How to maximize Discover it Cash Back’s benefits

The Discover it® Cash Back is a no-annual-fee rewards credit card that can earn plenty of cash back. But as with any card, it yields the best results when you use it strategically. Considering the card offers 5 percent cash back in rotating quarterly categories (up to $1,500 in spending per quarter after activation, then 1 percent), its strategy may require some extra thought.

Here’s how to maximize the Discover it Cash Back benefits to use this card to its full potential.

Plan your Discover it spending

The Discover it Cash Back isn’t the only cash back credit card offering 5 percent back in rotating categories. For instance, the Chase Freedom Flex℠ is another popular 5 percent cash back card with a similar rewards structure.

In the past, Chase was the only one of the two that announced its bonus categories one quarter at time, whereas Discover announced them all at once. Now, Discover has adopted the same strategy of releasing its rotating categories quarterly, so with either card you’ll have the same element of surprise.

Discover it Cash Back calendar 2023

For example, based on the Discover it 2023 calendar, you would want to use your Discover it Cash Back primarily for grocery stores and any streaming subscriptions for the first quarter. Once the next quarter’s categories are released and enrollment opens, you’ll have to adjust your spending.

Discover card benefits on general spending

While it’s ideal to reach the maximum spend, normally you shouldn’t go past it if you have a different card that would earn you more than 1 percent in the category.

Let’s say it’s the third quarter and you’ve met the maximum spend. Your dining spending on the Discover it Cash Back now only earns 1 percent back. But you also have the American Express® Gold Card, which earns 4 points per dollar at restaurants, so it’s time to use this card. Or maybe you have a flat-rate cash back card such as the Capital One Quicksilver Cash Rewards Credit Card, which earns 1.5 percent back on all purchases. It’s a better return than just 1 percent, and it makes sense to use it after you’ve reached the cap on the Discover it bonus categories.

The only exception would be your first year with the Discover it Cash Back. Through Cashback Match, Discover matches all the cash you earned with the card at the end of your first year. So, unless you have a card that earns more than 2 percent or 2 points in any category, the Discover it Cash Back can be your go-to card for all general purchases for the first year.

For example, in the same scenario we’ve looked at above, you’d still switch to the Amex Gold for dining purchases since 4 points per dollar is a higher rate than 2 percent cash back. The Capital One Quicksilver, however, would have to wait until you’d have had your Discover it Cash Back for a year, since 2 percent, in the long run, is arguably better than 1.5 percent cash back credit cards right now.

Activate Discover it Cash Back categories

Spending in Discover’s quarterly bonus categories won’t bring you any extra cash back if you forget to activate them. It’s a small but important detail.

Discover sends email reminders and provides plenty of time to activate its 5 percent cash back categories. The activation window starts two months before the category opens. For example, the fourth quarter starts October 1, but you can activate its bonus categories starting August 1.

Look out for special offers

To ensure you’re not missing any opportunities to save, keep an eye on special offers from Discover. The issuer typically sends you an email if you’re targeted.

For example, Discover tends to offers discounts on Amazon. We’ve seen offers including $50 off a $150 purchase if you use at least $1 of your earned cash back, 40 percent off on up to $50 in purchases, 20 percent off on eligible tech products and more.

Note that you can seamlessly use your cash back to pay for your purchases on Amazon, but be sure to add the Discover it Cash Back to your account.

Bottom line

The Discover it Cash Back offers abundant opportunities to earn and redeem cash back, but getting the most out of this card requires putting some thought into your spending. If you don’t mind doing some work to plan your credit card strategy, you can easily earn hundreds of dollars in cash back and savings with this card every year.