It looks like most 5% cash back cards have a hard limit ($1500/quarter seems to be common limit) to the amount you can get back and offer an "unlimited" cash back at a rate at or lower than 2%.

https://www.magnifymoney.com/blog/best-of/10-best-5-cash-bac...

This way they'll make money after the limit takes effect. My assumption is that they are hoping the consumer will forget there's a hard limit to the amount they can save and always go with their "5% cash back card" when making purchases.

> This way they'll make money after the limit takes effect. My assumption is that they are hoping the consumer will forget there's a hard limit to the amount they can save and always go with their "5% cash back card" when making purchases.

And that assumption is exactly what I'm saying isn't universally true. My entire point is there are customers who just rotate cards instead of still using it for lower cash back. Who do this for years. Without racking up any interest. Why do those customers' accounts get kept open?

What I was saying above is that I wouldn't be surprised if a high enough percentage of even the customers who "beat the system" so to speak for many years eventually slip up that it makes up for the rest.

If that's the case, and you can't predict who exactly that subset is going to be, you keep all of them around.

Even a lot of the unlimited 2%-3% cards rate limit you by delaying how often you can pay the bill, so essentially your credit limit limits the amount of reward you can get.

Fun fact: you can pay your US tax return with a credit card for a ~1.5% fee.