Cash back is a perk many credit card companies offer on their rewards credit cards. It refers to earning back a percentage of the money you spend on your credit card. Some cards offer the opportunity to earn even more cash back on purchases by enrolling in quarterly promotions or making purchases through their virtual shopping portals.

Often, there is a cap on how much cash back you can earn on purchases through promotions or quarterly rewards programs. For example, the Discover it® Cash Back allows cardmembers to earn 5% cash back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, gas stations and when they pay using PayPal, up to the quarterly maximum ($1,500 in purchases) when they activate*. You can see the 2021 rotating categories available on Discover.com. Be sure to read the terms and conditions to fully understand (and take advantage of) your card’s cash back rewards program.

  1. How Does Cash Back Redemption Work?
  2. How Does Discover Cash Back Work?
  3. When Do I Get My Cash Back from Discover?
  4. Should I Spend as Much as Possible to Earn Cash Back?
  5. Choosing the Right Cash Back Credit Card for You

How Does Cash Back Redemption Work?

Cash back may be redeemed in a number of ways depending on the bank and credit card. Below are a few examples, be sure to check the terms and conditions of any card you’re looking at:

  1. Bank Deposit: You may be able to deposit cash back directly into your checking or savings account. With Discover, you can cash out your rewards balance at any time, while other banks may require a minimum rewards balance before you can cash out. Be sure to read your terms and conditions to understand your redemption thresholds.
  2. Statement Credit: You may be able to apply your cash back to your credit card balance.
  3. Gift Cards: Some credit card companies allow you to redeem your cash back in the form of gift cards or e-certificates for popular retailers.
  4. Charitable Donations: Some credit card companies allow you to donate some or all of your cash back to a charity of your choosing.

How Does Discover Cash Back Work?

Below are details on how cash back works for various Discover credit cards. See terms at the bottom of this article or by clicking through to each card’s web page:

The Discover it® Cash Back card allows cardmembers to earn 5% cash back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, gas stations and when they pay using PayPal, up to the quarterly maximum ($1,500 in purchases) when they activate. Cardmembers also get unlimited 1% cash back on all other purchases.

With the Discover it® Chrome card, cardmembers earn 2% Cashback Bonus® at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter.* Plus, cardmembers earn unlimited 1% cash back on all other purchases – automatically.

The Discover it® Miles card earns unlimited 1.5x Miles for every dollar spent on all purchases – from airfare and hotels to groceries and online shopping. Cardmembers can turn Miles into cash, or redeem as a statement credit for travel purchases like airfare, hotels, rideshares, gas stations, restaurants and more.* However cardmembers redeem, Miles have the same value and Miles never expire.*

The Discover it® Student Cash Back and Discover it® Student Chrome  cards offer the same  cash back rewards listed above. Students can earn rewards and build credit with responsible use with either card.*

The Discover it® Secured Credit Card is a credit-building credit card and requires a refundable security deposit.* However, it also allows cardmembers to earn 2%Cashback Bonus® at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter* as well as an unlimited 1% cash back on all other purchases – automatically. Plus, it can help you build your credit history with responsible use.*

Finally, keep in mind that Discover matches all the Cash Back or Miles you’ve earned at the end of your first year as a new cardmember.*

When Do I Get My Cash Back from Discover?

When you receive your cash back from Discover varies based on the type of redemption you choose:

  • Gift cards are sent by U.S. Mail to your billing address in 7–10 business days after you submit the order, but you should allow up to three weeks (and keep in mind that there could be delays around the holidays).
  • Bank deposits will be sent to your chosen financial institution within three days.
  • Statement credits will post to your Discover account within three business days.

Should I Spend as Much as Possible to Earn Cash Back?

Cash back should not to be misinterpreted as an incentive to spend too much. Instead, you should look at cash back as a bonus for the money you would spend absent rewards.

(The last thing you should do is charge more than you can afford just to get more cash back. If you overspend and fall into debt, you risk running up interest charges that could cancel out the perks of rewards.

Choosing the Right Cash Back Credit Card for You

It’s always a good idea to research the credit cards available to you and then weigh your options. Let’s break down the benefits so you can compare cards:

  • Understand the offers. First, make sure you understand the details of each offer. Does the cash back apply to all purchases, select categories or a combination of both? Some cards may return a higher percentage back for groceries than they do for gas, as an example. Also, be sure you understand the maximum amounts you can earn and when and where you can redeem your bonuses. Lastly, remember that cash back cards may come with expiration rules. So, don’t leave money on the table for missing regularly scheduled payments or going months without using your card.
  • Know your spending habits. Once you’ve nailed down the specifics of each offer, the next step is to analyze your spending habits and matching the cash back categories to your style. What types of products and services do you purchase the most – books and movies? Home improvement? Travel? Some credit cards offer cash back bonuses at different places throughout the year, so you have even more ways to earn. 
  • Look beyond the cash back. While the cash back perks are enticing, don’t forget to compare the non-cash back features of the card with your spending style. Do you pay off your credit card in full every month or just make the minimum payment? If you want to get the maximum benefit from a cash back rewards card, it can be a good idea to pay off your balance each month to avoid paying interest.
  • Don’t forget about APRs. Even on a single credit card account, APRs can vary depending on a few different factors. For instance, one APR may be charged for purchases and another for balance transfers. Promotional APRs can help you save over the short term by offering you a low or 0% promotional APR on certain kinds of transactions, for a limited period of time. Keep in mind that some credit card companies will increase your APR if certain conditions are not met. Paying your balance on time may help you keep your low APR.
  • Compare fees. When it comes to credit card fees, be sure to read the fine print. Credit cards can vary significantly in what they’ll charge you for annual fees, late payments, balance transfer fees, etc. – so make sure you understand how these fees may affect you. For Example, Discover’s cards all have No Annual Fee.

When choosing the right cash back credit card for you, read through the entire offer and get familiar with all the terms and conditions. Then carefully monitor your spending habits over the next few weeks to see how well your new card fits your lifestyle.

Originally published June 29, 2016.

Updated May 27, 2021.

Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.

Applies to all categories:  Certain digital wallet transactions qualify for 5%, for more information see Discover.com/digitalwallets. Purchases made through third-party payment accounts, mobile or wireless card readers, virtual wallets or similar technology will not be eligible if the technology does not provide sufficient transaction details for rewards qualification. 5% Cashback Categories: In accordance with standard industry practices, merchants are assigned a merchant category code (MCC) typically based on their line of business, or the type of products and/or services they primarily sell or provide. Discover Card does not assign MCCs to merchants. Even if you make purchases at a merchant of items that appear to fit in a rewards category, the merchant m ay not have an assigned MCC in that rewards category. Only purchases made from merchants located in the United States are eligible for 5% Cashback Bonus. Rewards are added to your Cashback Bonus account within two billing periods. See Cashback Bonus Program Terms and Conditions for more information about your rewards.

Amazon is not a sponsor of this promotion. Amazon, the Amazon.com logo and the smile logo are trademarks of Amazon or its affiliates.

PayPal: PayPal, the PayPal logo are trademarks of PayPal or its Affiliates. Listed merchants are in no way sponsoring or affiliated with this program

Chrome Disclosure: You earn a full 2% Cashback Bonus® on your first $1000 in combined purchases at Gas Stations (stand-alone), and Restaurants each calendar quarter. Calendar quarters are defined as the three-month periods beginning January 1, April 1, July 1, and October 1. Purchases at Gas Stations and Restaurants over the quarterly cap, and all other purchases, earn 1% cash back. Purchases made at Gas Stations include only merchants in the category that sell automotive gasoline that can be paid for either at the pump or inside the station. Gas Stations affiliated with supermarkets and supercenters may not be eligible. Restaurant purchases include only those made at merchants classified as full-service restaurants, cafes, cafeterias and fast food locations. Certain digital wallet transactions qualify for 2% Cashback Bonus, for more information see Discover.com/digitalwallets. Purchases made through third-party payment accounts, mobile or wireless card readers, virtual wallets or similar technology will not be eligible if the technology does not provide sufficient transaction details for rewards qualification. 2% Cashback Categories: In accordance with standard industry practices, merchants are assigned a merchant category code (MCC) typically based on their line of business, or the type of products and/or services they primarily sell or provide. Discover Card does not assign MCCs to merchants. Even if you make purchases at a merchant of items that appear to fit in a rewards category, the merchant may not have an assigned MCC in that rewards category. Only purchases made from merchants located in the United States are eligible for 2% Cashback Bonus. In order for a purchase to qualify for the 2% Cashback Bonus Program, the transaction date must be before or on the last day of the offer or promotion. Rewards are added to your Cashback Bonus account within two billing periods. See Cashback Bonus  Program Terms and Conditions for more information about your rewards.

Miles Never Expire: We will credit your account with your rewards balance if your account is closed or has not been used in 18 months. See Miles Terms and Conditions for details.

Starting at 1 Mile, you can redeem your Miles as a credit to your account to pay for all or part of your bill, for cash as an electronic deposit to your bank account, or for a credit for Travel Purchases made on your statement within the last 180 days. Travel Purchases include airline tickets, hotel rooms, car rentals, travel agents, online travel sites, commuter transportation, restaurants and gas stations.

Builds credit with responsible use:: Discover reports your credit history to the three major credit bureaus so it can help build your credit if used responsibly. Late payments, delinquencies or other derogatory activity with your credit card accounts and loans may adversely impact your ability to build credit.

Minimum Security Deposit: A minimum security deposit of $200 is required to open this account and your security deposit must equal your credit limit. Your maximum credit limit (up to $2500) will be determined by your income and ability to pay.

Cashback Match: We’ll match all the cash back rewards you’ve earned on your credit card from the day your new account is approved through your first 12 consecutive billing periods or 365 days, whichever is longer, and add it to your rewards account within two billing periods. You’ve earned cash back rewards only when they’re processed, which may be after the transaction date. We will not match: rewards that are processed after your match period ends; statement credits; rewards transfers from Discover checking or other deposit accounts; or rewards for accounts that are closed. This promotional offer may not be available in the future and is exclusively for new cardmembers. No purchase minimums.

Discover Match®: We’ll match all the Miles rewards you’ve earned on your credit card from the day your new account is approved through your first 12 consecutive billing periods or 365 days, whichever is longer, and add it to your rewards account within two billing periods. You’ve earned Miles rewards only when they’re processed, which may be after the transaction date. We will not match: rewards that are processed after your match period ends; statement credits; rewards transfers from Discover checking or other deposit accounts; or rewards for accounts that are closed. This promotional offer may not be available in the future and is exclusively for new cardmembers. No purchase minimums.