I've had a Discover Card in my wallet since I was 19 years old - it's the card I've had the longest, and the one I never plan to give up. What makes me so loyal to that little card? Is it just because it has a beautiful Monet painting on it? Although looking at a lovely French Impressionist painting every time I pull it out of my wallet is nice, there are other factors that make the Discover card my go-to card when I want to put a purchase on plastic.
Unlike a card that offers reward points for making purchases, Discover offers cash back - a bonus that is easy to understand, straight forward, and concrete. Each month, I get my statement and see how much cash back I've earned, and how much is available to redeem. (You can only redeem it in certain increments, depending on what you're using it for - more on that later.)
What do you earn cash back for, and how much do you earn?
The Discover® More Card gives 1% cash back on all purchases after you spend $3,000 a year. Until you reach that $3,000 threshold, you'll get only .25% back - but if you're a heavy user of the card, like I am, you'll reach that amount pretty quickly and start earning 1% back on everything.
To Every Bonus, There is a Season
In addition to this, the More card gives 5% cash back in rotating categories, so there's always something you can earn 5% back on. The calendar this year looks like this:
- January through March, earn 5% back on purchases at gas stations, museums and movie theaters.
- April through June, earn 5% back on purchases at restaurants and movie theaters.
- In May, earn 5% back on up to $300 in purchases at grocery stores.
- July through September, earn 5% back on purchases at gas stations, movie theaters, and theme parks.
- October through December, earn 5% back on purchases at department stores, electronics stores, toy stores, and movie theaters.
An important thing to remember about these 5% cash back opportunities is that you won't be automatically enrolled in the program. Each one is a separate promotion that you must sign up for - so this year, you'd need to sign up five times for the five different changing categories. If you forget to sign up for the extra cash back bonus, you'll only get the usual 1% cash back, and if you sign up in the middle of the promotion, your 5% cash back starts after that - it isn't backdated to the beginning of the period. When you get your card, you'll have a chance to set up email reminders when you register your account online. These make it easy to remember to sign up - just click a link in the email, and you're signed up!
Another thing to know is that there is always a cap on the amount you can earn with the 5% cash back bonus - usually $75 (for spending $1500). The 1% cash back offer is unlimited however, so the more you spend, the more you get back. Another important note: warehouse purchases - including those made at discount clubs like Costco and Sam's Club - do not earn 1% cash back. They only earn .25%.
Show Me the Money
Once you've accumulated a nice big bonus, how can you spend it? If you'd like to redeem your award as a Discover gift card, you can do that starting at $20. For cash, in the form of a credit to your back account or Discover account, you'll need $50.
When you choose to receive your reward as a gift card, you'll have the chance to make your reward worth more, depending on which partner merchant you want to order a gift card from. They have over 150 partners, including GAP (turn a $40 bonus into a $50 gift card), Sephora (an $85 bonus becomes $100), and Barnes and Noble ($45 gets you $50).
You can also donate your cash back reward to a charity of your choice, pay for your Amazon purchase directly using your cash back bonus, or get a Discover gift card that you can give as a gift.
Fattening Up Your Bonus
A great way to spend that $3,000 you need to spend to start earning 1% back, and get a bigger bonus at the same time, is to shop online through the ShopDiscover network. Many of the things you'd buy anyway - shoes, electronics, clothes, housewares - are available through ShopDiscover, and you'll get cash back if you buy them through Discover's online portal. Buying new shoes? Instead of going directly to Shoes.com, use your Discover card to pay for your purchase at ShopDiscover, and earn a 15% cash back bonus on your purchase. At the Apple store you can get 5% cash back - same with Best Buy. They have hundreds of retailers in their network, offering cash back bonuses between 5% and 20%, and these bonuses are unlimited.
What's the Bottom Line?
Let's talk about the real amount of money you could easily get back in one year of owning the Discover More card. If you signed up for every rotating category this year and spent all the way up to the cap, you'd spend $6300 and get back $315 - a return of 5%. That's not even counting what you could earn with the extra 1% on everything you spend over $3,000, and any extra bonuses you earn through ShopDiscover.
Here are some other things people love about Discover card, and why they keep using their Discover cards year after year:
- An easy-to-navigate online banking center featuring a layout showing all your accounts together on one screen, allowing you to track balances, charges, and payments easily. Transfer funds, make payments, change your contact information, set up automatic transactions or redeem rewards online, securely and easily.
- Zero liability for unauthorized charges with Discover's complete fraud protection.
- Set up your bills to be paid automatically with Discover card and you'll earn 1% cash back just from paying your usual household bills.
- Personalize your account by choosing from over 100 different designs for your card - they have everything from ladybugs and flowers to flags and fish.
- Customize your email reminders to let you know when you're approaching your credit limit or payment due date or when your payment has posted.
- When you're traveling, take advantage of perks like flight rebooking if you miss a plane, baggage tracking in case your luggage is misplaced, and car rental insurance to cover collision or theft.
- Use Discover's account tools, like the PaydownPlannner and the Spend Analyzer, to take control of your finances and help you budget.
Ready to Sign Up?
If you're like most Americans, you'll love carrying a Discover card and you'll keep it for many years. Before you apply, here are the basic terms and conditions:
- No annual fee.
- For the first 14 months, 0% introductory APR on purchases and balance transfers.
- After introductory period, a Standard Purchase APR of 10.99% - 20.99%± Variable will apply.
- 3%± balance transfer fee.
- 24.99% APR on cash advances, with a cash advance fee of 5% ($10 min), whichever is greater.
- Late payment fee of Up to $35.
- Returned payment fee of up to $35.
I've loved my Discover card for years, and writing out all these benefits only makes me love it more. In fact, I think I'll hop on over to the ShopDiscover site right now and start adding to my cash back rewards this month!
± Click apply for Terms & Conditions.