2021 Discover it® Cash Back Categories: 5% on Groceries, Gas, and More
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The Discover it® Cash Back credit card offers 5% cash back in categories that rotate every three months, for no annual fee. You need to activate your 5% categories ahead of time, and you’ll have to deal with a quarterly spending limit.
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Discover it® Cash Back cardholders, rejoice! You can earn rewards at a great rate for no annual fee, and you can plan out your spending for the whole year.
From July through September, you can earn 5% cash back at:
- Restaurants
- PayPal
But take note of the details:
- The 5% cash back categories will rotate every quarter (every three months).
- The 5% cash back rate is limited to the first $1,500 in combined spending per quarter; after that you’ll earn 1%.
- You’ll need to activate the categories before you can start earning at the 5% rate (you can do so two months early).
You can visit Discover’s website to activate your categories right now.
- Min. credit levelGood
- Annual Fee$0
- Regular APRSee Terms
- 5% cash back in rotating categories (up to $1,500 spent per quarter, then 1%; activation required):
- January – March: Grocery Stores, Walgreens, CVS
- April – June: Gas Stations, Wholesale Clubs, Select Streaming Services
- July – September: Restaurants, PayPal
- October – December: Amazon.com, Target.com, Walmart.com
- 1% cash back on all other purchases
Introductory bonus
A balance transfer is a way to move debt from one card to another with the goal of saving money on interest.
- Intro Balance Transfer APRSee Terms for See Terms
- Regular Balance Transfer APRSee Terms
- Balance Transfer FeeSee Terms
- Penalty APRN/A
- Late FeeSee Terms
- Returned Payment FeeSee Terms
- Additional Cards Annual FeeN/A
- Foreign Transaction FeeNone
Insider tip
The Discover it® Student Cash Back (Review) is very much like the regular Discover it Cash Back card. All the 5% bonus category info here also applies to the student version, though we’ll refer to the non-student card for the most part in this post.
Discover it Cash Back 2021 Calendar
Discover comes out with a new cash back calendar every year, though some categories (like grocery stores, gas stations, restaurants, and Amazon) usually make repeat appearances.
Here are the 5% categories for 2021, along with last year’s for comparison.
| Quarter | 2021 Categories | 2020 Categories |
|---|---|---|
| January – March |
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| April – June |
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| July – September |
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| October – December |
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Insider tip
Discover is good enough to release the entire calendar for the year, usually a bit before the previous year ends. This gives you some time to plan out your spending, and if you’re considering applying for the card, you can see how useful it will be in that first year. Of the other 5% rotating category cards of note, the Chase Freedom Flex℠ (Review), releases the next quarter’s categories only a few weeks before the quarter begins. And the U.S. Bank Cash+™ Visa Signature® Card (Review) lets you choose your own 5% categories each quarter.
How Do You Make the Most of This Quarter’s Bonus Categories? Restaurants, PayPal
- Your card for dining out and ordering in: When you think restaurant, think Discover. If you don’t like to cook, it probably won’t be too hard to hit this quarter’s $1,500 limit. Full-service restaurants, cafes, cafeterias, and fast food locations are eligible.
- PayPal is everywhere: You can check out with PayPal at a wide variety of merchant sites, including superstores like Walmart and Target. Set your Discover card as your default PayPal payment method, and remember to look for the PayPal logo when making purchases online. In-person PayPal payments, using PayPal here, are eligible too.
- Send money to family and friends, but watch out for fees: You’ll even earn 5% cash back on money sent to family and friends with your Discover card via PayPal. Just be aware of any fees you may be charged.
- Use the full $1,500 spending limit: You shouldn’t buy anything you weren’t planning on already, but 5% cash back is an excellent rate, better than you’re likely to get with other cards, so aim to use up the whole limit. If you have room left over, consider buying gift cards at restaurants, or anywhere that accepts PayPal, to use throughout the year.
Discover it Cash Back Reward Categories: What Do You Need to Know?
- From July through September 2021, the second quarter of the year, eligible Discover it® Cash Back (Review) cardholders can earn 5% cash back at restaurants and for PayPal purchases.
- The 5% cash back rate is limited to $1,500 in combined spending per quarter; after that, 1% will be earned.
- Categories must be activated before 5% cash back can be earned; only purchases made after activation will count. You can activate up to two months in advance.
- You can set up email alerts with Discover to remind you to activate the categories, so you’ll be notified well ahead of time. (Discover may send automatic emails as well.)
- Q3 bonus categories can be activated starting on May 1.
- All purchases outside the bonus categories will earn 1% back.
A Quick Overview of the Discover it Cash Back
- Cashback Match: Discover is famous for offering double cash back in your first year, giving you an equivalent of 10% cash back in the bonus categories and 2% cash back everywhere else — one of the most rewarding offers in the game. The cash back bonus is added at the end of your first year.
- FICO Credit Scorecard: Check out the status of your FICO Score 8 whenever you’d like, based on your TransUnion credit report.
- Social Security number alerts: Get notified if your SSN is found on any thousands of risky dark web sites.
- New account and inquiry alerts: Get alerts if any new accounts or credit inquiries show up on your Experian credit report.
- Purchase and Balance Transfer APR: See Terms for See Terms, then See Terms
- No foreign transaction fee
- Annual fee: $0
The Discover it Cash Back has a set of features that matches most other Discover cards, with common benefits like the Credit Scorecard and SSN/new account alerts. You’ll get a nice intro purchase APR in case you need to stretch out your spending a bit, along with a good balance transfer offer (but this card is meant mainly for earning rewards on purchases).
How Can You Make the Most of Your Discover it Cash Back Rewards?
The cash back you earn can be redeemed for statement credits or direct deposits, which are the easiest methods. The amount redeemed will just be credited to your card account, or sent to your bank account.
But Discover will give cardmembers a bonus on gift card redemptions, making that the most valuable redemption method. You’ll get at least $5 added to each gift card redemption, and sometimes $10 or even more.
A $5 bonus on a $20 gift card is a 25% increase — pretty significant, and worth exploring. (Some other reward programs, like Amex Membership Rewards and Chase Ultimate Rewards, have better redemptions for travel.)
Gift cards take a bit more time and effort to use, however. You can get digital gift cards in some cases, but have to wait for a physical card to be mailed in others. And then you need to actually have a purchase in mind at the associated store (or they could be good gifts).
So if you’re looking for easy cash back, statement credits or bank account deposits are probably the right moves. But browse the gift card selection, too; if you’ve got an upcoming purchase, or shop at any of those stores with regularity, a gift card will give you more bang for your buck.
Cards to Use With the Discover it Cash Back
The Discover it Cash Back’s rotating categories give it some variability over the course of a year, which could prove useful. But since its 5% categories change every quarter, you’re typically only earning a good rate on those purchases for three months out of the year.
So it’s nice to have some other cards on hand for other expenses, letting you earn a good rate no matter where or when you shop.
Citi® Double Cash Card
- Min. credit levelGood
- Annual Fee$0
- Regular APR13.99% – 23.99% (Variable)
- Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.
- To earn cash back, pay at least the minimum due on time.
- Balance Transfer Offer: 0% intro APR on Balance Transfers for 18 months. After that, the variable APR will be 13.99% – 23.99%, based on your creditworthiness.
- Balance Transfers do not earn cash back.
- If you transfer a balance, interest will be charged on your purchases unless you pay your entire balance (including balance transfers) by the due date each month.
- There is a balance transfer fee of either $5 or 3% of the amount of each transfer, whichever is greater.
- The standard variable APR for Citi Flex Plan is 13.99% – 23.99% based on your creditworthiness. Citi Flex Plan offers are made available at Citi's discretion.
- 2% cash back for every purchase (must pay at least the minimum due on time):
- 1% back when you make a purchase
- 1% back when you pay for that purchase
A balance transfer is a way to move debt from one card to another with the goal of saving money on interest.
- Intro Balance Transfer APR0% for 18 months on Balance Transfers
- Regular Balance Transfer APR13.99% – 23.99% (Variable)
- Balance Transfer FeeBalance transfer fee applies with this offer 3% of each balance transfer; $5 minimum
- Penalty APRUp to 29.99% (Variable)
- Late FeeUp to $40
- Returned Payment FeeUp to $40
- Additional Cards Annual FeeN/A
- Foreign Transaction Fee3%
Citi is a Credit Card Insider advertiser.
The Citi® Double Cash Card – 18 month BT offer (Review) is easy to recommend for general spending thanks to its flat 2% rate on every purchase (must pay at least the minimum due on time). No categories to worry about, rotating or otherwise; just pull out the Double Cash whenever you’re not spending in a Discover 5% category.
| Spending Rewards |
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Key Features
- Convert cash back rewards to ThankYou points: Your cash back can be converted into ThankYou points, and then transferred to an airline partner or certain other Citi cards.
- Citi Concierge: Call for non-emergency help whenever you need it, like assistance making travel reservations.
- ShopRunner membership: Use ShopRunner to get free two-day shipping and returns at participating retailers.
- Free credit score: Check your FICO Bankcard Score 8 for free, based on your Equifax credit report.
- Purchase APR: 13.99% – 23.99% (Variable)
- Balance Transfer APR: 0% for 18 months on Balance Transfers, then 13.99% – 23.99% (Variable)
- Annual fee: $0
Chase Freedom Flex
- Min. credit levelGood
- Annual Fee$0
- Regular APR14.99% - 23.74% Variable
- Earn a $200 Bonus after you spend $500 on purchases in your first 3 months from account opening.
- Earn 5% cash back on grocery store purchases (not including Target® or Walmart® purchases) on up to $12,000 spent in the first year.
- Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate. Enjoy new 5% categories each quarter!
- Earn 5% on Chase travel purchased through Ultimate Rewards®, 3% on dining and drugstores, and 1% on all other purchases.
- No annual fee.
- 0% Intro APR for 15 months from account opening on purchases, then a variable APR of 14.99 - 23.74%.
- No minimum to redeem for cash back. Cash Back rewards do not expire as long as your account is open.
- 5% cash back on:
- Travel purchased through Chase Ultimate Rewards
- Lyft rides (through March 2022)
- Grocery store purchases (not including Target or Walmart) up to $12,000 spent in the first year
- 5% cash back in rotating categories, up to $1,500 in spending each quarter, then 1%
- 3% cash back at:
- Restaurants
- Drugstores
- 1% cash back on all other purchases
Introductory bonus
A balance transfer is a way to move debt from one card to another with the goal of saving money on interest.
- Intro Balance Transfer APRN/A for N/A
- Regular Balance Transfer APR14.99% - 23.74% Variable
- Balance Transfer FeeEither $5 or 5% of the amount of each transfer, whichever is greater
- Penalty APRUp to 29.99%
- Late FeeSee Terms
- Returned Payment FeeSee Terms
- Additional Cards Annual FeeN/A
- Foreign Transaction Fee3% of each transaction in U.S. dollars
The information related to Chase Freedom Flex℠ has been collected by Credit Card Insider and has not been reviewed or provided by the issuer or provider of this product.
You might say that two 5% rotating category cards is too much (and you might be right). But credit card aficionados might enjoy having two different sets of 5% cash back categories throughout the year.
The Chase Freedom Flex℠ (Review) is similar to the Discover it Cash Back. It’s got the same $1,500 quarterly limit, and you need to activate your categories. But with the Freedom Flex, after you activate you’ll earn 5% back on every eligible purchase you made throughout the quarter, even purchases made before you activated. Those rewards will be retroactively added to your account.
In 2019 there was no overlap between the Discover and Chase category calendars at all. If you had both cards you would’ve had a wealth of 5% opportunities all year. But Chase only releases the Freedom Flex’s upcoming categories shortly before they’re available, making it difficult to plan.
| Quarter | 2020 Categories | 2021 Categories |
|---|---|---|
| January – March |
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| April – June |
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| July – September |
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| October – December |
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The Freedom Flex also provides some other great rewards, in addition to its quarterly bonus categories:
- 5% cash back on:
- Travel purchased through Chase Ultimate Rewards
- Lyft rides (through March 2022)
- 3% cash back at:
- Restaurants
- Drugstores
- 1% cash back on all other purchases
Key Features
- Introductory bonus: $200 bonus for spending $500 in the first 3 months
- Shop through Chase/Chase Offers: Earn extra cash back and find discounts with select retailers.
- Chase Credit Journey: Monitor your credit with free access to your VantageScore 3.0, based on your TransUnion credit report, and receive helpful insight into the factors influencing the score.
- Shopping and travel protections: Purchase protection, extended warranty protection, travel and emergency assistance services, roadside dispatch, auto rental collision damage waiver
- Purchase APR: 0% for 15 months, then 14.99% - 23.74% Variable
- Balance Transfer APR: 14.99% - 23.74% Variable
- Annual fee: $0
U.S. Bank Cash+™ Visa Signature® Card
- Min. credit levelGood
- Annual Fee$0*
- Regular APR13.99% - 23.99%* Variable
- Earn up to $550 cash back in the first year.
- $150 bonus after spending $500 in eligible net purchases within the first 90 days of account opening.
- 5% cash back on your first $2,000 in combined eligible net purchases ($100 per quarter) on two categories you choose. That adds up to $400 cash back!
- 2% cash back on your choice of one everyday category, like gas stations or grocery stores.
- 1% cash back on all other eligible net purchases.
- No limit on total cash back earned.
- 0% Intro APR* on balance transfers for 12 billing cycles. After that, a variable APR currently 13.99% - 23.99%
- No annual fee*
- Great Offer from U.S. Bank, a 2020 World's Most Ethical Company® - Ethisphere Institute, February 2020
- 5% cash back on your choice of two bonus categories (up to $2,000 in combined net purchases per quarter)
- 2% cash back on your choice of one everyday category:
- Gas
- Groceries
- Restaurants
- 1% cash back on everything else
Introductory bonus
A balance transfer is a way to move debt from one card to another with the goal of saving money on interest.
- Intro Balance Transfer APR0%* intro on BTs for 12 billing cycles on Balance Transfers*
- Regular Balance Transfer APR13.99% - 23.99%* Variable
- Balance Transfer Fee3%
- Penalty APRN/A
- Late FeeUp to $40
- Returned Payment FeeUp to $35
- Additional Cards Annual Fee$0
- Foreign Transaction Fee2% of each foreign purchase transaction or foreign ATM advance transaction in U.S. Dollars 3% of each foreign purchase transaction or foreign ATM advance transaction in a Foreign Currency
Here’s another 5% cash back category card, with a sweet twist: You get to choose two of your own 5% categories (and a 2% category!) each quarter, giving you unmatched flexibility as your spending habits change throughout the year.
The categories include some rare finds that Discover doesn’t usually cover, like electronics stores, streaming services, and department stores. There are even perpetually useful categories like cell phone providers and home utilities (very rare finds). It’s one of the best credit cards for some of those expenses.
With Discover, you’re stuck with whatever they’ll give you; but the Cash+ lets you adjust as the year progresses, so you can set up the perfect categories to complement the Discover rewards calendar.
| 5% Cash Back Categories (Pick Two) | ||
|---|---|---|
| Ground Transportation | Fast Food | Cell Phone Providers |
| Department Stores | Home Utilities | Select Clothing Stores |
| Electronics Stores | Sporting Goods Stores | Movie Theaters |
| Gyms/Fitness Centers | Furniture Stores | TV, Internet & Streaming Services |
| 2% Cash Back Categories (Pick One) | ||
|---|---|---|
| Gas Stations | Grocery Stores | Restaurants |
- Introductory bonus: $150 cash bonus for spending $500 in the first 90 days after account opening
- Free credit score: See your VantageScore 3.0 based on your TransUnion credit report.
- Visa Signature Concierge: Call for personal assistance with travel bookings, dining reservations, business services, and more.
- Visa Signature Luxury Hotel Collection: Get perks at select hotels like a $25 food and beverage credit and room upgrades when available.
- Shopping and travel protections: Purchase security, extended warranty, auto rental collision damage waiver, roadside dispatch
- Purchase APR: 13.99% - 23.99%* Variable
- Balance Transfer APR: 0% for 12 billing cycles on Balance Transfers*, then 13.99% - 23.99%* Variable
- No foreign transaction fee
- Annual fee: $0*
Learn More About the Discover it Cash Back
Excited? We covered the major card features here, but you can dig deeper in our Review of the Discover it® Cash Back Credit Card.
Just don’t forget the main rule when it comes to the rewards: Activate your cash back categories before each quarter starts, because you won’t start earning at the 5% rate until you do. Consider setting up Discover’s email alerts, or set your own reminders.
- Min. credit levelGood
- Annual Fee$0
- Regular APRSee Terms
- 5% cash back in rotating categories (up to $1,500 spent per quarter, then 1%; activation required):
- January – March: Grocery Stores, Walgreens, CVS
- April – June: Gas Stations, Wholesale Clubs, Select Streaming Services
- July – September: Restaurants, PayPal
- October – December: Amazon.com, Target.com, Walmart.com
- 1% cash back on all other purchases
Introductory bonus
A balance transfer is a way to move debt from one card to another with the goal of saving money on interest.
- Intro Balance Transfer APRSee Terms for See Terms
- Regular Balance Transfer APRSee Terms
- Balance Transfer FeeSee Terms
- Penalty APRN/A
- Late FeeSee Terms
- Returned Payment FeeSee Terms
- Additional Cards Annual FeeN/A
- Foreign Transaction FeeNone
Brendan Harkness
Brendan has been writing about personal finance for over eight years, and is now taking on the challenge of bringing high-quality credit education to the masses. He makes sure that Credit Card Insider is covering the most important credit topics transparently and precisely, and that we have up-to-date reviews of credit cards so you can find cards that are right for you.
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