A Review of Discover's Cashback Checking Accounts

Earn Rewards by Using your Account

Man paying with credit card reader in shop
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Discover Bank has an online checking account that rewards you for using your account. The Discover Cashback Checking account is unique because it offers unlimited 10 cent “rewards.” There are not many other options out there if you want to get paid for using your debit card – credit card rewards regularly offer cash back, but debit card rewards are much less generous.

Discover Cashback Checking Highlights

Cashback Rewards

The main attraction of this account is that you can earn cash by using it. You’ll get 10 cents any time you:

You can earn rewards on up to 100 transactions per month, so you've got the potential to earn $10 per month.

Your “Cashback Bonus” will be added to your account at the end of any month in which you earn a bonus, so you won’t have to wait long for those rewards.

How Much Those Rewards Are Actually Worth

Before opening an account and going to the trouble of setting up direct deposit and bill payments, it’s worth evaluating how much you’ll actually be rewarded for using the account.

Remember that you earn 10 cents per transaction. Take a look at your current checking account activity to determine how much you’ll potentially earn. How many times do you swipe your debit card, pay bills online, and write checks?

If you have 50 transactions per month that will earn cash back, you can expect to earn $5.00 per month as a bonus. That may or may not be worth the trouble of switching to this account (if you need to open a new checking account anyway, the account might be a bit more attractive).

To think about the rewards a different way, you might try to figure how much you’ll earn as a percentage of your spending. For example, if you spend $10 per transaction, a 10 cent reward is roughly a 1% reward – that’s not bad, considering that debit card rewards are hard to come by. However, if you spend more than $10 per transaction, you’re earning less, and there might be better options out there.

As an alternative to earning rewards in this account, you might consider other free checking accounts that pay interest. Depending on your account balances and activity, you might earn more or less with those accounts – but it’s always worth running the numbers to figure out what benefits you the most. If you need ideas on interest-bearing checking accounts, take a look at Capital One 360 and Ally Bank.

Gaming the System

Some people like to get even more of a good thing, and they get very creative about maximizing rewards. Such people might be tempted to split transactions so that they earn more of those 10 cent rewards. For example, they might ring up (and pay for) every item individually when they go shopping. Aside from annoying the people in line behind you, this strategy won’t do anything – Discover Bank explains that they’ll be keeping an eye out for this type of activity.