Published in: Credit Cards | Jan. 14, 2019
By: Lyle Daly
It may be the most enjoyable thing you can do with your credit card -- redeeming all those rewards you've accumulated. With Discover credit cards, those rewards can come in the form of cash back or miles, depending on which card you have.
Discover keeps the redemption process fairly uncomplicated, but there are some important things to keep in mind as you go through it.
Most of Discover's cards are cash-back cards, with the most popular being the Discover it® Cash Back and the Discover it® chrome. Consumers who are still in college can opt for the student versions of those with the Discover it® Student Cash Back and the Discover it® Student chrome.
Although cash back seems like a straightforward type of reward, Discover actually gives you four ways to redeem your cash back:
Standard cash back tends to be the best option, although gift cards can also be a good choice if you find one with a merchant you like, as you get a $5 bonus on any gift card purchase. For example, if you spend $20 in cash back, you can get a gift card worth $25.
The one option to avoid is paying on Amazon with your cash back. It makes no sense to do this, because you could just pay for the Amazon purchase with your Discover card so that you earn rewards on what you spend, and then apply your existing cash back as a statement credit to cover the cost of the purchase. If you pay on Amazon using your cash back, you won't earn any additional rewards.
Here's how the redemption process works:
1. Log in to your Discover account.
2. Click on "Ways to Redeem," which is under your current cash-back balance.
3. Click on the cash-back redemption you want.
You'll have the four options mentioned above. After this step, completing your redemption depends on which option you choose.
Cash back -- Enter the amount of your cash back that you want to redeem. Select whether you want a statement credit or a direct deposit to your bank account, and then submit your redemption.
Amazon -- Log in to your Amazon account and link your Discover card to it. When you're going through the checkout process for an order, select your Discover card as the payment method, and you'll be able to apply your cash back towards the purchase.
Gift cards -- Choose the gift card you want and submit your redemption. You can filter gift cards by the type of business offering them and the minimum gift card amount. The minimum redemption amount here is $20 for a $25 gift card, but certain gift cards will have higher minimums.
Charity -- Pick a charity from the list, enter the amount you want to donate, and submit your redemption.
If you have the Discover it® Miles, then you'll be earning Miles instead of cash back. There are three ways to redeem Discover Miles:
You get the same fixed rate of $0.01 per Mile regardless of the redemption method you choose. This makes the Discover it® Miles somewhat unique among travel rewards cards, as most offer a much better rate with travel redemptions than with cash-back redemptions.
I wouldn't recommend using Discover Pay With Miles for the same reason I don't recommend using cash back to pay for Amazon purchases. You could earn Miles on the purchase by using your Discover card instead, and then simply redeem your Miles for cash back to cover the amount of the purchase. If you pay with your Miles, you won't earn any rewards on the purchase.
Here's the redemption process if you want a statement credit or cash back:
1. Log in to your Discover account.
2. Click on "Redeem Miles."
3. Select from a travel credit or a direct deposit.
If you selected a travel credit, you'll need to choose the travel purchase you want credited back with your Miles.
For a direct deposit, you must enter the number of Miles you wish to redeem as cash back.
The entire process of redeeming Discover rewards can be done in minutes. Log in to your account, pick the redemption option you want, and you can tap into that rewards balance you've been building.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
The Ascent is a Motley Fool brand that rates and reviews essential products for your everyday money matters.
Copyright © 2018 - 2020
The Ascent. All rights reserved.