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The Discover Cashback Bonus program (available to Discover it cardholders) is one of the most versatile rewards programs out there. Along with redeeming for cash, merchandise and gift cards, your rewards can go even further when you pay for online purchases with your Cashback bonus amount.
Let’s take a look at your options and examine which actually makes your cash go the farthest when redeeming your rewards.
1. Redeem for Cash
Like American Express and Capital One credit cards, you can always redeem your Cash Back Bonus for cold, hard cash. Discover gives you two options: a direct deposit into your bank account or a statement credit.
When redeeming for cash, you receive the exact amount in your account with no fees. It’s worth nothing that you need to have at least $50 in rewards to redeem your rewards for cash.
2. Pay with Your Cashback Bonus (Works with Amazon.com)
This is a new redemption option from Discover and it’s the latest way Discover helps you use your rewards how you want. You can now use your Cashback Bonus rewards to pay for online purchases with absolutely no minimum.
There are currently four a growing number of places where your rewards are accepted, including: Amazon, iTunes, Facebook, and Disney Club Penguin. This reward option is face value, so $1 in rewards = $1 to spend at the retailer of your choice. This is one of the best way to redeem rewards, because you are getting the full face value.
Want to know how it works? Here’s what you need to do at each website.
Amazon.com: The process to use rewards on Amazon.com is pretty seamless and makes the official Amazon credit card somewhat obsolete. Start by selecting your Discover card at check out and select the option “Pay with Cashback Bonus” during the process. Once you’ve selected your payment method, you can choose exactly how much of your rewards to apply to your purchase.If your card is already saved in your wallet and you’ve used it on Amazon before, your available Cashback Bonus will automatically appear. If you haven’t used the card on Amazon yet or it isn’t saved, you need to link the card to your account first.To view how much Cashback Bonus rewards you have for shopping on Amazon, go to the Shop with Points page in Your Account or view your balance on the Payments Page during checkout.If you don’t have enough rewards to cover the purchase, you can pay the remainder with your Discover card, an Amazon gift card or an Amazon Payments Stored Value. You can’t use another credit card from another issuer if you’re using rewards points.You can use coupons in conjunction with the rewards.You cannot combine rewards points from multiple programs during a single order.There are also some ineligible purchases: some digital downloads like movies, some gift certificates, Kindle downloads, Subscribe & Save products, AmazonLocal products and AmazonFresh products.
Disney Club Penguin: You can pay for all of your order or just a part of it with your Cashback Bonus rewards and even put the rest of your order on your card if you want. For this option, you need to select your Disney Club Penguin membership and select the “Pay with Cashback Bonus” option.You’ll need to register with RewardsPay, which stores your card information. Once checkout is complete, you’ll receive your activation code. You can use your Cashback Bonus to buy 6- or 12-month memberships.
Overstock.com: Shop at Overstock.com and choose RewardsPay as your payment method. Choose Pay with Cashback Bonus and complete the purchase with your Discover card for a $1 Cashback Bonus to $1 ratio.
Facebook: To use your Cashback Bonus on Facebook, register through RewardsPay and select the Facebook gift card amount. You need to select “Pay with Cashback Bonus” to complete the purchase and receive the gift card number. You can currently buy $10, $25 or $50 Facebook gift cards, which are used for online game credits.
iTunes: Just like Facebook and Disney Club Penguin credits, you’ll need to buy iTunes gift cards through RewardsPay. You can currently buy $10, $15 or $25 iTunes gift cards with your Cashback Bonus rewards.
World Golf Tour: Choose RewardsPay as your payment option at wgt.com, then select Pay with Cashback Bonus. You will receive your credit as a deposit in your World Golf Tour account.
Runescape: You can use your Cashback Bonus to play Runescape and buy a membership. Click on the the “Find Out More” and Discover logo on Runescape.com and choose Pay with Cashback Bonus. You will receive your Runescape code that you can redeem as a credit to your account.
3. Redeem for Merchandise
This option may be a good choice if you’re planning to redeem your points for a gift — or you want to treat yourself to something special. You can redeem your Cashback Bonus rewards for a coffee maker, a Nintendo Wii, an iPhone speaker, a digital camera, a television and more, although you have to watch the redemption value of the item you want. Some items even have a bonus value, allowing you to redeem $20 in rewards for $25 in merchandise, for example.
The trick to using your points for merchandise is checking the price for the item with retailers like Amazon. Always know what the item is worth before you cash in your rewards to make sure you’re getting a good deal.
With a cash back card, there is really no good reason to give up any of the face value of your rewards simply because you can always redeem at full value for cash – so only use this option if you find an item that is actually cheaper than it would be in stores.
4. Use Rewards for Charitable Donations
If you want to use your Cashback rewards to do some good, you can also choose to donate to one of Discover’s chosen charities. You must have at least $20 in rewards to use this option. This option is given at face value, so a $20 donation costs $20 in rewards.
5. Redeem for Gift Cards – Possibly the Best Option
Many people choose to redeem their Discover rewards for gift cards because this versatile option lets you spend your rewards how you want, when you want. You can give out the cards as a gift or use them to treat yourself to a day of shopping. You have two ways to get gift cards with your Cashback Bonus points:
Partner gift cards. This option gives you the most bang for your buck. There are currently over 100 partners, including Shell, Lowe’s, Kohls and AMC Entertainment and you can potentially double your rewards when you choose this option. Rewards are not at face value, so a $25 gift card may only cost you $20 in rewards. The more you spend, the more you can increase your Cashback Bonus rewards!
Discover gift cards. You can also redeem rewards for a Discover gift card, which can be used anywhere Discover is accepted. This reward is face value, so $20 in rewards gets you a $20 gift card.
Want to make your Cashback Bonus go as far as possible? You’ll get the highest redemption value with partner gift cards and sometimes merchandise, which may be available at a discounted price.
If you want the most versatile way to use your points, however, try their Pay with Cashback Bonus option to pay for your online purchases. There’s no waiting for a direct deposit transfer or statement credit with this option and you can use your rewards points for a purchase today.
Credit Shout is a community of personal finance experts dedicated to helping you save money and make smart financial decisions. Learn how to master your credit card rewards, improve your credit score and start eliminating your debt.