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Earning up to 5% cash back, the Discover it® Cash Back rewards you generously for everyday spending—if you use its quarterly rotating bonus categories correctly. With a few easy steps, you can earn industry-leading returns without paying an annual fee.
The card earns 5% cash back on everyday purchases at different places each quarter up to a quarterly maximum of $1,500 in spending when activated. Plus, earn unlimited 1% cash back on all other purchases – automatically.
Let’s take a closer look at how to make the most out of the 5% cash-back categories.
Discover it® Cash Back 2022 Bonus Categories
Discover has already announced a full year’s worth of bonus categories.
In 2022, you’ll find the following bonus categories each quarter:
- Q1: Grocery Stores, Fitness Clubs and Gym Memberships
- Q2: Gas Stations, Target
- Q3: Restaurants, PayPal
- Q4: Amazon.com, Digital Wallets (including Apple Pay, Google Pay, Samsung Pay and Garmin Pay)
On this year’s calendar, you’ll see a variety of featured categories. Chances are, at least one of the bonus categories each quarter will be useful to you. Purchases like groceries, gas and dining out are all common household expenses that are typically included at least once a year as bonus categories.
Activate the Categories Each Quarter
There’s one small (but crucial!) step in order to secure a full 5% cash back in those categories. In order to earn 5% instead of the standard 1% offered on all purchases, you’ll need to activate the bonus categories every quarter. Doing so is easy: Log into your Discover account and then click “Activate now” near the published categories. You can also activate through the Discover app or by calling 1-800-DISCOVER.
It’s best to activate your cash-back earnings as early as possible. That’s because you only earn the increased rate beginning when you register. If you forget to activate the bonus before making a purchase, you’ll only earn 1% on that purchase. Thankfully, you can still register and earn the full bonus rate for the remainder of the quarter. Better late than never.
Spend Strategically
Once you’ve activated the 5% bonus categories, you can shop knowing you’re earning a great rewards rate. In some quarters, the rotating categories will line up perfectly with your spending habits and it will be easy for you to maximize the full $1,500 spending limit ($75 in rewards) allowable per quarter.
Other periods may not be as straightforward. Occasionally, the bonus categories might not be a shoo-in for your routine. In those cases, try to think outside the box to find creative ways to max out your bonus instead of leaving money on the table.
For example, if the bonus categories include gas stations but you don’t own a car, you could head to the attached store to buy merchandise. Many gas stations sell gift cards to restaurants and retail stores. You could buy those gift cards, earning 5% cash back, and then use those gift cards at businesses you frequent anyway.
Another way to spend strategically is to time your purchases with the right time of year. For example, during a period where groceries are bonused, you might want to stock up on pantry items in order to maximize your rewards potential since many canned goods and paper products last a long time. On the flip side, you may also want to strategically delay purchases. Can the household goods or toys you need from a superstore wait until they earn 5%?
Maximizing bonus categories, especially through more creative methods, requires you to be responsible with the purchases you make. This approach only makes sense if you can pay your credit card bill in full and on time. Otherwise, the fees and interest payments on your credit card will be far more expensive than the cash back you earn.
Don’t Forget the Bonus Categories Are Capped
Unfortunately, only the first $1,500 in spending each quarter will qualify to earn bonus rewards. After that, you’ll only earn 1% on your purchases, regardless of the category. If you max out the full allowance, you’ll want to take a look at the other cards in your wallet to see if there are any that will earn more than the ongoing 1% rate. Then, pull the Discover it card back out when the new quarter’s categories—and spending limit—reset.
Bottom Line
All cash back helps your budget and 5% cash back is usually as high as it gets. Especially when the categories line up smoothly with the types of purchases you make, it’s an easy way to earn rewards. Someone who hits the $1,500 spending cap each quarter would earn $300 per year just from the 5% categories. That’s fabulous for a card with no annual fee.
If this strategy appeals to you and you want to take it even farther, you can double up with the Chase Freedom Flex℠. It’s structured similarly with no annual fee and earns 5% cash back on up to $1,500 in categories that rotate quarterly (requires activation), 5% on travel purchased through Chase Ultimate Rewards®, 3% on dining and drugstores and 1% on all other purchases. You can also consider cards that offer bonus rewards on fixed categories all year: matching the right categories with the types of purchases you make may pay off handsomely.
As with all credit cards, the trick is always to be responsible with your cards and only juggle as much as you can keep track of. There’s a fine line between maximizing rewards and getting in over your head, but a card like the Discover it® Cash Back is a logical place to start.
