Maximize Discover the benefits of Cash Back

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Discover it® Cash Back is a bonus credit card with no annual fee that can earn you a lot of money back. But like any card, it works best when you use it strategically. Given that the card offers 5% cashback in rotating quarterly categories (up to $1,500 spending per quarter after activation, then 1%), its strategy may require some extra thought.

Here’s how to get the most out of Discover it Cash Back to make the most of this card.

Plan your expenses Discover it

Discover it Cash Back isn’t the only cashback credit card offering a 5% return in rotating categories. For example, Chase Freedom Flex℠ is another popular card with 5% cashback and a similar reward structure.

One of the main differences is that Chase only announces its bonus categories one quarter at a time, offering an element of surprise. With the Discover Cashback feature, you know the categories before the start of the year, allowing you to plan your spending ahead of time to maximize your cashback income.

Discover Cash Back Calendar 2022

Quarter Categories
Winter (January-March)
  • Grocery stores
  • Fitness clubs
  • Gym membership
Spring (April-June)
Summer (July-September)
Holiday (October-December)
  • Digital Wallets

For example, based on a “Discover 2022” calendar, you’ll want to make it your business card in Q3 and use it for holiday shopping online in Q4. In the same way, you will plan the rest of the categories.

Discover the benefits of the shared spending card

While reaching the maximum spending amount is ideal, you usually shouldn’t go over it if you have another card that earns you more than 1 percent in that category.

Let’s say it’s the third quarter and you’ve hit your spending cap. Your Discover it Cash Back meal expenses are now only returning 1 percent. But you also have an American Express® Gold Card that earns you 4 points per dollar at restaurants, so it’s time to use that card. Or maybe you have a flat rate cash back card like the Capital One Quicksilver Cash Rewards credit card that gives you 1.5 percent back on all purchases. This is a better return than just 1 percent, and it makes sense to use it after you have reached the limit in the Discover it bonus categories.

The only exception will be your first year with Discover it cashback. With Cashback Match Discover matches all the money you earned with the card at the end of the first year. So, if you don’t have a card that earns more than 2 percent or 2 points in any category, the Discover it Cash Back card can be your card for all regular purchases during the first year.

For example, in the same scenario we covered above, you would still switch to Amex Gold for restaurant purchases, since 4 points per dollar is a higher rate than 2% cashback. Capital One Quicksilver, however, will have to wait until you get Discover it cashback within a year, as 2% in the long run is probably better than 1.5% cashback credit cards right now.

Activate Discover it Cash Back categories

Spending in Discover’s Quarterly Bonus Tiers will not refund you any extra money if you forget to redeem them. This is a small but important detail.

Discover sends email reminders and allows enough time to activate its 5% cashback categories. The activation window starts two months before the opening of the category. For example, the fourth quarter starts on October 1st, but you can activate its bonus categories from August 1st.

Watch out for special offers

To never miss a chance to save money, keep an eye out for special offers from Discover. The issuer will usually send you an email if you have been targeted.

For example, Discover usually offers discounts on Amazon. We’ve seen offers including $50 off a $150 purchase if you use at least $1 of cashback earned, 40 percent off purchases under $50, 20 percent off eligible tech products, and more.

Please note that you can freely use Cashback to pay for purchases on Amazon, but be sure to add the “Discover Cashback” feature to your account.

bottom line

The Discover Cashback Card offers a wide range of options for earning and using cashback, but to get the most out of this card, you need to think carefully about your spending. If you don’t mind working on planning your credit card strategy, you can easily earn hundreds of dollars in cash and save with this card every year.

Editorial disclaimer

The editorial content on this page is based solely on the objective judgment of our contributors and is not based on advertising. It was not provided or ordered by credit card issuers. However, we may receive compensation when you click on links to our partners’ products.

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