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While some cash back credit cards offer a flat rewards rate for each dollar you spend, the Discover it® Cash Back and the Discover it® Student Cash Back take a different approach.
Cardholders will earn a flat 1 percent cash back for all regular spending with both cards, but they will also earn 5 percent cash back on up to $1,500 they spend each quarter in rotating categories (activation required). After you hit that limit, you’ll earn 1 percent cash back on any additional purchases in these rotating categories. Both cards also come with no annual fee, making either a good choice to keep in your wallet.
Discover also takes a different approach when it comes to welcome bonuses. Instead of a traditional cash bonus that you earn when you meet a minimum spending requirement, Discover will match all the rewards you earn at the end of your first year of card membership. This means that if you earn $200 in cash back your first year, you’ll receive another $200 at the end of the year via Discover’s Cashback Match™, for a total of $400 in cash back.
If you’re considering either the Discover it® Cash Back or Discover it® Student Cash Back, you’ll need to know which categories provide higher cash back rewards. This guide explains Discover’s rotating categories so far for 2023, along with how you can best utilize its cash back calendar.
Discover’s rotating cash back calendar for 2023
Discover’s cash back bonus categories change each quarter, allowing cardholders to consistently have great options of categories in which they’ll earn elevated cash back. It helps that Discover includes categories that most people can use.
If your goal is maximizing your rewards, you’ll want to familiarize yourself with the 2023 Discover cash back calendar so far and compare previous years’ calendar details to see which spending categories have remained consistent over time.
|Quarter||2021 Discover it categories||2022 Discover it categories||2023 Discover it categories|
As you can see, certain categories have stayed consistent over the last three years. However, for Q3 2023, restaurants and PayPal were swapped for gas stations and digital wallet purchases, with restaurants having been featured as a Q2 category. For Q4 2023, Amazon.com has remained as one of the options, whereas Target hasn’t been featured as a Q4 category since 2021.
Unlike previous years where Discover released all of its cash back categories at once, the issuer has started to release categories one quarter at a time — in line with how Chase releases its bonus categories. This change is likely an unwelcome one for existing cardholders who’re used to seeing everything at once and planning accordingly, but it’s not an uncommon practice among rotating category cards.
How to activate Discover categories
You won’t earn your 5 percent cash back bonuses with the Discover it® Cash Back or Discover it® Student Cash Back unless you activate this bonus feature on your card each quarter. Fortunately, you can easily activate your bonus categories on your credit card’s online account page.
If you’re unsure whether you’ve activated your quarterly bonus categories, you can also check by using the Discover website. On the cash back calendar page, you can click on “Log In to Activate.”
Making the most of Q4’s bonus categories
In the fourth quarter of 2023 — October through December — you can earn 5 percent back at Amazon.com and Target (on up to $1,500 for the quarter after activation, then 1 percent). Consider the following tips to get the most out of these bonus categories:
- Stock up or get Amazon gift cards. If there are items you regularly buy from Amazon, consider buying in bulk this quarter to get a discount with your cash back. This could include anything from nonperishable food items to consumables like paper towels or garbage bags. Also, note that your 5 percent cash back counts toward Amazon.com gift cards, Prime subscriptions and Amazon Fresh orders, too.
- Get groceries from Target. Buy groceries in-store or on Target.com this quarter and earn a higher rate of cash back on those purchases.
- Purchase big-ticket items or start your holiday shopping early. This quarter is an ideal time to purchase more expensive items like electronics, clothes or home furnishings — or even start holiday gift shopping. And both Amazon and Target are great places to shop for these items.
How to redeem Discover rewards
Unlike some other cash back credit cards that make you build up a minimum balance of rewards before you can cash them in, the Discover it® Cash Back and Discover it® Student Cash Back let you redeem rewards in the form of a direct deposit to your account or a statement credit on your card in any amount.
You can also redeem your rewards for gift cards when you’ve accrued at least $5 in your rewards account. Cardmembers can redeem their cash back for a physical or digital partner gift card with a possible 5 percent to 20 percent added value to each gift card (depending on the merchant). Partner gift cards range from $5 to $200 in increments of $5. You can also donate your cash back earnings to charity or make purchases through Amazon.com or PayPal.com.
Rewards you earn with Discover credit cards never expire as long as your account is open, so you can keep earning until you’re ready to redeem.
The bottom line
The Discover it® Cash Back and Discover it® Student Cash Back make it easy to earn rewards without an annual fee, but you’ll get more out of either card if you pay attention to the rotating bonus categories offered. This is especially true during the first year you’re a cardholder since Discover will match all the rewards you earn at the end of your first year. Just be sure to activate your bonus rewards each quarter so you don’t miss out.