For many travelers, cash back is a solid alternative to transferrable points, airline miles, and hotel points. It can cover atypical travel expenses that transferrable points can’t cover. Some of these expenses include AirBNB rentals, local commuter transit, and tolls. The Discover It is a great option for cash back. Like the Chase Freedom, it earns 5% cash back on quarterly rotating categories. The current categories are Restaurants and PayPal purchases and the categories don’t switch until October 1.
What’s Going On?
In true Discover fashion, Discover’s primary 4th Quarter category for 2019 is Amazon.com! Moreover, Discover also has Target and Walmart.com as secondary categories. Holiday shopping is a great way to earn extra cash back with the Discover It. Fortunately, Discover has selected three huge merchants to earn 5% starting in October.
Amazon is a popular category for both travel and cash back cards. Chase and American Express both have co-branded cards with the online giant. However, Amazon is not popular enough where most consumers have a co-branded card in their wallet. This is where the Discover It comes into play.
Furthermore, not everyone shops at Target or Walmart. And only those who are loyalists to the big-box retailers would have a Target Red Card or a Walmart card. Normally, the best way to earn points at these stores is using a flat rate card. But categories like these is why some people have 5% rotating cards. Great categories come at the right time of year and earning extra rewards becomes easy.
Note that the Walmart category only applies to Walmart.com and not brick and mortar retailers. The Target category does work with brick and mortar retailers. Discover has had Target as a category in the past and I have used my card at Target to earn 5% cash back.
Which Cards Will Rival the Discover It In the 4th Quarter?
The Discover It will earn 5% cash back within the three categories. However, there are a few cards that earn the same rate (or better):
Chase Amazon Prime Card
Like the Discover It, the Chase Amazon Prime Card earns 5% cash back on Amazon.com purchases and at Whole Foods grocery stores. However, the Chase card also earns 2% back at Gas Stations, Pharmacies, and Restaurants. It has no annual fee besides the Amazon Prime annual fee, which is $119.
Alternatively, non-Prime members should simply use the Discover It. The regular Chase Amazon Card only earns 3% back on Amazon.com purchases and at Whole Foods.
Target Red Card
This card will not help you save money for travel, but it does save you 5% on all purchases at Target. The Target Red Card comes in two ways: as a traditional credit card and as a reloadable debit card.
Despite the equal earning opportunities, the Discover It has a slight edge. Cash back earned with the Discover It can be redeemed in multiple ways as opposed to the 5% discount with the Red Card. For this reason, I would use the Discover It for the first $1,500 spent at Target during the 4th Quarter. Thereafter, I would switch back to the Red Card.
Discover It cardholders can register here! The first day of registration is today, August 1.
Remember to calculate your break-even point on your normal Amazon, Target, and Walmart cards before deciding to register. If your break-even point is more than your valuation of that card’s points, sock drawer the Discover card. Otherwise, register today and start using your Discover It on October 1.