The Cash Back Card I Always Hang Onto (with great results)

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I am currently in the situation where I need to spend a lot of money at Sears in the near future.  And there are situations where it makes sense to forgo the miles & points earning cards to rely on a cash back card… when there’s a great opportunity.

What I mean is, I’m not going to forgo my Chase Sapphire card at restaurants (2 points per dollar) for a cash back card that gives me 0.5%-1% cash back.  That’s just leaving money on the table.  But when there are special promotions with cash back cards, I try to max out that particular type of spend.

What Cash Back Card I Use

I’m very loyal to the Discover it® Card, which features categories every few months with 5% cash back.  The 5% cash back is usually good for up to $1,500 in spending each quarter, so I tend to max that out (if I am spending in those categories), and then move back to my usual spending on my usual card.

This quarter, restaurants and movies is the 5% cash back.  The restaurant part is easy for me to max out because of work events I sometimes pick up the tab for.

Bonuses with Cash Back Cards

In addition to the 5% cash back, when you convert your cash to gift cards, you get a bonus.  For Sears–the gift card I’m really going to need now–you earn an extra $5 bonus when you convert $45 into a gift card.  So this mean for $900 spend, I can get $50 back in the form of a Sear Gift card.  Effectively, 5.5 cents per dollar.  That’s not too shabby at all!

Should you replace your mileage earning card with a cash back card?

I’m not an advocate of replacing my points & miles earning cards for cash back in general.  If I moved to a cash back card for all my purchases to save up money for my appliances, when I cashed out it would feel like I was making money off the deal and earning money for my appliances.

But what I would really be doing is moving more of my travel to cash (vs. points), and at a loss.  I’d be earning more overall by using my 2x points per dollar cards to maximize my spend than I would save from using my cash back card to buy appliances.

But I also give this advice as a frequent traveler who has frequent need for the points I’m earning through my credit cards.

Bottom Line

Either way, whether you travel a lot or not, I recommend applying the Discover it® Card, especially if you shop at places that you can get gift cards for through their program.  (For example, Macys, Sears, Chilis, Outback, Starbucks, Banana Republic, etc.)  But primarily use it for its 5% cash back bonus.

There’s no annual fee, so you won’t be trapped by that.  Plus, you can use the Discover Mall which sometimes has bonuses up to 25% cash back on some purchases (which can be combined with the 5% cash back).

Also, first check your other options out before assuming the 5% cash back bonus is the best bonus,  Chase Freedom and Discover both had 5% promotions that applied to Amazon.com, and I went with Chase Freedom on that one.  (I love my Ultimate Reward points).

Please note if you use my links, I receive an affiliate credit which usually goes towards helping me travel even more.  This one may go towards a dishwasher. Or a clothes dryer.  Or whatever else decides to break in the next few days too 😛