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Earning Cashback

How to Earn and Receive Cashback with Discover

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any credit card issuer. This site may be compensated through a credit card issuer partnership.

How to Earn and Receive Cashback with Discover

Discover has a wide range of credit card options, including student cards, travel cards, secured cards, and cashback cards. When it comes to its cashback card, Discover offers some special features for cardholders looking to cash in on rewards.

For starters, the Discover it® Cash Back lets you earn 5% cash back in select, rotating categories up to the quarterly maximum, and 1% unlimited cash back automatically on all other purchases. The 5% is limited to $1500 spending per quarter, 1% after that. Activation is required. Cardholders can also redeem their cash back at any time.

If you have the Discover it® Cash Back card in your wallet, the Discover website is the one-stop shop for managing your credit card and checking on your cash back and redeeming it.

In this article, we’ll touch on:

  • How to earn cash back with your Discover it® card
  • Navigating the Discovercard.com portal
  • How to redeem your cash back

How to Earn Cash Back with Discover

It’s easy to earn cash back with your Discover it® Cash Back, which can make it a top contender when choosing which card you’ll use to make everyday purchases.

In order to take advantage of the 5% cashback offer year-round, you’ll need to spend in certain rotating categories throughout the year.

  • January – March 2020 – Grocery stores, Walgreens and CVS
  • April – June 2020 – Gas Stations, Uber and Lyft, wholesale clubs
  • July – September 2020 – Restaurants and PayPal
  • October – December 2020 – Amazon.com, Target.com, and Walmart.com

With Discover’s 5% cash back, there’s a spending cap of $1,500 each quarter, meaning you can earn a maximum of $75 in cash back each quarter or $300 per year. Activation is required.

However, you can also earn 1% unlimited cash back automatically on all other purchases, and there’s no cap on how much you can spend or how much cash back you can receive, so if you want to maximize cashback rewards, you could possibly earn more than $300 per year.

Don’t Forget …

Discover cardholders have to “opt in” each quarter to start receiving 5% cash back when spending in the rotating spending categories. This is important to remember and easy to do by simply following the prompts in Discover’s reminder email or logging on to your account.

Cash back also doesn’t expire as long as your account is in good standing, so you can stack up your rewards over time if you forget.

New customers may receive special offers like cashback matching, which is when Discover it® matches all the cash back you earn dollar for dollar at the end of your first year. The double cash back will be applied to your account balance after the end of the twelfth billing cycle.

How to Access Cash Back Rewards

When you start earning cash back with your Discover it® card, you can check your available Cashback Bonus right on Discover’s online portal, which is called the Account Center.

Go to Discover.com and type in your login information. Make sure the drop-down menu below the password field says “credit card” so you can access your online account for your Discover it credit card.

discover cash back 1

After you log in, you should see a screen similar to the one shown below. Below you can see the Cashback Bonus available is clearly displayed on this first page along with information about the current quarter’s spending categories and a link to the Cashback Bonus calendar, which provides more information about each 5% cashback spending category.

discover cash back 2

You can click on the button underneath your cashback rewards summary to see a more detailed page, which should look similar to the one below.

Here, you can learn more about earning cash back and redeeming your Cashback Bonus.

discover cash back 3

 

Options for Redemption

Discover it® cardholders can redeem their Cashback Bonus at any time, and you have a variety of options to choose from.

  • Statement credit
  • Amazon.com purchases
  • Gift cards and eCertificates
  • Donation
  • Cash deposit to your bank account

Transferring cash back to your bank

To redeem your cashback rewards for cash, you’ll have to click on the “Redeem For Cash” button after scrolling down to view your redemption options for your credit card account on Discover’s Account Center portal.

When you see a screen similar to the one shown below, enter the amount of cash back you’d like to redeem and click the option that says “Direct deposit to your bank account” if you want to receive the cash instead of applying it to your credit card balance.

Your checking account that you use to pay your credit card bill each month should already be connected to your Discover it®.

account, so you can select it from the drop-down menu below. For the time being, Discover, won’t let you add another account to transfer your Cashback Bonus to.

discover cash bank 7

When you’ve selected the amount you’d like to redeem and the account you’d like to transfer it to, click “Continue” and approve and confirm the transaction.

After you redeem your Cashback Bonus, the time it takes to receive your reward can vary based on the redemption method you chose.

  • Partner gift cards will be mailed to your billing address within 10 business days
  • Electronic deposits will appear in your bank account within 72 hours
  • Account credits will post to your account within 2 business days

Final Word

The Discover it® Cash Back card is a great option for people who like to earn cashback, thanks to its 5% cashback rewards and no annual fee, and it also provides a flexible range of redemption options.

Whether you want to apply your Cashback Bonus to your current balance, use it to shop online or at your favorite department store, or deposit the cash straight to your checking account so you can spend it however you please, you can do all of that and more.

The Account Center portal is also very user friendly and easy to navigate when trying to redeem cash back.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Building Credit

6 Simple Steps to Improve Your Credit Score

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any credit card issuer. This site may be compensated through a credit card issuer partnership.

iStock

Going from a 550 credit score to above 700 may seem overwhelmingly difficult, but it’s doable.

First, let’s quickly review the components of your credit score. Your FICO score is the one most commonly used by lenders who are reviewing your application for a loan or credit. There are five components to a FICO score:

  • Payment history
  • Current credit use/accounts owed
  • Length of credit history
  • New credit
  • Types of accounts

Your payment history makes up the largest percentage of your score, at 35%. This includes your history of making on-time or late payments. A late payment can really put a dent in your overall score — this should be avoided at all costs.

Your current credit use includes the amount of debt you have overall, the amount you owe on each of your accounts, the number of your accounts with balances, your remaining balance on installment accounts and your utilization rate (the amount of debt you have compared to your overall credit limit). Credit use makes up 30% of your overall score.

Next comes length of credit history, which is 15% of your FICO score. The longer you have responsibly maintained credit accounts, the better you will look to lenders.

Finally, new credit and your credit mix both make up 10% of your FICO score. Applying for new credit or loans can have a short-term impact on your score, particularly if a “hard inquiry” is made. This is when your credit report is pulled by a lender ahead of their decision, as opposed to a “soft inquiry,” which occurs when you are pre-approved by a lender. Typically, however, you shouldn’t worry too much about applying for new credit, as any ding to your score is often small and short-lived, while the benefits may ultimately outweigh the downfalls. For example, having access to more credit can help you improve your utilization rate.

Lenders will also look at the different kinds of credit accounts you have, including revolving accounts, such as credit cards, and installment loans, which include student loans, auto loans and mortgages. It can help your score, or your chances with specific lenders, to have a healthy mix of credit accounts.

If your score now isn’t what you want it to be, or if you don’t yet have a credit score at all, we’re here to help. If you follow these six simple steps, you should ultimately find yourself with a score you are pleased with.

Step 1: Get a line of credit

In order to establish credit history, you need to have a form of credit. The simplest way for you to begin will be to open a credit card. If your score is low or non-existent, you might consider applying for a secured or store card.

  • Secured Card: You’ll use your own money as collateral by putting down a deposit of a few hundred dollars with the bank. Typically, that amount will then be your credit limit. Once you prove you’re responsible, you can get back your deposit and upgrade to a regular credit card.

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  • Store Card: People with a low credit score can often qualify for store cards because banks are more likely to approve users who apply through the retailer. The catch is that the interest rates are often very high, so you should do your best to pay off your balance every month. [Read more here]

Target REDcard™ Credit Card

Target REDcard™ Credit Card

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25.15% Variable

Step 2: Keep your utilization rate low

As noted above, utilization is the amount of your credit limit you spend each month. For example, if you have a $500 credit limit and spend $50 in a month, your utilization will be 10%.

Your goal should be to never exceed 30% of your credit limit. Ideally, you should be even lower than 30%, because the lower your utilization rate, the better your score will be.

We recommend you make one small purchase a month, then pay it off as soon as the balance is due, to keep your utilization low and help increase your credit score at a faster rate.

Step 3: Pay in full, and on time, each month

The easiest way to prove you’re responsible is to only charge what you can afford. Never use your credit card to buy an item you won’t be able to pay off on time and in full each month.

Being late on your payments has an extremely negative impact on your credit score, once the late payment has been reported to the credit bureaus (typically 30 days after the missed due date).

Contrary to what some people may tell you, there is also no advantage to only paying the minimum amount due on your card. That will only result in you paying interest on your purchases, and it does nothing to help your credit score. Don’t fall into the minimum payment trap — your wallet will not be pleased.

Step 4: Avoid credit card debt

This goes hand-in-hand with step three. By only purchasing what you can pay off in full, you’ll never accumulate credit card debt.

If you’re already in debt from the misuse of credit cards, make sure you continue to pay at least the minimum due on time each month. Paying on time is the number one indicator of a responsible borrower.

You could also consider applying for a personal loan, and using the money from the loan to pay off your credit card debt. Personal loan companies have interest rates that can start as low as 4.25%, and some will approve people with credit scores as low as 550. You can shop around for a personal loan without hurting your score, because the lenders will approve you using a soft pull (which doesn’t impact your score). A study by MagnifyMoney’s parent company Lending Club showed that people who paid off their credit card debt with a personal loan saw their score increase by 31% on average, right away. You can look for the best personal loans using this personal loan tool at LendingTree. [Disclosure: LendingTree is the parent company of MagnifyMoney.] With a single application, you can check your rate with dozens of lenders. And the best part: LendingTree uses a soft pull, which means your credit score will not be negatively impacted.

After you pay off your credit cards with the proceeds from the loan, do not build up your debt again. Instead, just make one purchase each month and pay it off in full.

Once you pay off your cards, resist the urge to close them. Closing your cards will not only lower your utilization rate but remove history, which damages your score in the “length of credit history” category. The longer your credit history, the more time you have had to prove yourself as a responsible credit card holder.

Step 5: As your score improves, so do your options for better credit cards

You’ll start to get credit card offers as you begin to build your credit history and improve your score. Credit card companies still love sending snail mail.

Beware of any offers, especially for cashback cards, while your score is below 650. These cards typically provide little value and can smack you with high interest rates if you fail to follow step three.

Not sure if an offer is a good deal? Try checking it out in our cashback reward cards page. Our Magnify Transparency Score will help let you know if it’s the real deal.

Once you get your credit score above 680, the good credit card offers will start rolling in. You can have your pick of the top-tier reward credit cards and start using your regular spending to get cash back or rack up points for travel.

Step 6: Protect your score

Once you’ve achieved a higher credit score, but sure to protect it by following these steps:

  • Always pay on time – late or missed payments will cost you dearly
  • Try to keep your credit used below 30% of your available credit
  • Be sure to check your credit reports for accuracy and signs of fraud – you’re entitled to one free report per year from each of the three credit bureaus. You can get your reports at AnnualCreditReport.com.

If you have any questions or just want a helping hand, please reach out to us at [email protected] or tweet us @Magnify_Money

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Building Credit

Myth Busters: Do You Need to Carry a Balance on a Credit Card to Raise Your Score?

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any credit card issuer. This site may be compensated through a credit card issuer partnership.

There is one persistent credit card myth that befuddles consumers from all walks of life. Parents tell children. Friends tell each other. Managers lecture employees. “You should carry a balance on a credit card,” they announce in authoritative voices. “It’s good for your credit score.”

In reality, there is absolutely no need for you to carry a balance on a credit card, and it is not a good way to build a strong credit history. Carrying a balance can, in fact, hurt both your credit score and your wallet.

Let’s break this down, and end the confusion for once and for all.

You have two main options for paying your credit card bill

1. Pay The Minimum Due

When your statement comes in the mail, or via email, or appears in the online portal for your credit card, it will show the total balance due, as well as a minimum amount due. If you owe $1,500, for example, your minimum due may be just $45.

Sure, you can pay the $45 and your credit report will reflect that you paid on time, and this won’t hurt your score. However, this strategy will ding your wallet because you’ll start paying interest on the outstanding balance due (unless you are still in the promotion period for a 0% credit card).

2. Pay the Balance

This one is simple and should be your go-to move. When you have a balance due and it shows on the online portal, or when you get the statement in the mail, pay it off on time and in full by the due date. In this case, your lender, the credit bureaus and your wallet should all be happy.

Where the confusion probably started

This myth may have started because many personal finance experts advise consumers to be active users of credit in order to build a history and be desirable to lenders.

It is true that you should actively use your credit cards so you can demonstrate responsible credit use. However, this doesn’t mean you need to carry a balance. All you need to do is use your card on a regular basis, then pay it off.  Even making a small monthly charge (say, your phone bill) can do the trick; this is something that can be set up automatically.

Then, every month, you should pay that charge off in full. What you shouldn’t do is receive the statement and just pay the minimum due – thus carry a balance. Again, while it doesn’t hurt your credit score to only pay the minimum due, you only end up paying more in interest to the bank. Why pay your lender more than what you paid when you made the charge to begin with? There is simply no benefit to this.

To put it in simplest terms

  1. You don’t need to carry a balance to have a good credit score. In this case, carrying a balance means only paying the minimum and always owing money to your credit card company.
  2. You do need to be an active user of your credit card if you want to build credit. Making even small purchases on the card on a regular basis and then paying off the balance will have a positive effect on your score, as it will demonstrate you are a responsible user of credit.

What if you can’t pay in full?

If you’ve charged more to your credit card than you can afford, you should at least pay the minimum due, plus as much as you can afford on top of the minimum. Not paying at all or waiting until after the due date will result in major damage to your credit score.

One missed payment reported to the credit bureaus (typically 30 days after the due date) could mean up to 100 points off your credit score. So, if you’ve put yourself in a tough situation, at least pay the minimum by the due date.

One way you can avoid paying interest if you can’t pay your balance off in full is by considering a balance transfer. With a balance transfer, you can pay an intro 0% APR for 15 months or longer. Thus, you can pay your debt off a bit more slowly without incurring wallet-damaging interest. You can review several balance transfer offers here.

Capital One® Quicksilver® Cash Rewards Credit Card

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on Capital One’s website

Capital One® Quicksilver® Cash Rewards Credit Card

Intro Purchase APR
0% intro on purchases for 15 months
Intro BT APR
0% intro on balance transfers for 15 months
Regular Purchase APR
15.49% - 25.49% (Variable)
Annual fee
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Credit required
excellent-credit
Excellent

Chase Freedom®

The information related to Chase Freedom® has been independently collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

Chase Freedom®

Regular Purchase APR
16.49% - 25.24% Variable
Intro Purchase APR
0% Intro APR on Purchases for 15 months
Intro BT APR
0% Intro APR on Balance Transfers for 15 months
Annual fee
$0
Rewards Rate
Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate. Enjoy new 5% categories every 3 months. Unlimited 1% cash back on all other purchases.
Balance Transfer Fee
3% when you transfer during the first 60 days of account opening, with a minimum of $5
Credit required
good-credit

Excellent/Good

Other credit score resources

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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