Get the most from Discover Cash Back Bonus rewards & partners. Here’s how the program works and what you need to know about recent changes to the program and the pros/cons for 2013.
How does it work?
Discover Cash Back Bonus is a credit card rewards program. With Discover’s most popular, the “it” card, you get 5% cash back bonus in rotating categories and up to 1% cash back bonus on everything else.
You can also get a 5% to 20% cash back bonus with online shopping done through the ShopDiscover portal for cardmembers (hundreds of stores are part of the network). This accumulated bonus you earn on your spending can then be redeemed in a number of ways…
You have multiple redemption options
- Get a credit to your Discover credit card account (at face value, i.e. $50 statement credit will use up $50 in cash back bonus)
- Get a direct deposit to your bank account (also at face value)
- Donate your cash back balance to charity (at face value)
- Get a Discover gift card with free shipping and no fees (at face value)
So those options are all at face value (where $1 in cash back bonus equals $1 towards the reward) but there are a couple ways to increase what you get in return:
- A couple years back the Discover Cash Back Bonus rewards program added merchandise as a redemption option. Upon viewing the selection in my account, it looks like they have several hundred products currently available – electronics, fashion, toys, kitchen… you name it, they have it. With some of these products, it looks like you can get more bang for your buck (amount of Cashback Bonus it costs is less than the price in the store).
- Last by certainly not least, the most popular option is to redeem your Cashback Bonus for partner gift cards. There are nearly 200 companies participating and the face value of the gift card is more than the amount of Cashback Bonus it will cost you. For example, you only need to use $20 of your rewards to get a $25 Staples gift card, $20 for $40 Mrs. Fields Cookies gift card, etc.
How to maximize your Cashback Bonus?
For starters, take advantage of the 5% categories as much as possible. When it comes time to redeem your accumulated rewards, statement credits and direct deposits are only face value so skip those. The partner gift cards will almost always give you the most bang for your buck. At the very least, you can get a 25% bump ($25 gift card for $20 in rewards) or an 11% bump ($50 gift card for $45).
For non-category purchases, unfortunately Discover has a tiered system which gives 1/4% for the first $3,000 spent per account year and 1% after that. I was hoping they would change that for 2013 but unfortunately, they’re not. This means the card is less-than-ideal choice for non-category spending. Therefore I recommend you do what I do: only use your Discover for the bonus categories and online purchases thru ShopDiscover participating retailers.
Which of their cards is best for rewards?
The Discover More gives you up to 5% in various categories and up to 1% everywhere else. Here is the application and best signup offer available.
Already have the More card? Then check out the comparable Chase Freedom which gives 5% on categories and a full 1% on everything else.