Discover It Announces 5% Bonus Cashback Category for Q3

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The Discover It announced that from July through September, it would offer 5% cashback on gas, up to $1,500 in purchases. That sounds like a decent value – but only if you spend a lot of money on gas. The It has exactly one bonus category, while the Chase Freedom offers 5% back, also up to $1,500 spent, on gas, theme parks and Kohl’s during the same time period. If you spend $500 a month on gas, or you spend absolutely nothing on Kohl’s and theme parks, the Freedom and It are equally compelling. But if those two statements don’t apply to you, you’re better off with the Freedom’s flexibility.

5% cashback categories: How the cards stack up

Here are the 5% cards’ bonus categories for 2013, as we know them now:

Card Chase Freedom Citi Dividend Platinum Select Discover It
Q1 Gas, drugstores, Starbucks Zappos, fitness clubs, drugstores Restaurants, movie theaters
Q2 Restaurants, movie theaters Home furnishing and home and garden stores, Home Depot Home improvement
Q3 Gas, theme parks, Kohl’s TBA Gas
Q4 Select department stores, Amazon TBA “Holiday shopping”

There’s also the US Bank Cash+, which allows you to choose two 5% bonus categories from a rotating slate, as well as one 2% rewards category from gas, groceries and drugstores. The US Bank card has no limits on 2% bonus rewards and caps the 5% at $2,000 spent per quarter, and the Dividend Platinum Select tops out at $300 in rewards earned annually (which equates to $1,500 a quarter in 5% bonus spending, without even looking at non-bonus rewards).

Which is the best 5% cashback card?

If you’re shopping between the Freedom, Citi, It and Cash+, here’s a quick decision-making guide:

I like flexibility. If your main goal is to choose your bonus categories, you’re best off with the US Bank Cash+. Not only can you choose two 5% categories, but you can also bump your rewards rate up by 25%: If you redeem for $100 cash back, US Bank will throw in another $25 gratis. The downside is that there’s no signup bonus, and if you miss your quarterly enrollment, you’re out of luck.

I plan to hold the card for just a few years. In the short run, the Chase Freedom or Citi Dividend Platinum Select is the ideal choice. The two cards offer signup bonuses, whereas the It and Cash+ do not. We tend to prefer the Freedom – it’s one of our most popular cards – because it offers 15 months of zero interest to the Citicard’s 12, it tends to have better bonus categories, and its rewards cap is less restrictive.

I have a lot of credit card debt. We suggest the Discover It’s 18-month balance transfer option – it’ll give you 0% APR on transfers for a full year and a half (and purchases for six months) while still earning 5% cashback. Beware the 3% balance transfer fee, though: if you’ve only got a little debt, or you’ll pay it off quickly, you may not save that much by shifting your balance.

In the end, while you can try to optimize for the best 5% categories in the short term, you’re best off considering a card’s perennial features if you plan to keep it for a few years. It comes down to what you value: greater flexibility with the Cash+, a higher rewards cap and a signup bonus with the Freedom, the Citicard’s potential to completely max out a year’s worth of rewards in one quarter, or the Discover It’s balance transfer potential.

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Signing Promo
5% Cashback Bonus for gas and ground transportation on up to $1500 in purchases from Jan. through Mar. 2015 after you sign up for 5% Cashback Bonus. 1% cash back on all other purchases.Get a $100 Bonus after spending $500 on purchases in your first 3 months from account opening.
Intro APR Promo
0% intro APR on purchases for 6 months0% APR for 15 months on purchases and balance transfers
Annual fee
  • No annual fee. No overlimit fee. No foreign transaction fee. No late fee on your first late payment. And paying late won't increase your APR.*
  • 5% Cashback Bonus for gas and ground transportation on up to $1500 in purchases from Jan. through Mar. 2015 after you sign up for 5% Cashback Bonus. 1% cash back on all other purchases.
  • Free FICO® Credit Score on monthly statements, online and in our mobile app.*
  • 100% U.S.- based customer service— day or night.
  • Each Discover purchase is monitored. If it's unusual, you're alerted by e-mail, phone or text-and never responsible for unauthorized Discover card purchases.
  • 0% intro APR* on purchases for 6 months, then the standard variable purchase APR of 12.99% - 21.99%.
  • Free text alerts can remind you when your payment is due. And free mobile app helps you stay on top of your account.
  • *See rates, rewards, free FICO® Credit Score terms and other info by clicking "Apply."
  • Earn a $100 Bonus after you spend $500 on purchases in your first 3 months from account opening
  • Earn a $25 Bonus after you add your first authorized user and make a purchase within this same 3-month period
  • 0% Intro APR for 15 months on purchases and balance transfers. After the intro period, a variable APR of 13.99-22.99%
  • 5% Cash Back on up to $1,500 in combined purchases between 1/1/15—3/31/15 at grocery stores (not including Walmart® and Target® purchases), movie theaters, and Starbucks® stores
  • You'll enjoy new 5% categories every 3 months like restaurants, gas stations, and It's free and easy to activate your bonus each quarter!
  • Unlimited 1% Cash Back on all other purchases
  • No annual fee and rewards never expire as long as your account is open