If you haven’t tried a 5% cash-back card yet, now is a good time to start. Discover has released the 2021 quarterly rewards calendar for its 5% cards—including the Discover it Cash Back and the Discover it Student Cash Back cards—and it includes a new category: streaming services.
As usual, Discover is awarding 5% cash back on many of the most common everyday spending categories, such as groceries, gas, and dining. Discover added more bonus categories to the calendar in 2020, making it easier to earn 5% back, and carried those additional categories over to 2021. It has also replaced the second-quarter Uber and Lyft earning categories with streaming services.
Discover has announced its 5% cash-back categories for 2022. First quarter categories (grocery stores and fitness club and gym memberships) can now be activated on your card. Note that 5% earning won't start until Jan. 1, 2022, even if you activate early.
Here’s a closer look at the Discover 2021 cash-back calendar and how to get more out of it.
How the Discover it Quarterly Rewards Work
Unlike cards that offer the same cash-back bonuses all year, Discover’s 5% cards rotate the types of purchases that earn 5% cash back. The bonus categories change every three months and cardholders are required to opt in each time.
Discover caps 5% bonus spending at $1,500 per quarter. So the most you’ll be able to earn through the bonus is $75 per quarter, or $300 per year. Any money you spend beyond that will earn 1% cash back.
How To Optimize Your Discover Card Spending
Maxing out Discover’s 5% bonus categories can be challenging—especially if the calendar doesn’t closely match your spending habits. However, there are steps you can take to maximize your likelihood of earning a bonus.
January to March: Grocery Stores, Walgreens, and CVS
If you have the storage space, the first three months of the year are a great time to stock up on supplies. Take an inventory of what’s sitting in your cabinets and what’s getting low. Have you made a New Year’s resolution to cook more? Now’s a good time to replenish your herbs and spices, especially if the contents of your spice cabinet are more than a few years old.
You may not need to shift your spending too much, though, to max out your quarterly bonus. According to the Bureau of Labor Statistics (BLS), the average household spends $4,942 a year (around $412 a month) on food cooked at home. But families with a lot of mouths to feed can easily spend more than $500 a month on groceries.
From January to March, be mindful of where you shop for household supplies, but don’t allow yourself to be so tempted by the 5% cash-back bonus that you wind up paying more for something like laundry detergent than you would at your regular spot.
April to June: Gas Stations, Wholesale Clubs, and Streaming Services
New to this quarter of bonus categories is streaming services. Purchases made with more than 20 streaming services (including big-name options such as Apple Music, HBO Max, Netflix, Pandora, Showtime, and Spotify) will earn 5% back and count toward the quarter earning limits. Discover added this category to offer consumers who are spending more time at home this year additional ways to earn extra cash-back rewards.
If you have a car and are a member of a wholesale club that accepts Discover, such as BJ’s or Sam’s, you should be able to easily max out your quarterly bonus and earn at least $75 back—especially if you shop for groceries at your local club. According to the BLS, the average household spends $1.568 a year (around $138 a month) on gas. But families with multiple cars, long commutes, or higher gas prices may spend more. Check your card statements to see how much you typically spend.
Earning the full bonus can be tough, though, if you don't drive or belong to an eligible club. Costco, for example, doesn’t accept Discover. If you’ve been on the fence about joining your local Sam’s or BJ’s, now may be the time to do it: The cash back you get from your Discover card could cancel out the club’s annual fee. April to June may also be a good time to schedule a vacation. Rather than rent a car and sightsee in July, for example, schedule your trip for June so you can get 5% back on gas.
Watch where you stop to fill up. Gas stations affiliated with a supermarket may be coded as a grocery-store purchase by the merchant and, as a result, won’t earn 5% back.
July to September: Restaurants and PayPal
If you aren’t the type to spend big on fine dining or online shopping, maxing out your 5% bonus from July to September could be tricky. According to the Bureau of Labor Statistics, for example, the average household spends just $2,375 a year on dining out, around $198 a month. That leaves $1,176 you’d need to spend on PayPal purchases (or additional dining out) to earn maximum cash back.
But even if your annual budget is limited, you can still come out ahead. For example, consider stocking up on gift cards from your favorite restaurants and using them later in the year. Or buy birthday or holiday gifts early and pay for them with PayPal. Many online retailers let you checkout with PayPal’s wallet. (Make sure your account is linked to your Discover card.) It’s not worth incurring interest for cash back, though, so don’t buy more than you can afford.
Check whether your monthly subscriptions also accept PayPal. You may be surprised: Some streaming services such as Hulu, for example, allow users to pay with PayPal.
October to December: Amazon.com, Walmart.com, Target.com
The last three months of the year are also a good time to do some strategic shopping. Retail competition during this prime holiday shopping period is fierce, and consumers often benefit from a number of promotions, including free shipping, just before the holidays. Black Friday and Cyber Monday also fall during this period, giving you access to steep discounts. Make the most of Discover’s quarterly bonus on Amazon, Walmart.com and Target.com purchases by reserving some of your biggest purchases—such as electronics or housewares—for the last three months of the year. Make a list of what you’d like to buy or replace so you’re ready to add them to your shopping cart next fall.
If you belong to a travel loyalty club, use that club’s shopping portal to earn additional rewards. For example, if you’re a United MileagePlus member, you can visit the airline’s shopping mall and click through to Walmart.com or Target.com. Any purchases you make with your Discover card will earn 5% back and bonus air miles.
It pays to be strategic.
Even small shifts in your spending, such as shopping for clothes at a wholesale club in June or refreshing your medicine cabinet in January, can help you earn more cash back.