Discover Card offers a great 5% Cashback Bonus in selected categories. But knowing how and when to use those categories along with their limits is key to getting the most on your Cashback Bonus.
Cashback Bonuses can result in high ROI (return on investment) from spending. Maureen Powers, Vice President of Rewards for Discover, had this to say about Cashback Bonus ROI, “One of the easiest ways to spend smarter is by using a cash back credit card for everyday purchases. Instead of using cash, or a debit card, which typically offers little-to-zero rewards, opt for using a credit card that offers cash back perks.”
In this article, we’re going to show you how to get the most from your Discover Cashback Bonus categories.
Rolling Calendar Bonus
Discover Cashback Bonus categories run on a rolling, quarterly calendar basis. For 2021, the categories breakdown like this:
JAN-MAR 2021: Grocery Stores, Walgreens, CVS
APR-JUN 2021: Gas Stations, Wholesale Clubs, and Select Streaming Services
JUL-SEP 2021: Restaurants, PayPal
OCT-DEC 2021: Amazon.com, WalMart.com, Target.com
The way Cashback Bonus categories work is that you get 5% cashback starting on the first day of the mentioned quarter until the last day. For JAN-MAR 2021, that means January 1–March 31, 2020. Specifically for that category, you’ll earn 5% cashback only at grocery stores.
Each category mentions where the bonus applies. Also, each category is capped at $1,500 in purchases.
It’s important to note that you’ll need to activate the bonus for each quarter before you can start taking advantage of it. You’ll have plenty of notice as each quarter bonus is announced in the previous quarter.
If you’re late to the party on the current quarter bonus, don’t worry. You aren’t left out. You can still activate the current quarter’s bonus. Of course, the full quarter amount of time won’t be available to spend up to the $1,500 maximum.
Best of all, your Cashback Bonus has no expiration date. If you don’t use it after 18 months, Discover will apply a credit for the Cashback Bonus amount to your account.
Cashback Bonus Dollar Values And Category Qualifications
Not every Cashback Bonus dollar is created equal. For example, you can pay for Amazon purchases using your Cashback Bonus. For Amazon, each Cashback Bonus will equal $1 to spend. A one-to-one ratio.
For gift cards, the return is much higher, as we will see later in this article. There are also differences with Discover Deals, depending on the actual Deal.
In regards to qualifications, what does “Gas Stations” or “Wholesale Clubs” mean exactly? Discover Card’s Program Details can be found here. But here are a few of those definitions:
Gas Stations - Stand alone. Purchases made at Gas Stations affiliated with superstores and supermarkets may not be eligible.
Wholesale Clubs - Check with your Wholesale Club to make sure your Discover card is accepted. Certain Wholesale Club services, such as travel and cell phone purchases may not be eligible in this category.
You’ll want to go through the fine print from the above link. It isn’t that much and it will be well worth your time to ensure you’re making only qualified purchases that will result in a Cashback Bonus.
Discover Deals let you earn Cashback Bonuses on top of your other Cashback Bonuses from categories. In other words, the two are independent.
Unlike Cashback Bonus categories, Discover Deals don’t require activating. Just go to the Discover Deals section of the Discover website and start shopping. Deals are clearly marked.
Some deals are ongoing while others show expiration dates. Deals are used with specific merchants. But many of them are the same ones you are likely already using. They include:
To name just a few of the many merchants available.
Earn 25% More With Your Cashback Bonus
An additional way to earn even more using your Cashback Bonus is with gift cards. Here’s how it works:
After spending and earning a Cashback Bonus, you can take $20 off the Bonus and get a $25 gift card. That’s a 25% immediate return on your Cashback Bonus.
There are two categories of gift cards: traditional plastic and eCertificates (digital gift cards). Plastic cards have to be mailed to you. You’ll receive eCertificates immediately. eCertificates can be printed out right after you purchase them.
There’s a large selection of merchants to choose from and a broad range of categories, which include:
Not all gift cards have a 25% return. Some are $45 Cashback Bonus for a $50 gift card, which is still over an 11% return.
Knowing how to utilize Discover Cashback Bonus categories can put extra savings right into your bank account. With some opportunities providing a 25% return, you’ll have a difficult time trying to find a better deal anywhere else.
Don’t forget to mark your calendar and be sure to activate each quarterly Cashback Bonus. You’ll then always be ready for great savings!
Do have you have a Discover card? Are you planning on utilizing the cash back categories in 2020?
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.