Guide to the 2021 Discover Cash Back calendar

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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 takes a different approach.

Cardholders do earn a flat 1 percent back for all regular spending, but they also earn 5 percent back on up to $1,500 they spend each quarter in rotating categories (activation required). After you hit that limit, you earn 1 percent on any additional purchases in these rotating categories. The card also comes with no annual fee, which makes it a good choice for the long haul.

Discover also takes a different approach when it comes to welcome bonuses. Instead of a traditional bonus that you earn when you meet a minimum spending requirement, Discover will match all the rewards that you earn in the first 12 months. This means that if you earn $200 in cash back your first year, Discover will match that amount and you’ll receive a total of $400 cash back.

Considering the Discover it Cash Back card? Then you’ll need to know in which categories you can earn higher cash back rewards. This guide explains the Discover it Cash Back calendar and, in particular, Discover’s rotating categories for all of 2021.

Discover’s 5% cash back calendar for 2021

Discover’s cash back bonus categories change each quarter, giving cardholders the chance to consistently choose the categories in which they might earn the most rewards. 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 2021 Discover cash back calendar. Below, you can also compare Discover calendar details for 2020 to see which spending categories remain consistent over time.

Quarter 2020 Discover it categories 2021 Discover it categories
Q1: January through March
  • Grocery stores
  • Walgreens
  • CVS
  • Grocery stores
  • Walgreens
  • CVS
Q2: April through June
  • Gas stations
  • Wholesale clubs
  • Uber and Lyft
  • Gas stations
  • Wholesale clubs
  • Select streaming services
Q3: July through September
  • Restaurants
  • PayPal
  • Restaurants
  • PayPal
Q4: October through December
  • Amazon.com
  • Target.com
  • Walmart.com
  • Amazon.com
  • Target.com
  • Walmart.com

As you can see, the calendar for 2021 includes many of the same bonus categories as it did in 2020. The main difference is in April through June of 2021, you would have earned (upon activation) 5 percent back on select streaming services instead of Uber and Lyft (up to $1,500 per quarter on purchases, then 1 percent) on top of the other categories like gas stations and wholesale clubs.

How to activate Discover categories

You won’t earn your 5 percent cash back bonuses with the Discover it Cash Back card (or the Discover it® Student Cash Back, for that matter) unless you activate this bonus feature on your card. Fortunately, you can easily activate your bonus categories on your credit card’s online account management page.

If you’re not sure whether you’ve activated each quarter’s bonus categories, you can also check by using the Discover website. On the cash back calendar page, you can click on “log in to see if you’re activated.”

Making the most of this quarter’s bonus categories

We’re still in the fourth quarter of 2021, which means there’s still a chance to rack up 5 percent back on up to $1,500 in Amazon.com, Target.com and Walmart.com spending (activation required), then 1 percent. To get the most out of this quarter’s bonus categories, consider these tips:

  • Planning your holiday shopping. The timing of this bonus category couldn’t be more perfect. If you’ve got holiday shopping to do, using your Discover it Cash Back will give you an automatic 5 percent cash back. Just remember to activate the bonus and use your card where it counts: Amazon.com, Target.com and Walmart.com

When we enter the first quarter of 2022, you can earn more rewards by using your card at grocery stores, Walgreens and CVS. To get the most out of these bonus categories, consider:

  • Stocking up in bulk. If there are items you use regularly from the grocery store, considering buying in bulk to get a discount with your cash back. This is could include anything from non-perishable food items to consumables like paper towels or garbage bags.
  • Load up on health and medical-related items. The beginning of the year can be a reset for some looking to improve their health and fitness. Use your card for purchases at CVS and Walgreens to help you accomplish this goal—vitamins, meal replacements like protein bars, first aid supplies and over-the-counter meds are things to keep handy for your health and wellness journey.

How do the Discover it Cash Back bonus categories compare to Chase Freedom Flex℠ categories?

If you like the way the Discover it Cash Back lets you earn bonus rewards in categories that change every three months, you should also check out the Chase Freedom Flex. This cash back credit card also offers 5 percent back on up to $1,500 you spend in combined purchases in rotating bonus categories each quarter after activation (then 1 percent), as well as at least 1 percent back on other purchases.

You also earn 5 percent back on travel you book through Chase Ultimate Rewards, 5 percent on Lyft rides (through March 2022), 3 percent back on drugstore and dining purchases and 1 percent on everything else.

Unlike the Discover it Cash Back, however, Chase doesn’t announce its full calendar of categories at the beginning of each year, so you can’t plan your spending as carefully. Here are the 2021 Chase Freedom Flex categories announced so far:

  • Q1 (January through March): Wholesale clubs, internet, cable and phone services and select streaming services
  • Q2 (April through June): Gas stations and home improvement stores
  • Q3 (July through September): Grocery stores (excluding Walmart and Target) and select streaming services
  • Q4 (October through December): Walmart and PayPal

How do the Discover it Cash Back bonus categories compare to Citi Custom Cash℠ Card categories?

Instead of worrying about activating rotating categories each quarter, the new Citi Custom Cash Card automatically earns you 5 percent cash back on your top spending category each billing cycle (up to $500, then 1 percent back) out of a roster of 10 possible year-round categories.

This new approach to 5 percent cash back gives you the flexibility of rotating categories and adds the consistency of set bonus categories. This means you probably won’t have to strategize your spending every few billing cycles or hope you can maximize each quarter’s categories, and there is a wider variety of bonus categories specifically geared toward everyday spending:

  • Restaurants
  • Gas stations
  • Grocery stores
  • Select travel
  • Select transit
  • Select streaming services
  • Drugstores
  • Home improvement stores
  • Fitness clubs
  • Live entertainment

Although both issuers’ cards have the same total spending cap per quarter, the 5 percent category’s $500 spending cap per billing cycle can be more restrictive than Discover’s $1,500 spending cap per quarter—especially if you have big purchases, emergency expenses or cycles with lighter spending that would throw off your rewards planning. It may also be easier to maximize your 5 percent spending cap with Discover since it usually offers two to three bonus categories per billing cycle instead of a single category to max out each time.

However, it can be easy to hit your 5 percent category’s ceiling in one particular category each cycle if you use the Citi Custom Cash Card as your primary credit card. Some of its categories are costlier than others—like groceries, gas, restaurants and travel—so you might not see rarer categories like live entertainment in action unless you have another rewards card to cover these big-budget expenses. If you want cash back in more brand-specific or specialized categories such as online shopping with Amazon, Walmart or Target, the Discover it Cash Back may be the better option.

Before choosing your cash back card, you should compare your budget to both Discover’s and Citi’s 5 percent categories to see which list better suits your spending. Be sure to factor in how often you’d be able to hit each issuer’s 5 percent spending cap in order to see which would earn you the most cash back with the least stress.

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 lets you redeem rewards for cash back into a bank account or purchases you make through Amazon.com or PayPal.com in any amount.

You can also redeem your rewards for a gift card 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 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.

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 card makes it easy to earn rewards without an annual fee, but you’ll get more out of your card if you pay attention to the rotating bonus categories it offers. This is especially true during the first year you’re a cardmember since Discover will match all the rewards you earn during those first 12 months.

Just be sure to activate your bonus rewards each quarter so you don’t miss out.

Written by
Aja McClanahan
Personal Finance Writer
Aja McClanahan is an author, blogger and speaker on personal finance and entrepreneurship. Aja is the author of "How a Mother Should Talk About Money with Her Daughter."
Edited by
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