Cashing in on Discover’s double cash back promo

Discover just announced a promotion that might persuade you to apply – or take your Discover it card out of the sock drawer: it’s offering to double your cash-back earnings for a year.

This promotion, which is available to new Discover it cardholders for a limited time, has a lot of potential, especially if you can maximize the card’s quarterly categories. Here’s a run-down of the details.

Available on Discover it line of cards

This promotion is being offered on the following products:

  • The regular Discover it® with rotating 5 percent categories
  • The Discover it® chrome, which offers 2 percent back on up to $1,000 in combined purchases at restaurants and gas stations every quarter.

Another card in Discover’s stable (the Discover it® Miles card) also doubles rewards earned the first year, but its rewards structure is slightly different, and it’s not part of this specific promotion. Read more about it here.

Double pay-outs for those who wait

All cash back you earn for 12 billing cycles will be doubled afterward, assuming your account is still open. So, if you earn $200 worth of cash back over those 12 billing cycles, you’ll get an additional $200 (for a total of $400) after all 12 of those billing cycles are complete.

Discover isn’t the only card on the market to offer double cash. In fact, Citi has its own Double Cash card, which gives 1 percent on all purchases, plus another 1 percent when you pay them off.

The Discover it and it chrome, however, have boosted rewards (5 percent or 2 percent back, respectively) in certain categories.

Translation: You can get up to 10 percent back on your spending (in certain categories) and 2 percent on virtually everything else with this promotion.

New cardholders are eligible

Double cash for the first year is available for a limited time to new cardholders.

If you have a non-‘it’ Discover card and want in on this promotion, you’ll need to convert your account to an ‘it’ card before enrolling.

Once you enroll, double cash back will start accruing at the beginning of the next billing cycle.

Maximizing this promotion

This double cash promotion essentially replaces the sign-up bonus offered by similar cards. Because sign-up bonuses generally get you an influx of cash (sometimes as much as $200) within three months if you meet the spending requirements, this might seem preferable to waiting an entire year. And it very well may be, especially if you’re spreading out your spending across multiple cards.

However, if you can concentrate your spending on your Discover it for a year, doubling your cash might be worth waiting for. Here are a few ways to maximize this promotion:

  • Utilize Discover Deals: This allows you to earn extra cash back on certain purchases with partner retailers. So, before you make a planned purchase, log in first and see if the merchant partners with Discover. If you use your Discover card to pay, you’ll get the bonus automatically – and that bonus will be doubled at the end of your first year.
  • Plan your spending around the categories: The Discover it and Discover it for students give 5 percent back in rotating categories (on up to $1,500 in spending each quarter) – and that’s where you’ll see the biggest gains when your cash back doubles to 10 percent. In Q3 of 2015, for example, one of the categories is home improvement stores. If you can time a $1,500 home improvement project to coincide with that category, you’re looking at $150 after your rewards double. Discover is known for holiday-friendly categories in the fourth quarter, so you might be able to get 10 percent back on gifts you buy.

Let’s look at an example. Say, over the course of the next year, you use your Discover it 5 percent to spend:

  • $1,500 on eligible home improvement purchases in Q3
  • $500 on eligible holiday expenses in Q4
  • $2,000 on other non-category purchases throughout the year

After your earnings get doubled, you’re looking at a grand total of $240. Few no-annual-fee cash-back cards have sign-up bonuses that generous.

Again, your rewards may not be as dramatic, depending on how much of a workout your Discover it card gets this year. Even so, getting at least 2 percent back on all purchases might make it worth pulling your Discover it card out of your wallet for expenses that don’t match another card’s bonus categories. Plus, keep in mind that using the Discover it chrome for students will get you 4 percent back on gas and restaurants year round (on up to $1,000 in combined spending per quarter) after your rewards double.

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