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Discover it Card: When Cash Back is Your Best Option

Earning points on credit card spend is exciting.  Sometimes points can just add up from regular every day purchases and result in a great trip.

But what happens if the trip you want cannot be bought by points?  Or if you find you are at the point where you are point-hoarding with no plans of a trip in sight?  Then you might want to start concentrating your spend on a cash back card.

I really like going to the spa.  I mean the soak-in-a-tub-for-hours-eat-figs-and-be-pampered sort of spa, not the kind you drop in for a treatment or two and leave.  I will travel to go to the spa and I’ll also go local.  I really like the DC Mandarin Oriental’s Spa and can go on vacation for the day just by getting pampered there.  I also enjoy taking in a spa experience within a more fast-paced vacation (such as the Water Club Hotel’s Immersion Spa in Atlantic City).

My card of choice for this is the Discover it® Card.  This is the second oldest credit card I’ve had and I’ve had great experiences with it.  It has no annual fee, which makes it a great occasional-use card.  Just remember that Discover Cards aren’t accepted everywhere (similar to AmEx), so always make sure to have a backup card.

The Discover it Card gives 1% Cash Back on all purchase, which is great for someone who does not want to invest in a point card at all.  But I like to leave my regular purchases to my Chase Sapphire Preferred.  What really makes the Discover Card lucrative is its Cashback Bonus and the ShopDiscover mall.

Card users earn 5% more cash back on certain items with the Discover Cashback Bonus.  For example, currently the Cashback bonus (from April-June) is 5% Cashback on Restaurants and Movies on up to $1,500 in purchases.  (That is, up to $75 cashback).  My Chase Sapphire gives me 2 points per dollar, so I find this a bit more lucrative, especially if I am saving up for another spa visit.

As an example, last year, I had the opportunity to put a $500 meal on the card during this promotion.  That gave me $25 in cash back.  I also had that card signed up for Dividends Miles Dining, and earned 5 miles per dollar on top of that.  So I ended up with $25 cash back and 2,500 miles.  Not too shabby.

The ShopDiscover mall is also a great opportunity for cash back if you are already going to purchase something from a specific store (and the points earnings aren’t so good on that).  While Keri goes through evaluating what flower delivery service to use based on points, not all types of purchases have this “luxury”.

For example, I just bought a Groupon for $300.  (I’m not normally THAT big of a Groupon spender, it was just something I was about to buy anyway).  My Chase Sapphire would earn me 2 points per dollar on this, for a total of 600 Ultimate Rewards Points.  My US Airways Mastercard comes in even lower at 1 point per dollar.  ShopDiscover offers a whopping 15% cashback for any Groupon purchasesThat’s $45!  Heck yes I put that on my Discover Card!

How do I know what card to use and when?  I tend to plug my online purchases into evreward.com to see what’s best.  Of course, if I’m saving up for a certain trip, I may choose a different card when the earning is similar.  But I cannot pass up 15% cash back just because I am currently saving up Ultimate Reward points.

While I am earning these points, I tend to ignore my reward balance and just let it surprise me once I want to head to the spa.  I like the additional relaxation in knowing that my spa visit was “free” through the bonuses I received.  But there are other things you can use your cash back for.

One way is by applying it to your balance as you earn it.  Another way to see that Groupon transaction above is as a discount.  Rather than paying $300, I was really paying $255–a significant discount.  I also have a friend who ignores her cash back until Christmas time.  She usually gets people gift cards anyway, and Discover will usually give a 10-20% bonus when buying gift cards.  (For example, $45 in Reward Money will get you a $50 Starbucks Gift Card.  $20 will get you $25 to Bed, Bath & Beyond.)

Currently, I am very focused on my Ultimate Reward point earnings.  But I was still pleasantly surprised when I checked my Discover Balance.  Perhaps a spa day is in my future soon.

Ahhh….

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Heels First is the travels and tribulations of two twenty-something frequent fliers jumping into the world of travel. Join Keri and Jeanne as they tackle mileage runs, elite status, and of course–the perfect travel accessories.

About Jeanne Marie Hoffman

Former bartender, still a geek. One equal part each cookies, liberty, football, music, travel, libations. Stir vigorously. +Jeanne Marie Hoffman Jeanne on Twitter

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