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 Grocery Stores, CVS Pharmacy, and Walgreens Pharmacy purchases and the categories don’t switch until April 1.
Those who received the ”up to 3% bonus cash” Discover It promotion in either late December or early January will receive up to 8% cash back within the bonus categories. Plus, they will receive up to 4% cash back on non-bonus spend. This is something to consider if you took advantage of it.
What’s Going On?
Discover’s primary 2nd Quarter category for 2020 is Gas Stations! Plus, Discover has Uber, Lyft, and Wholesale Club purchases as secondary categories. This is a wide array of categories that are great for transportation.
Gas Stations is a popular category for both travel and cash back cards. There is a plethora of cards that earn transferrable points at the pump. However, Discover will beat some of them, depending on how you value your points.
Uber and Lyft are two of the biggest ride-sharing services in the travel industry. Earning 5% on those purchases is nice. But there are several travel cards that earn 3x points for these expenses. And oftentimes, the points are more valuable than the cash back.
Wholesale Clubs are a secondary category because not all of them accept Discover. Unfortunately, Costco (one of the biggest wholesale clubs) only accepts Visa cards. But Sam’s Club and other wholesale clubs accept Discover. However, there is a workaround for Costco lovers. You can purchase gift cards online at Costco’s website using a Visa, MasterCard, or Discover Card.
Which Cards Will Rival the Discover It In the 2nd Quarter?
The Discover It will earn 5% (or up to 8% with the promotion) cash back within the categories. However, there are a few cards that earn the same rate (or better):
Citi Premier
The Citi Premier checks the most boxes to rival the Discover It in the second quarter. It earns 3x Thank You (TY) points on General Travel, including Gas, Uber, and Lyft. Plus, it earns 2x TY points on Dining and Entertainment purchases and one point per dollar on non-bonus spend.
Chase Sapphire Reserve
The Chase Sapphire Reserve is another great alternative to the Discover It, especially for Uber and Lyft purchases. It earns 3x Ultimate Rewards (UR) points on Dining and General Travel, including Uber purchases. However, Chase is currently having a promotion that lets Sapphire Reserve cardholders earn 10x UR points on Lyft purchases. This is better than any card in the industry for Lyft lovers.
American Express Business Gold Card
Furthermore, the American Express Business Gold Card earns up to 4x Membership Rewards (MR) points on two categories of choice. One of the eligible categories is Gas Stations. However, the Business Gold Card will earn you just one point per dollar on the Discover It’s secondary categories. Business owners or entrepreneurs with heavy gas bill and a desire for MR points should look at this card.
Final Draw
Discover It cardholders can register here! The first day of registration is today, February 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 April 1.
Even online Costco does not accept Amex.
Hi Bill,
Thanks for reading PYCR and pointing out that error. I changed the post to reflect this.
Best Regards,
Anthony