Discover It and Discover More cardholders know just how rewarding the 5 percent Cash Back Rewards program can be over the course of a year; but with a rotating calendar of bonus categories, it does take some planning. Cardholders can earn 5 percent cash back on purchases up to $1,500 of spending in the bonus categories which rotate every quarter.
Knowing what categories are coming up is the key to planning your spending and maximizing your cash back rewards. So when Discover publishes its rewards calendar for the year ahead, it pays to map out your spending plan.
How Discover Bonus Cash Back Rewards Work
For the Discover It and More cards, cardholders can earn 5 percent cash back on purchases made within the current quarter’s spending categories. Once the $1,500 spending cap is reached, the cash back reward drops to 1 percent, which is the typical amount of cash back earned on all purchases. To earn the 5 percent cash back, cardholders must activate the bonus reward for the quarter ahead, or they will only earn 1 percent cash back.
It’s not uncommon for cardholders to forget to activate the bonus categories. So it is highly recommended that, once the Discover cash back calendar becomes available, you set a reminder on your online or smartphone calendar for the beginning of each quarter – Jan 1st, April 1st, July 1st and Oct 1st.
Making the Discover Calendar Work for Maximum Cash Back
For many Discover cardholders, especially those new to the concept of rotating bonus categories, the difficult part is creating a spending plan that aligns with the Discover cash back calendar. The idea is to build $1,500 of spending into your budget that can take place in each quarter’s categories without spending beyond your actual needs. You don’t want to spend extra money solely for the purpose of earning 5 percent cash back because that would negate the gains you make with the cash back rewards.
It just so happens that the Q4 spending category for 2017, which included Amazon.com and Target, aligns perfectly with holiday spending. Between the Thanksgiving and Christmas holidays, it shouldn’t be too difficult to spend $1,500 for food and gifts. But if you find yourself nearing the end of the quarter and you are short of the cap, you could always purchase Amazon or Target gift cards, which can be used in the months ahead.
The Discover calendar for 2018 is laid out as follows:
- Q1 (Jan – March): Gas Stations & Wholesale Clubs
- Q2 (April – June): Grocery Stores
- Q3 (July – Sept): Restaurants
- Q4 (Oct – Dec): Amazon.com and Wholesale Clubs
So you can potentially maximize your food spending at the wholesale clubs and grocery stores during the first, second, and fourth quarters. You can also buy groceries through Amazon.com. If you can’t spend $1,500 dining out in the third quarter, purchase some restaurant gift certificates that can be used throughout the year. Again, you shouldn’t spend anymore than your budget allows for each category, so it might take extra planning and some discipline if you are going to purchase gift cards or certificates for later use.
How About Long-Term Planning With the Discover Calendar?
Discover only publishes its bonus category calendar for the coming year. But if you want to do some long-range planning, you can make some fairly safe assumptions. For example, Discover has made gas stations its first quarter category for the last three years, and restaurants have been its third quarter category each of those years as well.
And it typically includes Amazon.com in its fourth quarter category. Discover does change things up once in awhile. For instance, in 2016, home improvement stores were its second quarter category. In 2017, it was its third quarter category, and in 2018, it isn’t a category at all. Discovery typically publishes the following year’s calendar around May or June of each year.
Combine Rewards Programs for Maximum Cash Back
To maximize your cash back rewards throughout the year, you could consider combining your Discover It or More card with another cash back rewards card. For example, some rewards cards pay 3 percent cash back on gas and grocery purchases throughout the year. You can use your Discover card during the first quarter and your other rewards card the rest of the year to optimize your total yearly cash back rewards. Also, there’s a student grade program offered by Discover, so you could take advantage of that.
Take Advantage of Discover’s Cash Back Match
If you are planning on obtaining a Discover It or More card for the first time, you can take advantage of Discover’s Cashback Match program. After the first 12 consecutive billing cycles, Discover will automatically match all the cash back you earn during that period. That includes the cash back earned on your 5 percent bonus categories as well as your normal 1 percent cash back. That makes it very worthwhile to plan out your spending using the Discover calendar to maximize your total cash back earnings.
Author: Jeff Gitlen
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