BREAKING: Discover Announces Rotating Rewards Categories for 2011 | CreditShout

BREAKING: Discover Announces Rotating Rewards Categories for 2011

By Kevin / December 7, 2010


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Discover was the first company to introduce the concept of “rotating rewards categories” for cardholders, rolling out the program with its flagship Discover More card. Chase Freedom followed suit and, in the middle of last year, Citi rolled out a similar program (only with 3% cash back on purchases) for its Citi Dividend Platinum Rewards card.

With all three programs, you must “opt-in” by the deadline date in order to receive 5% (or 3% with Citi) cashback on purchases made in select categories that change each quarter.

Discover More once again leads the trend by announcing its categories for all four quarters of 2011 recently.

What are the Discover More rewards categories for 2011?
  • January – March 2011: Airlines, car rentals, hotels, cruises, restaurants. Sign up now for your January through March rewards.
  • Also in March 2011: Grocery and drug stores. Sign up begins February 1.
  • April – June 2011: Home improvement, department stores, clothing stores. Sign up begins March 1.
  • July – September 2011: Gas, hotels, movies, theme parks. Sign up begins June 1.
  • October – December 2011: To be announced.

If you aren’t a cardholder yet, you can apply for the Discover More $100 Bonus Cash Back here.

Are Rotating Categories a Benefit to Customers?

Typically, credit card companies receive 1 to 3% transaction fees from merchants when customers use a credit card. So credit card companies aren’t really losing anything with 1 or 2% cash rewards. They’re still getting merchant fees from all those customers without rewards cards, and the merchants are, technically, paying for most of the customers’ cash rewards anyway.

But when credit card companies up the ante to 5% cashback rewards, it appears to be a sacrifice on their part. The fact is, they’re making it look like they’re giving customers a great deal when, in reality, a lot of customers don’t take advantage of the extra cash back.

First, you have to remember to “opt-in” for your bonus rewards, and most people just don’t remember. Then, you have to remember which cards give you bonus points in which category each quarter, and use the right card at the right time. Finally, some credit cards have minimums you have to spend each month or year before you can start earning 5% bonus points. Others have a limit to how many bonus points you can earn — or, worded another way – a cash limit for bonus points. For instance, the Discover More card only offers you 5% cash back on your first $800 in bonus category purchases in January through March.

Yes, rotating categories can be a benefit (after all, 5% is better than 1% any day!) but you have to know how to play the game to win.

Getting the Most Out of Your Rewards

Here are a few tips so you can get your 5% cash back bonuses and maximize your rewards each quarter.

  • Set up automatic reminders through your email, calendar or smartphone with opt-in dates for rotating categories on your credit cards. Do this now, as companies announce their categories and opt-in dates, so you don’t forget.
  • Remember to opt in when you get that reminder!
  • Keep track of rotating categories with a sticker on the back of your card.

A fellow finance blogger at MyMoneyBlog shared that last tip and I thought it was a really good idea. Just write that quarter’s categories on a small sticky note and put it on the back of each credit card, that way you can always pick the best card for every purchase and maximize your rewards.

You could also keep the information in a note in your smartphone if you don’t want stickers on cards in your wallet. The point is, keep track of categories to maximize your rewards points.

Apply for the Discover More $100 Bonus Cash Back here.

  • Credit Required
    Excellent Credit
  • Rewards Program
    5% cash back on rotating categories on up to $1,500 each calendar quarter when you sign up*. 1% cash back on all other purchases.
  • Signup Bonus
    0% Intro APR on purchases and balance transfers for 14 Months*
    Then the variable purchase APR applies, currently 10.99% - 22.99%. A fee of 3% applies for each balance transferred.

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