Double all cashback earned in the first year for new cardmembers — Discover always comes up with aggressive promos

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[2/1 Update] If your Refer rewards exceed $300+ during the cashback match period (6+ referrals), then after the match the total will exceed $600. That means Discover must issue you a 1099-MISC tax form. You will receive an email like the one below in January. As for how to handle it, we’ll analyze that after the tax form actually arrives. Spending rewards and Discover Deal cashback do not count toward the $600 threshold. For the tax treatment of rewards, see:

Overview of Cashback Match

For users who newly apply for a Discover credit card, all cashback earned in the first year will be fully matched in the second year. In other words, if you earned $25 in your first year, then after the first year ends, Discover will give you another $25. Eligible Discover credit cards include:

Things to note:

  • Only users who are newly approved for the card are eligible
  • New cardmembers do not need to register; enrollment is automatic
  • The match starts from the first statement closing date after you receive the card and continues for 12 billing cycles; all cashback earned during that period will be matched (one time only)
  • You receive it on the 13th statement closing date
  • Official Cashback Match Q&A.

Because Discover’s Cashback Match applies across several different Discover credit cards, I’ll go through them one by one in the sections below.

Analysis of Discover it Cashback Match:

Among the four card types above, Discover it has the most ways to earn cashback. So this section starts with the Discover it card.

What is included in Cashback Match

According to Discover’s official explanation, Cashback Match includes the following items (all of these have now been confirmed to be matched):QQ图片20150606001534

  • Sign-up bonus: the sign-up bonus will also be matched (from $50 doubled to $100)
  • The standard 1% on everyday purchases: all 1% cashback earned on purchases will be matched, effectively becoming 2%
  • All cashback earned through Discover Deal: all cashback earned through the Discover Deals shopping portal will be matched
    • At year-end, Discover Deal itself sometimes doubles cashback at certain merchants. For example, stores like Sephora and nordstrom may offer 10% cashback. Combined with Cashback Match, that becomes 20% — dangerously good for shopping
    • At other times, apple.com and bestbuy.com often have 5% cashback through Discover Deal, which becomes 10% after the match, making it a great option for buying an iPhone or Mac
    • See the Discover Deals Guide for details
  • Quarterly 5% categories: the 5% cashback in each rotating quarterly category gets matched to 10%
    • The 5% holiday shopping cashback in Q4 effectively becomes 10%, and that 10% can stack perfectly with Discover deal, so online shopping can reach an eye-popping 20%+ cashback, and sometimes even 30% (especially in cosmetics and department store categories)
    • This quarter, dining and movies can also earn 10% cashback, and next quarter Amazon will also be 10%
    • See Quarterly 5x Credit Card Bonus Summary for details
  • [Expired] Amazing Apple Pay 10% cashback bonus: based on reports from Discover Miles cardholders with a similar double rewards promotion, their double miles promo on cards received last February did include the Apple Pay 10% cashback offer from late 2015. So Discover it cardholders could look forward to that as well.

How to use Discover cashback

Beyond the value of Cashback Match itself on the Discover it, Discover cashback is actually very flexible. You can redeem it for cash to any bank account or as a statement credit, and you can also redeem it for discounted gift cards from many merchants. Discounts are often in the 10%-50% range, roughly as follows:

  • Redeem $20 for $40: rental car vouchers, cruise vouchers
  • Redeem $20 for $25: includes Staples, overstock, clothing stores
  • Redeem $45 for $50: includes most merchants, such as department stores, beauty products, and restaurants
  • Redeem $70 for $75: gas cards, Whole Foods

So if you want to get even more value out of this doubled cashback, redeeming for gift cards is a good option. In addition, Amazon sometimes runs promotions related to Discover cashback, such as 50-15 and similar offers. For everything about using Discover cashback, see:

My take

As you can see, Cashback Match covers a very wide range of rewards. So if you spend heavily in online shopping and quarterly 5% categories, where it is easiest to rack up a lot of cashback, this card is well worth considering for the first-year cashback match. On top of that, Discover cashback is very flexible: you can redeem it as cash with no minimum, or exchange it for discounted gift cards. That is a nice extra boost.

Even after the first year, the Discover it card is still worth keeping long term. In addition to strong quarterly 5% categories and online shopping rewards, this card offers a free credit score, purchase price protection, no foreign transaction fee (when processed through UnionPay, it is one of the best cards to use when going back to China), and even fee-free cash back at supermarkets. Most importantly, it has no annual fee! You could say it is one of the best-value no-annual-fee credit cards on the market.

At the moment, Discover’s official site does not offer a sign-up bonus on the Discover it family of cards. As for referral links, the NHL version does not come with a referral link that offers a sign-up bonus, so it is not recommended unless you are a die-hard NHL fan. The student and regular versions of Discover it can be applied for through a referral from an existing Discover cardholder and earn a $100 sign-up bonus ($50 first, then another $50 in the second year). If you are interested, you can apply using this site’s referral link.

Analysis of Discover Miles Cashback Match

What cashback is included

Compared with the Discover it card, which has many sources of cashback, Discover miles has a much simpler earning structure. At the moment, it only includes:

  • 1.5x on all spending: doubled to 3x
  • [Expired] Amazing Apple Pay 10% cashback bonus: doubled to 20%. People who got this card last February already received the matched version of the Apple Pay 10% cashback from late 2015.
  • Discover Deal cashback portal (readers who have this card, please leave a comment to confirm whether it has Discover Deal)

How to use the cashback

Although Discover classifies this card as a travel credit card and it earns “miles,” these “Miles” can actually be redeemed for cash at a 1:1 ratio. So in practice, this is basically a 1.5% cash back credit card on all purchases. Travel redemptions also offset charges at a 1:1 ratio, so redeeming for cash is still the simplest option.

I personally do not have the Discover Miles credit card, so I am not sure whether the “miles” earned on this card can be redeemed for discounted gift cards like Discover it. Readers who have this card, please leave a comment to confirm.

My analysis

This card’s 1.5% + 1.5% in the first year, and 1.5% cash back after the first year, is better suited for people who spend a lot in non-bonus categories that do not fall under groceries, gas, department stores, online shopping, etc., such as tuition, insurance, medical bills, and daycare bills. The first-year 3% is also one of the highest rates available for non-bonus-category spending. In addition, you can use this card to buy gift cards and then spend at merchants that do not accept Discover. For example, you could buy a cash card on the Costco website and then use that cash card at Costco.

Overall, the impact of the Cashback Match on this card is not as significant as it is on Discover it. So unless you have a specific need, the Discover it lineup is still the better choice. However, this card offers up to $30 in annual reimbursement for in-flight Wi-Fi, which can be nice for people who will use it. For more details, see:

Discover it Gas&Restaurant Cashback Match analysis

What cashback is included

Compared with the Discover it card, which has many cashback sources, and the Discover mileAmazon card, which has only a single source, this one is somewhere in the middle.
Cashback DiDiscover

  • All purchases: doubled from 1% to 2%
  • Dining and gas purchases: doubled from 2% to 4%
  • Discover Deal cashback portal (readers who have this card, please leave a comment to confirm whether it has Discover Deal)

How to use the cashback

I personally do not have this credit card, but I would guess its cashback works similarly to the Discover it cards. Readers who have this card, please leave a comment to confirm.

My analysis

This card’s first-year 2% + 2% on dining and gas is pretty good. If you spend a lot on dining and gas, this card could be a good choice. However, after the first year, 2% on dining and gas is rather mediocre. DiscoverDiscover itD cashback Discover itCiti Double Cash (2% on all purchases) can basically beat this card across the board. Still, since this card has no annual fee, it could be worth applying for, using for a year, and then tossing it in a drawer to help build credit history. For details, see:

Discover Secured Card Cashback Match analysis

This card’s cashback structure is exactly the same as the Discover it Chrome credit card, so I won’t go into detail again Discover it

  • A Secured card is suitable for people with no credit history or poor credit history. They can deposit money, spend on the card, and use it to build credit history.
  • With Cashback Match, during the first year you get 4% on dining and gas, and 2% on other purchases. It is one of the best no-annual-fee secured cards.
  • It may be possible to convert it to a regular Discover card, but it is not yet clear whether the eligible options include the very useful Discover it credit card.
  • For details, see: Discover Secured Card review

Real example

A batch of existing users who successfully signed up last year have already started receiving the matched double cashback, which appears on the statement in the form of cashback match. It has already been confirmed that all cashback earned, including quarterly 5%, Discover Deal, Refer A Friend, Apple Pay, sign-up bonuses, and the other 1% cashback, will be doubled. So new cardholders can feel free to enjoy this Cashback Match!

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