Executive Summary - One of the ways in which you can earn extra cash back with this card is with the 5% Cashback Bonus® program. In part 2 of our review, we'll explain what this is all about.
Like it's predecessors, this card allows card members to earn extra cash back (in this case, it is 5%). They do so by specifying a list of expense categories that will allow you to earn 5%. This list changes every quarter. You can earn the 5% cash back for up to $1,500 in spending during the quarter on these expenses.
Under the old Discover More Card, they used to announce the whole years' categories at the beginning of the year. But it appears that as of 2013, they will only announce the exact expense categories one quarter at a time. The chart below shows the latest list for 2013.
This method of earning cash back is commonly referred to as the rotating categories method. In fact, a couple of other cards like the Citi Dividend Card and the Chase Freedom have this feature.
The are several advantage and disadvantages of having a 5% cash back rotating category like this card. They key advantage is that you can earn 5% cash back on certain expenses (albeit for a limit time during a year). This is a really important point because there are no longer any cards like allow members to earn 5% in cash back terms or 5 reward points for any spending category. They existed a few years ago but issuers quickly discovered that card holders only used their cards for these 5% categories. With interchange fees at around 2%, this quickly became a money losing proposition for these types of cards.
The disadvantage of this rotating system is that you can only earn 5% for a category for one quarter (unless they have the category appear twice).
Having said all that, this is one of the methods which card members can earn 5% cash back. And there aren't many cards that can say that today. Another way to earn 5% cash back (or more is through their online shopping shopdiscover.com), and we will explore this next.