How the Discover Card Cash Back Bonus Works

Note: Restaurant Promotion has now ended. (come back for future promotions)

I am sure most of you have Discover Cards and if you do not you need to get one for their fun promotions where you can earn lots of money in cashback. A Discover Gasoline Credit Card then it will bring in full 5% back (up to $1500 a year in gas purchases). Discover also adds on the extra percentage that you are earning for your current level of spending as they refer to as their regular “up to 1% cash back”. Meaning if you make a gas purchase on your discover card you earn your “up to 1% back” which is normally around .25% if you have only spent under $1500 on your card plus the 4% of the amount you spent at the gas station. This can make your gas purchases add up to 5% cash back.

Okay now to the Restaurant purchases. You also have to call Discover or register online for this promotion as well and it is totally free to do so. If you call in just press the buttons for the restaurant promotion which gets you up to 5% back in the same way as gas purchases. It works at places obviously that take the Discover Card and those may not be as many as you are used to using with your AMEX or Visa/MC. The restaurants include fast food, dine out, and any merchants that use the coding for restaurant on their credit card transactions. This promotion ends October 31 but the gas card is ongoing.

I don’t advise anyone use Discover Card for any other purchases besides gas stations, restaurants, or Sam’s Club. It only pays .25% back to most customers on all other purchases and is not as valuable as having a Chase Perfect Card to get your 1% back on all purchases.

Spend more get more then Spend less get more with Discover Gas Card. If you go over $1500 in gas purchases it goes to a lower percentage of cash back. So if you spend over $1500 a year with the Gas Card then switch to another gas credit card that pays rebates with no limits.

Up to 10% Marketing?

Discover claims you can earn up to 10% on the gas and restaurant purchases but that pertains to redemption of the up to 5% then you have a chance to double it with one of their partners. I would just not pay attention to the marketing of the up to 10% and focus on the up to 4% or 5% and you will be ok. Let us help you with the marketing confusion and help you choose the right credit card to use for the right purchase!

When considering a cash back card you must consider a few things: 1. Define the limits to get what cash back percentage 2. What stores or retailers do I get my rebate at? 3. Do they mean rebates at only online retailers or a walk-in business/shop. Some cards like the Motley Fool Visa is for online retailers only to get your rebate, iCard from Chase works the same way. These cards do you NO good i?f your buying things elsewhere besides online. Another example is if you have a gas station credit card and use it at BP and its a Shell Card then that does nothing for you as a Shell rebate of 5%. 4. What is the maximum amount you can get per month or year on your cash back? An example would be the Citibank Citgo Visa from Associates Bank where you have a $40 limit of rebate per month and the Discover Card which caps their new grocery “up to 10% promotion” at ONLY $1500 in groceries.

Heres how these Discover card bonuses work:

Spend Less? The Discover Gas Credit Card works great for people who spend LESS per year on their Discover Card purchases, where you get an immediate 1% on all purchases and a 5% rebate on gas purchases. Now keep in mind this is for people who do not spend over $1,500 a year. This card actually rewards for purchasing less because once you reach $1,500 in gas purchases you only get 3% cash back on gas, and spend $1,500 on other purchases you cash back goes down to .05 (in half). It then goes down again at $3,000 to 1% on gas purchases and .25% on other purchases. Keep in mind the gas and other purchases are divided differently.

Spend More? Then it will pay you more to use the traditional Discover Card where when you spend up to $1,500 you start out each anniversary date at .25%, spend more to $1,500 arrive at .50%, then get promoted to the goal of 1% at $3,000 in purchases.

April 2004 Restaurant Cash Back Article ( exclusive)

You have seen the TV ads recently for up to 10% back on groceries, and all the “ups to” a certain percent. Discover Card and American Express are both cards you have to search and search for the fine print of what the “up to” really means. We have investigated this and found out some interesting facts.

Up to 10% on Groceries? Yes you can if you buy from their selected grocery stores. The real 10 percent only comes into effect when your cash back gets doubled at the end of the promotion (when you are sent your redemption information). To enroll in this offer you must call Discover, sign up online, or apply for one of their cards and the offer is for six weeks from the day you start the promotion – it then expires and you can redeem your bonus on grocery purchases six weeks after it expires. An example of the up to 10% on groceries works like the chart below. If you are a Tier I Discover cardholder meaning you have spent up to $1,500 on any purchases then your earning .25%, the grocery promotion then adds on an extra 4% making it .25 + 4.0 = 4.25% plus your double bonus offers at the end of the promotion making it 8.50 percent.

Tier % Tier Grocery Promotion % Grocery Total %
Tier I (up to 1500 purchases) .25% 4% 4.25%
Tier II (over 1500 purchases) .50% 4% 4.50%
Tier III (over 3000 purchases) 1% 4% 5%

What “Grocery Stores” Qualify? You can only use this promotion at stores similar to Albertsons, Publix, Ralph’s, Food 4 Less, Whole Foods, etc. Not valid for grocery/food purchases made at Wal-Mart Neighborhood Markets, specialty food stores, convenience stores, gas stations, warehouse clubs (Sams Club / Costco), supercenters or discount stores.

Once a year or every month? You must decide if you want a bonus or reward for use in a lump some on an anniversary date each year of if you want it monthly. Cards like Bank Ones Cash Card and Discover are annually compared to Chase Perfect Card where you can get your rebate on “your next” statement.

Other notes on Discover Cashback Bonus: Redemptions available in $20 increments and be sure and check out other restrictions by looking up Cashback Bonus Terms and Conditions for details.

Other Credit Card related Information: Online Applications for Credit Cards, Gas Tips, Discover Credit Cards Information


Note: The following article is about an ended promotion with Discover Card but it may help with future or current promotions.