Discover Unveils 5% Cash Back Categories for 2021

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Discover announces cash back categories for 2021.
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The news Discover it® Cash Back cardholders wait for toward the end of each year has arrived.

Discover just announced 2021 quarterly 5% bonus categories for its popular rotating cash back credit card. This card is among our top choices in the cash back credit card category.

Discover has introduced a new category, streaming TV and music, as a part of the rotating bonuses next year. Pay your streaming bill(s) with your Discover card during Q2 2021, and you’ll get 5% cash back.

Meera Sridharan, who is the company’s vice president of rewards and product strategy, explained that decision in a news release:

“The pandemic is changing consumer spending habits, and more people are spending time at home, which is why we’ve added more than 20 TV and music streaming services to the Second Quarter.”

A few quick reminders for those who may not be familiar with the Discover Cashback Bonus program:

  • Each 5% bonus category has a three-month period of activity.
  • The bonuses max out at $1,500 in spending per quarter, which means the maximum reward is $75 cash back each quarter.
  • Discover pays 1% cash back on all non-bonus spending (including spending once your bonus reward is capped).

Here’s the 2021 cash back bonus gameplan:

Quarter 1: Grocery Stores, Walgreens and CVS

Reward Period: January 1, 2021-March 31, 2021

The Specifics: This is a returning spending category with a new twist.

In addition to traditional supermarket purchases, Discover says you can earn bonus cash back during the first quarter on grocery pickup and delivery through Walmart.

Note, though, that Discover specifically excludes bonus points for grocery purchases made at “convenience stores, gas stations, warehouse clubs, discount stores, supercenters (or at grocery stores associated with supercenters or discount stores).” So that means you won’t get the bonus points at Walmart unless you buy the groceries through the pickup or delivery service. 

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The Walgreens and CVS side of this promotion is much simpler. You can get rewards for purchases made at their physical stores, online or through their apps. The one stipulation is that the purchases have to be from the drugstores themselves, not a business located within one of the stores (such as a medical clinic, for example).


Quarter 2: Gas Stations, Wholesale Clubs and Select Streaming Services

Reward Period: April 1, 2021-June 30, 2021

The Specifics: For the gas station reward, you’re going to want to make sure that you’re purchasing directly from a gas station either at the pump or the service counter. Discover warns that gas stations affiliated with supermarkets and supercenters may not be eligible.

Wholesale clubs, such as Sam’s Club and Costco, are the big cash opportunity for many people in this quarter. However, it’s important to check with the wholesale club at which you shop to ensure they actually accept Discover as payment. Sam’s Club does, but Costco accepts Discover only on its website.

Now to the new category: streaming services. Here’s the list of eligible services: Apple Music, Apple TV+, AT&T TV Now, BET+, CBS All Access, DAZN, Disney +, ESPN+, Fubo TV, Google Play Movies & TV, HBO Max, Hulu, Netflix, Pandora, Philo, Peacock TV, Showtime, Sirius XM, Starz, Sling, Spotify, Vudu and YouTube TV.


Quarter 3: Restaurants and PayPal

Reward Period: July 1, 2021-September 30, 2021

The Specifics: To qualify for the restaurant cash back, your purchase must be made at a retailer that is classified as one of the following: full-service restaurants, cafes, cafeterias and fast food locations. That seems pretty all-encompassing on the dining front, though you may miss out on rewards for that hot dog you buy at the gas station.

PayPal is also pretty straightforward. You’ll receive the 5% cash back on any transaction made with your Discover card through your PayPal account.

Discover does mention that you can earn the 5% cash back only one time on restaurant purchases made with your PayPal wallet. No double-dipping!


Quarter 4: Amazon.com, Walmart.com and Target.com

Reward Period: October 1, 2021-December 31, 2021

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The Specifics: The Amazon portion of this rewards category is quite generous. You can use it for any purchase made through the Amazon.com checkout process, but you also can use it for Amazon Prime membership purchases and Amazon Fresh orders.

For Walmart.com and Target.com purchases, Discover limits things a little more. You are unable to earn the bonus on purchases made from third-party affiliates through those websites. Eligible purchases must be made directly from Walmart or Target via the website or app.


Final Thought

The Discover it card is one of the popular rotating 5% cash back cards, and the category offerings for 2021 should do little to change that.

I think the addition of streaming TV savings in Quarter 2 is a good one. Several other credit cards are starting to offer streaming perks due to a shift in consumer behavior in the entertainment space, so Discover was smart to find a way to compete in that area as well.

If you are considering adding the Discover it card to your wallet, the top perk still remains the cash back match guarantee for the first year of card membership. You can max out all of these 5% categories, and then Discover will double your rewards from that year of spending.

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