The Discover It is a great credit card for earning cash back. Like the Chase Freedom, it earns 5% cash back on quarterly rotating categories. The current categories are Gas Stations, Uber, Lyft, and Wholesale Club purchases. These categories will remain until June 30, 2020. Thereafter, the Discover It 3rd Quarter categories will be active.
Those who received the ”up to 2% bonus cash for the next 12 months” Discover It promotion in either late December 2019 or early January 2020 will receive up to 7% cash back within the bonus categories. Plus, they will receive up to 3% cash back on non-bonus spend. This is something to consider if you took advantage of it.
What’s Going On?
The Discover It 3rd Quarter categories for 2020 are Dining and PayPal purchases! Both categories are excellent ways to earn cash back, especially for those who do not have a high-earning dining card.
Dining is one of the most popular and competitive bonus categories among credit cards. There is a plethora of cards that earn transferrable points for takeout and food delivery services. However, Discover’s 5% cash back will beat most of them, depending on how you value your points.
Furthermore, PayPal is another easy way to maximize the 5% categories. All you have to do is link your Discover It card to your PayPal account and use the PayPal account to make purchases. This is another way to earn up to $75 in cash back, especially for those who have a high-earning dining card.
Which Cards Will Rival the Discover It Next Quarter?
The Discover It will earn 5% (or up to 7% with the promotion) cash back within the categories. However, there are a few cards that earn the same rate (or better):
American Express Gold Card
The American Express Gold Card earns up to 4x Membership Rewards (MR) points on Dining and Groceries. It also earns 3x MR points on travel from amextravel.com and one point per dollar on non-bonus spend.
This golden charge card has a $250 annual fee. But that fee is countered by $220 in total annual credits. The Gold Card offers $100 in airline incidental credits and $120 in monthly dining credits. These credits can be nice if you frequently dine at one of the qualifying restaurants.
The Gold Card beats the Discover It if you value UR points at 1.25 CPP (cents per point) or more. Most travelers value MR points at this value or greater. Therefore, they should use the Discover It for PayPal purchases next quarter.
Chase Sapphire Reserve
Nonetheless, the Chase Sapphire Reserve is a great alternative to the Discover It and the Amex Gold Card for dining purchases. It earns 3x Ultimate Rewards (UR) points on Dining and General Travel, including Uber purchases.
But that is not all! 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.
The Sapphire Reserve beats the Discover It if you value UR points at 1.67 CPP (cents per point) or more. Those who value UR points at this value or greater should use the Discover It for PayPal purchases next quarter. Otherwise, the Discover It can replace the Sapphire Reserve in your wallet.
Final Draw
Discover It cardholders can register here for the 3rd quarter categories. The first day of registration is today, May 1.
Remember to calculate your break-even point on your normal dining credit 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 July 1.
