How Discover’s 5% Quarterly Cashback Works
There are three Discover cards that offer a 5% cashback on a rotating schedule of categories, including the Discover cashback card, Discover it student cashback card, and Discover NHL card.
To earn the high cashback each quarter, you will first need to activate the offer online or through the Discover app. You can activate cashback categories up to a month in advance and at any time during the quarter. Once activated, you will earn 5% on the first $1,500 in combined purchases in the specified categories. After that, you will earn 1% on other purchases. This means you can earn a maximum of $75 in additional cashback on these categories per quarter, or up to $300 in a year. There is no limit on the amount you can earn at the 1% rate.
The cashback schedule for 2022 included several categories that make it easy to maximize your rewards:
- Quarter 1: Grocery stores, gyms, and pharmacies
- Quarter 2: Gas stations and Target stores
- Quarter 3: Restaurants and PayPal
- Quarter 4: Amazon and digital wallets
Discover’s 5% Cashback Calendar for 2023
The earning opportunities in Q1 of 2023 look strong, but we will have to wait to see what Discover announces for the subsequent quarters. In the meantime, we’ve provided estimates for what it might be based on last year’s categories.
| Effective Period | 5% Cashback Categories | When to Activate |
|---|---|---|
| Quarter 1 (January – March) | Grocery stores, pharmacies, and streaming services | December 1, 2022 to March 30, 2023 |
| Quarter 2 (April – June) | To be determined (Gas stations, Target stores?) | March 1 to June 29 |
| Quarter 3 (July – September) | To be determined (Restaurants, PayPal?) | June 1 to September 29 |
| Quarter 4 (October – December) | To be determined (Amazon, digital wallets?) | September 1 to December 30 |
January to March: Grocery Stores, Pharmacies, and Streaming Services
If you have enough storage space, the first three months of the year is a great time to stock up on kitchen and bathroom essentials. Take inventory of what you have in your cupboards and what you’re lacking. Have you resolved to cook more? Now is the time to restock your herbs, spices, and other pantry items, especially if your spice cabinet contents are older than a few years.
You may not need to change your spending habits much; according to the Bureau of Labor Statistics (BLS), the average household spends $5,259 a year (about $438 a month) on food cooked at home. But families with many mouths to feed can easily spend more than $500 a month on groceries.
Please note that grocery purchases at Walmart or Target do not qualify for this offer – you will need to shop at a dedicated grocery store to qualify.
April to June: Gas Stations and Target Stores?
In the second quarter of 2022, Discover offered its 5% cashback on purchases at Target and gas stations. To keep this in mind, in 2021, the average American household spent $179 a month on gasoline, according to the Bureau of Labor Statistics. To reach the maximum community for the 5% cashback, you would need to spend an additional $321 a month at Target. That’s a lot of sunscreen and sun-dried tomatoes.
Please note that some gas stations affiliated with membership clubs or supermarkets may not be eligible for this offer.
July to September: Restaurants and PayPal?
If Discover offers the same cashback categories for 2023 as it did in 2022, maximizing your earned rewards from the 5% cashback categories in the third quarter will depend on dining out (and takeout) habits and your tendency to shop online.
In
In 2021, the average American family spent $253 a month on restaurants, according to the Bureau of Labor Statistics. If you’re spending this amount, you’ll need to spend an additional $247 a month at places that accept PayPal to maximize the cash-back reward.
Please note that using PayPal for food purchases at restaurants or takeout will not double the cash-back reward. These purchases only earn a total of 5%.
October to December: Amazon and Digital Wallets?
In 2022, spending at Amazon and using digital wallets offered numerous cash-back opportunities for holiday shoppers.
Since digital wallets are accepted anywhere wireless payments are accepted, you shouldn’t have any trouble spending $1,500 during these last three months of the year. Examples of merchants that accept digital wallets include Target, Costco, gas stations, and grocery stores. You’ll also find acceptance for these payment methods online.
Alternative Programs for Variable 5% Cash-Back
Discover is not the only credit card offering variable 5% cash-back programs. The Chase Freedom Flex Card and Citi Custom Cash Card offer similar reward structures, although there are differences.
Chase Freedom Flex Card
Chase offers a quarterly 5% cash-back calendar for the Chase Freedom Flex Card. The minimum spending remains the same – $1,500 per quarter – and you’ll need to activate categories each quarter. However, like Discover, Chase announces its categories quarterly.
Citi Custom Cash Card
The Citi Custom Cash Card is an extremely customizable cash-back card which offers a monthly variable cash-back system for consumers. Unlike Chase and Discover, you do not need to register each month for these categories. Instead, Citi automatically calculates your highest eligible spending category each month and gives you 5% cash-back on those purchases. The maximum is determined after the first $500 of purchases; after that, you will receive 1% cash-back.
Here are the eligible categories for 5% cash-back:
- Specific Travel
- Specific Transportation
- Restaurants
- Specific Streaming Services
- Pharmacies
- Gas Stations
- Grocery Stores
- Home Improvement Stores
- Fitness Clubs
- Live Entertainment
Please note that the 5% cash-back you will earn on live entertainment includes theme park tickets, making the Citi Custom Cash Card one of the best options on the market for purchasing Disney tickets.
Conclusion
The Discover cash-back calendar can be an easy way to earn rewards on your spending. However, you’ll need to pay attention, as these rewards do not activate automatically and vary based on the quarter.
FAQs
How can you enroll in the 5% cash-back rewards with Discover?
You can activate cash-back rewards in your online account or through the Discover mobile app. The enrollment period begins two months before the quarterly rewards earning period, and you can activate your categories anytime until the end of the quarter.
How can I track my 5% spending on my Discover card?
You can track your purchases and the cash-back you’ve earned in the quarterly cash-back categories through your online Discover account as well as through the Discover app.
Thank you for your feedback!
Sources:
- Discover. “Discover 5% Cash Back Calendar.”
- Discover. “Discover Reveals Full 5% Cash-Back Bonus Calendar for 2022.”
- Bureau of Labor Statistics. “Consumer Expenditures: 2021.”
- Citi. “Citi Custom Cash credit card.”
- Discover. “What Can You Do With the Discover App?”
Source: https://www.thebalancemoney.com/discover-5-percent-cash-back-calendar-5212550
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