Discover offers huge Apple Pay rewards

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Discover is offering cardholders an extra 10% cash-back bonus through the end of the year on up to $10,000 of in-store purchases made with Apple Pay. Its travel credit card holders also will earn an extra 10 miles per dollar on up to $10,000 of in-store purchases made with the mobile wallet.

Why should I care?

Because 10% cash back is kind of a big deal, particularly at that high of a cap. Most competitive rewards programs offer 1% back on base purchases and then 2% to 5% back on a special spending category.

With the Discover it® Cash Back, you can earn 5% cash back on up to $1,500 in purchases made in accordance with Discover’s 2018 Cashback Calendar after enrollment. Plus, 1% back on all other purchases.

These offers will work in tandem, Discover says, so savvy spenders could potentially rack up even more rewards.

Why is Discover doing this?

Per an official statement: “Discover is doing this because we know how important rewards are to our cardmembers.”

And it’s certainly true that the issuer has been doubling down on rewards — at the expense of some ancillary benefits — over the course of this year.

However, there’s a good chance security has something to do with the new bonus as well.

See, Apple Pay touts added security features — in the form of fingerprint authentication and tokenization — that make cards harder to hack. Given global card fraud is estimated to exceed $35 billion by 2020, it’s in issuers’ best interest to get cardholders to take advantage of the enhancements. (They do, after all, eat the majority of those losses.)

Discover’s new offer represents the biggest incentive provided by issuers to use Apple Pay to date, but other financial institutions may follow suit — especially when you consider how competitive Discover’s credit cards are looking these days.

Should I sign up?

If you’re an existing Discover cardholder and you have an iPhone 6 or the soon-to-be released 6S (or the Apple Watch), sure. Just be careful not to overspend in your quest to earn rewards. Cash back is essentially rendered moot once you start paying interest on purchases.

If you’re thinking about opening a Discover card, make sure your credit score can handle a ding. Each credit card application generates a hard inquiry on your credit report, which can cost you some points. You can pull your credit report for free at myBankrate to see where you stand.

How do I sign up?

Upgrade for free to iOS 9 (available next week) then go to the Passbook app to get started. If you already have a card on file with iTunes, all you will need to do is enter your card’s security code to load the payment method into the mobile wallet.

Any rewards you earn as a result of the offer will be added to a customer’s Cashback Bonus or Miles account within 2 billing periods, Discover says.

Would extra rewards get you to use a mobile wallet? Let us know in the comments below!

Compare the best cash back credit cards here.

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