Discover cash back credit cards

I love cash back credit cards.  There's nothing like getting a little change back for something you're buying anyway.  I also feel a little sense of joy when I feel like I'm being strategic and optimizing my spending across cards, loyalty programs, sales, coupons, etc.

One of my favorite cash back credit cards is Discover.  While their standard cash back percentage isn't as high as others, they do have those rotating 5% cash back categories every quarter, so I like to use it when the category is relevant to me.  Since there's no annual fee, I can also choose not to use the card when that quarter's category isn't useful for my spending habits (i.e. for gas purchases, since I don't have a car).  Last quarter they had 5% cash back on restaurants. I get takeout and eat out a lot, so I got a good amount of cash back those three months - enough to get myself a $25 gift card.

That leads me to one of the best things about Discover's cash back program - their cash back redemption options:

1. "Cash" back - You can redeem ANY amount of your cash back balance as straight cash back in the form of a statement credit or direct deposit into your bank account.  Most other cards make you wait until you reach a minimum or only allow you to redeem in set increments such as multiples of $25.  With Discover, you can choose to redeem the amount you earn every month - great for those firm believers of time value of money.


2. Gift card deals - While I love the flexibility of cash, I actually prefer redeeming my Discover cash back for gift cards because they have deals on their wide selection of merchant gift cards.  For example, that $25 gift card I mentioned earlier only cost me $20 of my cash back balance.  I've also redeemed $20 cash back for a $40 car rental instant e-certificate before.  Basically, I got cash back on purchases I was making anyway and then doubled the value of the cash back I received.  In a way, I was getting 10% cash back on my purchases.


3. And more - You can also shop with your cash back at select online merchants and donate to certain charities.

On top of that, Discover has a pleasant and easy to use website, and they give you your credit score on every statement.

Right now, eligible new cardmembers can get a $50 cash back bonus if they open a new account and make a purchase within three months.  And if you want to get in on this quarter's categories, your purchases from July through September at Amazon.com, department stores, and home improvement stores get 5% cash back.