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The Discover it® Cash Back card is one of the most popular no-annual-fee cash-back credit cards around. In large part, its popularity is due to a tiered rewards program that features a selection of rotating 5% cash-back categories.
Spending eligible to earn 5% cash back is capped at $1,500 per quarter across all bonus categories, so total potential bonus cash back tops out at $300 per year. Still, that’s a substantial haul for a no-annual-fee credit card, especially with unlimited 1% cash back on virtually all other purchases.
While the bonus categories change every quarter, you can always use the tips below to earn more with your Discover it Cash Back card.
Discover it Cash Back 5% Bonus Category Calendar: 2020
But first, let’s peer ahead at Discover it Cash Back’s 5% categories for the rest of 2020.
- Q1: Grocery stores, Walgreens, CVS
- Q2: Gas stations, Uber, Lyft, and wholesale clubs (such as Costco and Sam’s Club)
- Q3: Restaurants, PayPal
- Q4: Amazon.com, Target.com, Walmart.com
To earn 5% cash back on up to $1,500 in combined category purchases each quarter, you must manually activate your bonus cash back. Activation isn’t retroactive to the beginning of the quarter, so activate before the first day (that’s Jan. 1, April 1, July 1, and Oct. 1) to get the most out of your card.
Discover it Cash Back 5% Bonus Categories: Q1 2020
From Jan. 1 through March 31, 2020, Discover it has two bonus cash-back categories:
- Grocery stores and supermarkets
- Walgreens and CVS
This category covers purchases made at most supermarkets and small-format grocery stores, including independently owned and operated stores not associated with regional or national chains.
This category explicitly excludes grocery purchases made at Walmart and Target and their respective e-commerce sites. It also excludes grocery purchases made at warehouse stores like Costco and Sam’s Club.
Walgreens & CVS
This category covers purchases made at drugstore giants Walgreens and CVS. In-store, online, and app purchases are eligible, though they don’t guarantee online and app purchases made with the assistance of third-party digital wallet technologies qualify. Purchases made with merchants housed inside Walgreens or CVS locations, such as health clinics, don’t qualify for bonus cash back.
Discover it Cash Back 5% Bonus Categories: Q2 2020
From April 1 through June 30, 2020, Discover it has three bonus cash-back categories:
- Gas stations
- Uber and Lyft (ride-hailing operators)
- Warehouse stores
This category includes purchases made at the pump and inside standalone gas stations. It may not include purchases made at gas stations associated with supermarkets, superstores, and wholesale clubs.
Uber & Lyft
This category covers ride-hailing purchases made with Uber and Lyft in the United States only. Uber and Lyft purchases made outside the United States are specifically excluded, as are non-ride purchases made with Uber (such as Uber Eats, the company’s food delivery service).
This category covers purchases made directly with wholesale clubs, such as Costco, Sam’s Club, and BJ’s. Purchases of affiliated services, such as travel and home improvements, may not be eligible, depending on how they’re coded. Purchases with third-party merchants located within wholesale clubs may not be eligible either.
Discover it Cash Back 5% Bonus Categories: Q3 2020
From July 1 through Sept. 30, 2020, Discover it has two bonus cash-back categories:
This category includes purchases made with vendors classified as full-service restaurants, cafeterias, cafes, and fast food restaurants. It excludes prepared foods purchases at supermarkets and other vendors not classified as restaurants.
This category includes the following types of transactions:
- Purchases made through your digital PayPal wallet
- Money sent to friends and family using your Discover card
- Point of sale transactions made using PayPal Here
Transactions executed through PayPal’s Xoom transfer app are not eligible for bonus cash back.
Discover it Cash Back 5% Bonus Categories: Q4 2020
From Oct. 1 through Dec. 31, 2020, Discover it has three bonus cash-back categories:
This category includes virtually all purchases of products and services at Amazon.com, including (but not limited to):
- Merchandise sold directly by Amazon.com
- Merchandise sold by third-party sellers
- Amazon Prime subscriptions
- Amazon Fresh orders
- Amazon digital downloads (including Kindle books)
- Amazon Local Deals
This category also includes in-store purchases at Amazon Go, Amazon Bookstore, and Amazon 4-Star.
This category includes purchases made at Target.com and through the Target app. It excludes purchases made with third-party Target affiliates and point of sale purchases made inside Target superstores.
This category includes purchases made at Target.com and through the Walmart app, including purchases ordered for in-store pickup. It excludes purchases made with third-party Walmart affiliates and purchases made at points of sale inside Walmart superstores.
How Discover Tracks Cash Back
Discover awards cash back on purchase transactions only — not cashlike transactions, such as:
- Balance transfers
- Cash advances, including ATM withdrawals
- Gift card purchases regardless of where they occur
- Gaming purchases, including lottery tickets and casino chips
Cash back is calculated on “net purchases” — the total transaction amount, including tax, minus credits like refunds, chargebacks, or manager discounts.
All purchases eligible for cash back, including bonus category purchases, earn unlimited 1% cash back. Eligible bonus category purchases earn an additional 4% cash back, for a total of 5% cash back up to the $1,500 combined quarterly spending limit. After you’ve reached the quarterly spending limit, bonus category purchases still earn unlimited 1% cash back.
Tips to Earn More Cash Back With Discover it
Bonus cash-back categories come and go, but these tips to maximize your cash-back earnings with Discover it never change. Use them to earn more bonus cash back without compromising your budget.
1. Remind Yourself to Activate Bonus Cash Back Before the Quarter Starts
Discover asks cardholders to activate their 5% cash back categories each quarter. Otherwise, bonus category purchases earn only the baseline cash-back rate of 1%.
The activation itself takes all of 15 seconds from your account dashboard. For busy cardholders, remembering to activate it is the tricky part. Such a small task is easy to lose in the shuffle.
To compound things, Discover doesn’t grant retroactive bonus cash back. Cardholders who forget to activate until midway through the quarter can’t recover that additional 4% on earlier bonus category purchases. Maximizing your 5% cash-back earnings — or, at the very least, giving yourself a fighting chance to reach the $1,500 bonus category spending cap — means activating on or before the first day of the quarter.
Fortunately, Discover provides ample time: months, not weeks. If you log into your account more than once per month, you should have multiple opportunities to activate in time. Tilt the odds further in your favor by setting a calendar reminder for the last week of the preceding quarter.
2. Set Up Autopay With Bonus Category Merchants
Before the start of a new quarter, review Discover it’s bonus categories and initiate autopay with any bonus-eligible merchants you already make recurring subscription or bill payments to. Make your Discover it Cash Back card the default payment method for nonsubscription merchants you regularly patronize too. Examples of both include:
- Streaming content providers like Hulu or Netflix
- Ride-hailing apps like Uber and Lyft
- Grocery delivery services like Instacart
- Telecommunications companies
- Third-party payment apps, such as PayPal (but only when the app itself is eligible for bonus cash back)
- Digital media providers
Be sure to discontinue autopay or remove your Discover it card as a payment method when the quarter ends.
3. Make Larger Purchases With Bonus Category Merchants When It’s Cost-Effective
As long as it doesn’t result in higher net spending, make as many big-ticket purchases as possible with bonus category merchants rather than other merchants selling equivalent products. For instance, when warehouse store spending earns 5% cash back, find time for an extra Costco run or two. A well-planned journey to the warehouse store supplants multiple trips to the supermarket and probably costs less per calorie — as long as you know what not to buy in bulk.
4. Move Up or Delay Bonus Category Purchases
Discover reveals bonus cash-back categories many months in advance, giving you plenty of time to create a strategic spending plan. For instance, if you know gas station purchases are eligible for 5% cash back in a few months, that’s probably when you should schedule the epic road trip you’ve been saving up for.
Uncommon purchases aren’t the only kind this strategy’s effective for. It’s also helpful for ordinary purchases, like grocery store spending. When these sorts of everyday spending categories roll into bonus territory, force yourself to get into a regular groove — say, penciling in a standing date with your shopping card each Saturday morning. Better to sacrifice an hour each week than to overspend on takeout and miss out on that sweet bonus cash back.
5. Understand Bonus Category Exceptions
Discover’s cash back calendar includes a hefty dose of fine print. Painful as it sounds, it pays to read it all. Each bonus category’s extended description covers exceptions and exclusions — situations in which spending that seems bonus-eligible isn’t.
For instance, when gas station purchases rotate into bonus territory, gas purchases at filling stations associated with warehouse stores and superstores might not. If you’re usually inclined to fill up at Costco or Meijer, try patronizing the Circle K across the road this quarter.
6. Always Have Your Discover it Card on Hand
This one is easy. Give your Discover it Cash Back card a place of honor in your wallet, even if you don’t use it every day. When the opportunity to earn 5% cash back arises, you can be ready to seize it.
As a Discover it Cash Back cardholder, you’re eligible to earn up to $75 in bonus cash back each quarter. That’s $300 per year — not bad for a no-annual-fee credit card. And you always earn 1% cash back on regular spending, with no spending caps or earning restrictions.
It’s no cakewalk to earn $300 in bonus cash back each year with the Discover it Cash Back card. The first hurdle is remembering to activate your bonus categories. Not all cardholders do. Beyond that, Discover doesn’t always serve up categories that align with your spending habits. Even if you’d like to max out your bonus cash back in a particular quarter, you can have a tough time scrounging up the requisite spending.
On the other hand, Discover’s bonus categories encourage smarter, less wasteful spending. Each time you substitute a frivolous nonbonus transaction for a bonus category purchase you need to make, that counts as a victory for your budget.
Read our Discover it Card Review for more details on this card.
What’s your top tip for maximizing cash back with the Discover it Cash Back card?
Editorial Note: The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author's alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.