2% all | None | 2% | Never |
| Citi Double Cash | 2% all | None | 2% | Never |
Effective Annual Rate by Monthly Spend
Pre-calculated effective rates at different monthly spending levels. The advertised rate only holds if you stay under the cap.
| Monthly Spend | BCE (3%, $6K cap) | Discover it (5%, $1.5K/qtr) | Custom Cash (5%, $500/mo) | Active Cash (2%, no cap) | Double Cash (2%, no cap) |
|---|---|---|---|---|---|
| $200/mo | 3.00% | 5.00% | 5.00% | 2.00% | 2.00% |
| $400/mo | 3.00% | 5.00% | 3.00% | 2.00% | 2.00% |
| $600/mo | 2.67% | 3.67% | 2.33% | 2.00% | 2.00% |
| $800/mo | 2.25% | 2.88% | 2.00% | 2.00% | 2.00% |
| $1,000/mo | 2.00% | 2.40% | 1.80% | 2.00% | 2.00% |
Strategy: Pair a Capped Card With an Uncapped Card
The optimal strategy for heavy spenders: use the capped card until you hit the bonus threshold, then switch to a flat-rate uncapped card for the rest of the year.
Example: Groceries at $750/month ($9,000/year)
Jan-Aug: Use Blue Cash Everyday (3% on first $6,000) = $180
Sep-Dec: Switch to Wells Fargo Active Cash (2% on remaining $3,000) = $60
Total: $240 (2.67% effective)
vs $210 (2.33%) if you stayed on BCE all year, or $180 (2.00%) on Active Cash alone
This strategy works best with the Capital One Savor (3% dining/grocery, no cap) as the uncapped card and the BCE (3% grocery, $6K cap) or Discover it (5% rotating, $1,500/quarter cap) as the capped card. Check out our card stacking guide at bestnoannualfeecreditcard.com ↗ for more combinations.