How I use my Discover it Cash Back

Cash back credit cards with rotating categories may seem like a lot of work. That’s understandable: To maximize this type of rewards card, a cardholder needs to keep track of bonus categories that change every quarter and remember to activate them.

Still, for a card enthusiast, this kind of card can be a gold mine. Since I consider myself a credit card nerd, this is true for me as well. The Discover it® Cash Back is the card that got me hooked on credit card rewards because it showed me how easy it is to get hundreds of dollars in cash back and savings.

Here’s how I use my Discover it Cash Back card (and why I won’t stop raving about it).

I make sure to activate bonus categories

The Discover it Cash Back won’t offer much value if you forget to activate the bonus categories every quarter. I’ve been good at remembering so far – I’m good at remembering about “free money” in general, which is how I think about credit card rewards.

Plus, even if my memory fails me, I can count on Discover to nudge me gently. The issuer sends out activation reminders every quarter, as well as reminders about the current bonus categories you’re earning in.

I keep track of the rotating categories

It’s true that a card like Discover it Cash Back requires that you put some thinking in your credit card strategy, especially if it’s not your only card. Often, it involves changing which cards you use in certain categories to get the most return.

For example, in the third quarter of 2021, the Discover it Cash Back will earn 5% back on restaurant and PayPal purchases (up to $1,500 in spending, after activation). Normally, I use the American Express® Gold Card at restaurants since it earns 4 points per dollar in this category. However, from July through September I’ll be using my Discover it card to get 5% back instead.

Since it’s my first year with the card, the cash back I earn will double, thanks to Discover’s generous Cashback Match. Essentially, I’ll be earning 10% back once you factor in this bonus.

I’m using the card for general purchases in the first year

Speaking of the Cashback Match offer: Since it doubles all the cash back you earn in your first year, it makes sense to also use it outside of the bonus categories for that period.

For instance, normally I’d use the Capital One Quicksilver Cash Rewards Credit Card on purchases outside of the bonus categories on my other cards. This convenient cash back card earns 1.5% back on everything, which makes it an excellent choice for general purchases.

However, until October 2021 – when my first year with the Discover it Cash Back ends – I’m using my Discover card for this type of purchase. Since all the cash back I’ll have earned during this period will be matched, you could say I’ll be earning 2% on general purchases instead of 1%.

It might not sound like a huge deal but consider this: If I spent $1,000 on general purchases every month, that would total up to $12,000 in spend per year. With my Quicksilver, I’d earn $180 in a year. With the Discover it Cash Back, I’d earn $240 for those purchases in total.

That’s a $60 difference: two weeks’ worth of morning coffee shop runs or almost two months of free internet if you have the same plan I do. I don’t know about you, but it’s against my nature to say no to such wonderful things.

I monitor special offers

Discover might not be as big on limited-time promotions as issuers like Chase or American Express, but from time to time, you can get an exciting targeted offer.

In my first month with the card (October 2020), when the bonus categories included Amazon.com, Target.com and Walmart.com, I was using the Discover it Cash Back to furnish my apartment. I received an offer I couldn’t pass up: $50 off a $150 Amazon purchase if I used my Discover rewards to cover any portion of the purchase.

Needless to say, it was extremely generous.

Also, needless to say, I used it right away. Lots of things were bought that night, including a console table, a coffee table, a nightstand, a toaster, silverware, an Instant Pot… My apartment finally felt like home.

I’m taking advantage of 0% APR

To be honest, the thought of carrying a balance on a credit card gives me anxiety, even if the card comes with a zero-interest intro offer. Debt is a real credit card fear.

Still, I did it with the Discover it Cash Back, and it was a good call. The card offers 15 months of 0% intro APR (11.99% to 22.99% variable APR after that), so it’s an excellent choice for large purchases.

As I’ve mentioned, I was furnishing my apartment last October. It was completely bare, so I had to buy everything, from a dinner table set to a TV to utensils. Living in an empty apartment is a miserable experience, so I went ahead and splurged at Amazon and Walmart.com using my Discover it Cash Back.

I met the category’s $1,500 spending cap in a matter of days and paid off the balance in a couple of months, no money lost to interest. Thanks to cash back and special offers, I also saved about $325 with the card.

I’m less scared of carrying a balance now, provided there’s a good 0% APR intro offer.

Bottom line

If you’re wondering whether a rotating categories card is worth the effort it requires, I can tell you it is. Check CardMatch to find your next cash back card tailored to your credit profile – it’s free, and checking won’t impact your credit!