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Discover has just made a key update to the 5% bonus categories for the second half of 2019. This is an all-positive change since the original categories, announced at the beginning of the year, remain unchanged. Discover it® Cash Back and Discover® More cardmembers will now earn 5% back on PayPal transactions in Q3 (in addition to restaurants) and on Target and Walmart.com in (addition to Amazon.com) in Q4.
July–September — Restaurants & PayPal
Although many cardholders were probably in a good position to max out the 5% category by spending $500 per month on restaurants, the addition of PayPal is a big win. Since there are so many other cards that offer extra points on restaurants, putting all that spend on a Discover card means you’re likely to forego valuable points you could have earned with the Chase Sapphire Reserve®, the American Express® Gold Card, or the Citi Prestige® Card.
With PayPal, you can earn 5% when you use PayPal as the payment method for online transactions and for in-person transactions using PayPal Here (where available). Best of all, you can earn the 5% cash back on sending money to friends and family using your eligible Discover Card. Unlike buying goods online via PayPal, payments to friends and family incur a 2.9% fee, so you’ll loose part of your cash back.
That said, you can earn $31.50 in free money by sending $1,500 to a PayPal account of a trusted friend. Your Discover card will earn $75 in cash back, maxing out the Q3 category in a single transaction. After subtracting $43.50 in PayPal fees, you come out with a nice profit of $31.50 for five minutes of work.
October–December — Amazon.com, Target, and Walmart.com
The fourth-quarter bonus category additions should make it even easier to maximize the 5% category with your holiday shopping. Target, which often features great Black Friday promotions is eligible for 5% cash back for both in-store and online transactions.
Walmart notably excludes purchases made in-store, so you’ll need to do your shopping through the Walmart app or at Walmart.com. However, the Discover T&C state that grocery pickup orders made through the Walmart app will be eligible, so this category could potentially be maximized on grocery purchases alone.
As a reminder, you still have a little over a month to maximize the current Discover 5% cash back categories of gas stations, Uber, and Lyft. If you forgot to activate the Q2 bonus, you won't receive retroactive credit for purchases in April and May, but you can still make decent progress by swiping your eligible Discover card at the pump and adding it as the preferred payment method with your favorite rideshare app.
Discover notes in their Terms & Conditions that gift cards may not be eligible, but these types of restrictions are often difficult to enforce. If you're short of the $1,500 in spending needed to maximize the category, consider testing gift card purchases from your local gas station or Uber/Lyft in small amounts. (And please let us know in the comments if these purchases have earned 5% cash back.)
- You can now activate your 5% cashback bonus category.
- Discover Q2, 2019 runs from April 1, through June 30, 2019.
- This quarter, earn 5% cash back at gas stations, Uber, and Lyft.
- The 5% is earned on the first $1,500 of spending per quarter (max $75 earned) — 1% after that.
- Cashback is earned when using the Discover it® Cash Back or the Discover® More® Card (no longer accepting applications).
- Purchases made using tap-and-pay, mobile or wireless card readers, virtual wallets or similar technology may not be eligible.
- Cashback will be credited to your account within two billing cycles
Unlike the Chase Freedom® 5% bonus categories which will give you retroactive credit for the 5x earning categories as long as you register by the June-14th deadline, Discover requires you to activate the earning category before any transactions will earn 5%. That means you want to activate the Q3 earning category by July 1, 2019 at the latest.
Q3 activation is available now on the Discover 5% cash back bonus home page. Q4 activation starts August 1st, so be sure to set a reminder.
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