For many travelers, cash back is a solid alternative to transferrable points, airline miles, and hotel points. It can cover atypical travel expenses that these points can’t cover. Some of these expenses include AirBNB rentals, local commuter transit, and (for some) private jets.

The Discover It is a great option for cash back and they have released their 3rd Quarter categories on May 1. Like the Chase Freedom, it earns 5% cash back on quarterly rotating categories. The current categories are Gas Stations, Uber, and Lyft and the categories don’t switch until July 1.


What’s Going On?

Discover’s 3rd Quarter categories for 2019 are Restaurants and PayPal transactions! While PayPal is not that common a category, it can still be useful for some.

But Dining is a very popular category for both travel and cash back cards. Most people who care about points and miles will have at least one dedicated dining card in their wallet. But is the 5% from the Discover it enough to take that card’s place for three months?

The answer depends on which cards you have. If you prefer cash back, the answer is a resounding “yes”. However, the answer is not so clear for those who collect transferrable points. It depends on how you value your points.

Break-Even Calculations & Examples

To calculate the break-even point, divide 5 by the dining category multiplier on your normal dining card. The quotient will be in cents per point (CPP).

For example, if you have the American Express Gold Card, you earn 4x Membership Rewards (MR) points at Restaurants. The break-even is 1.25 CPP, or 5x / 4x. This means that you should keep using the Gold Card if you value MRs at 1.25 CPP or more.

Another example is the Chase Sapphire Preferred, which earns 2x Ultimate Rewards (UR) points at Restaurants. This card’s break-even is 2.5 CPP, or 5x / 2x. This means that you should keep using the Reserve if you value MRs at 2.5 CPP or more.

For Citi Thank You (TY) point fans, here’s the Citi Prestige. This card earns a whopping 5x TY points at Restaurants, making this calculation easy. The Prestige’s break-even is a low 1 CPP, which is the same valuation is cash back. In other words, don’t register if you have the Citi Prestige.


Final Draw

Discover It cardholders can register here! The first day of registration is today, May 1.

Remember to calculate your break-even point on your normal dining card 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.