Earn 10% Back on Holiday Shopping with A Single Cash-Back Card

Holly Johnson

November 20, 2018  •  5 Minute Read

Credit Cards, Holidays

Black Friday sales and end-of-year holiday discounts make it possible to buy almost anything for less than you’ll pay the rest of the year. For that reason, the holiday shopping season is not only the best time to pick up holiday gifts, but also an excellent time to shop for yourself.

Whether you need to buy presents for nieces and nephews, upgrade your own furniture or appliances, or purchase a gift for a Sneaky Santa exchange, newspaper ads and the internet can help you find the best deals. Beyond special year-end discount and sales, however, it’s possible to receive an even greater benefit on your holiday shopping this year. If you pick up the right cash-back credit card, you could even earn an insanely high rate of rewards — even up to 10%!

Earn 10% Back with the Discover it® Cash Back

While an array of cash-back credit cards can help you maximize your holiday spending, one card — the Discover it® Cash Back — is offering more rewards than its competitors in certain categories. However, there are a few caveats to consider.

Here’s how the Discover it® Cash Back works: Once you sign up, earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com, or wholesale clubs up to the quarterly maximum each time you activate. However, Discover® has promised to match all of the cash back you've earned at the end of your first year. This brings your earnings in quarterly bonus categories up to 10% after twelve months.

For the final quarter of 2018, Discover® bonus categories align perfectly with the holiday shopping season. Earn 5% cash back at Amazon.com and wholesale clubs like Sam's Club and Costco now through December 2018, on up to $1,500 in purchases when you activate. Plus, 1% cash back on all other purchases.

If you’re looking toward the future at categories you’ll earn 10% in, you’ll be happy to hear Discover® has already released its categories for 2019 as well. Next year, you’ll earn 5% (doubled to 10%) back in:

• January – March 2019: Grocery stores
• April – June 2019: Gas stations, Uber, and Lyft
• July – September 2019: Restaurants
• October – December 2019: Amazon.com

Since the Discover it® Cash Back doesn’t charge an annual fee, you can pursue these rewards without paying for the privilege. And, it should be easy; after all, who isn’t doing at least some of their holiday shopping at Amazon.com these days?

Also note that you’ll receive 1% back on all other purchases you make with the card, with Discover® matching all of the cash back you’ve earned at the end of your first year. That makes the Discover it® Cash Back a solid cash-back card option for all your regular spending and monthly bills.

As an added bonus, the Discover it® Cash Back offers one more perk that could be helpful if you need time to pay your holiday shopping bills off. Once you sign up and receive your card, you get 0% APR on purchases and balance transfers for 14 months, with a go to APR of 14.24% - 25.24% Variable. While the balance transfer option does come with a 3% balance transfer fee, there are no fees when you use your card for purchases with the intent to take advantage of the 0% APR offer.

Discover it® Cash Back for Holiday Shopping? What You Should Know

While the Discover it® Cash Back offers 5% back on the first $1,500 you spend in categories that rotate every quarter and doubles your rewards the first year, it’s important to note that you won’t receive your “bonus points” right away. Discover® will match all of the cash back you've earned at the end of the first year, but only after the initial twelve-month bonus period ends. While waiting twelve months to receive your bonus rewards may not seem like a big deal, we thought this was worth pointing out since it would be easy to assume your points were doubled all year long.

It’s also important to remember that your rewards could cost you if you plan to carry a balance on your credit card for the long haul. While the Discover it® Cash Back does offer meaningful cash back on your spending, you’ll be charged a variable APR between 14.24% - 25.24% Variable depending on your creditworthiness after the initial 14-month period with 0% APR on purchases ends. While rewards can be tempting, it doesn’t make sense to pursue 5% or even 10% cash back when your interest rate is significantly higher and you carry a credit card balance most of the time.

How Much Cash Back Can You Earn?

While the amount of cash you can earn with this card will vary depending on your spending habits how well you utilize rotating bonus categories, it’s easy to imagine a scenario where you could max out the 5% categories for a full twelve months. You could do quite a bit of shopping on Amazon.com at the end of the year, after all, and it would be a simple feat to spend $1,500 in categories like dining and grocery stores over any three-month period.

If you were able to max out each 5% bonus category for a full twelve months, you would earn $75 per quarter — or $300 per year — in those categories alone. After twelve months were over, Discover® would double that amount to $600. And remember, that’s on top of the 1% back you get on all your regular spending and bills which will also be doubled after twelve months.

The Bottom Line

If you are hoping to earn cash rewards on your holiday spending this year, it would be difficult to beat the value proposition of the Discover it® Cash Back. Not only does this card offer 1% back on all purchases and 5% back in categories that rotate every quarter but Discover® will generously double your rewards after the first year. Plus, it comes with no annual fee.

If you plan to do your holiday shopping at Amazon.com or wholesale clubs in 2018, you’re leaving money on the table if you don’t sign up for this card. Just remember to keep track of the $1,500 limit per quarter, activate your card for the new spending category every three months, and pay your bill in full so you never pay a dime in interest.