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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 during 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 5% cash back calendar for 2023
Discover’s cash back bonus categories change each quarter, allowing cardholders to consistently choose the categories in which they’ll earn 5 percent 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, grocery stores has stayed as a consistent category over the last three years. However, for Q1 2023, fitness clubs and gym memberships were replaced with drug stores and select streaming services.
Unlike previous years where Discover released all of its cash back categories at once, the issuer is taking a new approach by releasing categories one quarter at a time — in line with how Chase releases its bonus categories. This change is likely an unwelcomed 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 card 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 Q1’s bonus categories
In the first quarter of 2023 — January through March — you can earn 5 percent back at grocery stores, drug stores and on select streaming services, 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 your pantry. Purchasing groceries at places like supermarkets, your local grocer, bakeries and through grocery delivery services counts toward this category, though purchases at wholesale clubs and places like Walmart and Target will not. Five percent back on groceries is one of the highest rates on the market — outside of cards like the Blue Cash Preferred® Card from American Express, which offers 6 percent cash back on U.S. supermarket purchases (up to $6,000 per year, then 1 percent) — so be sure to pull out the Discover it Cash Back whenever you grocery shop this quarter.
- Link your card to your streaming service accounts. You can earn heightened cash back on more than just video streaming services like HBO Max and Amazon Prime Video. Services like Google Play, YouTube Music, iHeartRadio and Spotify also count toward this category.
- Make miscellaneous purchases at drugstores. Need to pick up a case of beer? Have a few birthday cards you need to send out? Outside of picking up prescriptions, there are more than a few ways you can maximize this category with spending you’d do normally.
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 the 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 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 during those first 12 months. Just be sure to activate your bonus rewards each quarter so you don’t miss out.