Best Use of Discover card rewards

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Tried to post on existing thread but its archived(1-2 yrs old).

Wanted to get suggestions on best use of discover card reward. Seems to be the 10-20 bonus added gift cards.

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Seriously...!?! WTF. Thank you. Direct Deposit from now on.

MADWAD (Apr. 07, 2013 @ 9:03p) |

DD is better than statement credit, but $40 (or even $45) towards a $50 gift card to somewhere you're shopping anyway is... (more)

icecube (Apr. 07, 2013 @ 10:12p) |

When do you folks cash in your discover rewards? I have $362 in rewards right now, Just not sure what I want to do with ... (more)

cljnco (Apr. 08, 2013 @ 12:34a) |


Sams Club membership $40 rewards for $50 GCs ($40 + $10) -- these are just regular GCs that can be used at Sams Club or WalMart

Recent thread: http://www.fatwallet.com/forums/finance/1226734/

I got CVS gift card. They sometimes have good diaper and baby swipe deal.

jatan1986 said:   Sams Club membership $40 rewards for $50 GCs ($40 + $10) -- these are just regular GCs that can be used at Sams Club or WalMart

Recent thread: http://www.fatwallet.com/forums/finance/1226734/

I agree. It's OOS right now.

CSREwallet said:   jatan1986 said:   Sams Club membership $40 rewards for $50 GCs ($40 + $10) -- these are just regular GCs that can be used at Sams Club or WalMart

Recent thread: http://www.fatwallet.com/forums/finance/1226734/

I agree. It's OOS right now.


Ya, I bought 10 of them like two weeks ago. They go fast when they are in stock.

Just noticed this in Discover: Direct Deposit your CashBack Bonus directly into a bank account starting at $50, in $50 increments. This avoids the Statement Credit erosion problem mentioned in that linked thread. Also beats Amazon because I can use other reward cards on Amazon. What do you guys think?

If you cannot benefit from the gift card discount from discover, direct deposit is a good option, I think. It's liquid money after all.

nanotube said:   Just noticed this in Discover: Direct Deposit your CashBack Bonus directly into a bank account starting at $50, in $50 increments. This avoids the Statement Credit erosion problem mentioned in that linked thread. Also beats Amazon because I can use other reward cards on Amazon. What do you guys think?I've done statement credit a few times and this erosion point is new to me. I've never noticed any erosion, but it may be because I use my card almost exclusively for the 5% categories.

When I get $20 in rewards, I get the $25 Staples card, then cash it in for $21 at cardpool.com. I know I could do better with FAR, but this is easier for me.

haoniukun said:   I got CVS gift card. They sometimes have good diaper and baby swipe deal.Given that you shop at a number of the stores with gift cards sold at less than par value, the fact that CVS has good deals should not be relevant. IE if you shop at both CVS and Staples, you are best off spending $40 of Discover CashBack getting $50 of Staples gift cards, rather than $40 of Discover CashBack, getting $45 of CVS gift cards.

Besides, if you are shopping at CVS with skill, your out of pocket should be mere dimes on your transactions

I still do Staples. They have plenty of free after rebate stuff to cash out on. The Sams/WalMart $40 for 50 doesn't sound too bad either.

centrifuge41 said:   haoniukun said:   I got CVS gift card. They sometimes have good diaper and baby swipe deal.Given that you shop at a number of the stores with gift cards sold at less than par value, the fact that CVS has good deals should not be relevant. IE if you shop at both CVS and Staples, you are best off spending $40 of Discover CashBack getting $50 of Staples gift cards, rather than $40 of Discover CashBack, getting $45 of CVS gift cards.

Besides, if you are shopping at CVS with skill, your out of pocket should be mere dimes on your transactions

I still do Staples. They have plenty of free after rebate stuff to cash out on. The Sams/WalMart $40 for 50 doesn't sound too bad either.


The problem is I can walk to a CVS store. But Staples stores are hundred miles away. You're right. I just bought a Pampers Jumbo pack with 84 cents from CVS.

bksavings said:   When I get $20 in rewards, I get the $25 Staples card, then cash it in for $21 at cardpool.com. I know I could do better with FAR, but this is easier for me.Having to mail the GC to them seems unnecessarily risky for the tiny gain.

scripta said:   bksavings said:   When I get $20 in rewards, I get the $25 Staples card, then cash it in for $21 at cardpool.com. I know I could do better with FAR, but this is easier for me.Having to mail the GC to them seems unnecessarily risky for the tiny gain.

Yeah. What is that like 55 cents after the stamp...lol

I think you are missing the point, the reason for cashing out Discover rewards this way, is for the fact that Discover makes you wait until you have $50 in rewards if you want to CASH out your points, not for the extra $1 that you get.

If you have only $20 in points you CAN NOT cash out through Discover. This way allows you to get cash if you only have ~$20 in rewards.

(...and there is no cost for "stamps", they send you a pre-paid label to print out.)

nkha1 said:   scripta said:   bksavings said:   When I get $20 in rewards, I get the $25 Staples card, then cash it in for $21 at cardpool.com. I know I could do better with FAR, but this is easier for me.Having to mail the GC to them seems unnecessarily risky for the tiny gain.

Yeah. What is that like 55 cents after the stamp...lol

A Discover Card can be linked to Amazon and you can redeem your points at any amount instead of waiting to reach a level like $50.

http://www.amazon.com/gp/feature.html/?ie=UTF8&docId=1000796561&

more info -
http://www.amazon.com/b/?_encoding=UTF8&ie=UTF8&node=2634438011

Dahliabug said:   A Discover Card can be linked to Amazon and you can redeem your points at any amount instead of waiting to reach a level like $50.

http://www.amazon.com/gp/feature.html/?ie=UTF8&docId=1000796561&

more info -
http://www.amazon.com/b/?_encoding=UTF8&ie=UTF8&node=2634438011


great for burning through points, but I would advise against this for marketplace purchases and electronics as you lose chargeback abilities and extended warranty coverages.

I don't see how cardpool is superior to the $20 Discover gift card if all you're interested in is liquidity

Visa/MC/AMEX/Discover gift cards are always inferior to cash (or a check). You can deposit a cash and/or check, then spend the corresponding amount using a rewards credit card. When burning down a Discover (et al) gift card, you have an opportunity cost of the rewards that you could have been earning.

No, both posters already conceded that $1 more was not a good enough reason to add the inconvenience and risk of mailing out a gift card. The rewards on $20 will not be more than $1 either.

I have given this issue a lot of thought. In my view, the discounted giftcard option is clearly the best choice, in virtually any situation for virtually anyone. Which giftcard? The best answer depends on two factors: 1) determine which stores participating in the discover gift card reward program you will undoubtedly buy things from in the future; 2) among all stores that apply to #1, determine which store(s) are the toughest to find coupons and/or discounts and/or discounted gift cards from elsewhere.

Me? I used to buy Staples giftcards. I would use the Staples giftcards with $25/$75 coupons to buy 3tb hard drives when they were around $100. Thats how you have to think people. You get "free" money from discover, you use that free money to buy a discounted giftcard, getting even more freeer money, and then buy something with a crazy good coupon when it goes on clearance. If you think like that, then you have achieved the great wisdom and good grace that FW strives to bestow upon you.

Now? Well I got around three 3TB drives and other smaller ones laying around collecting dust, so I don't need anything from Staples anymore. But we all need our timing belts changed regularly, right? So I switched over to the pep boys $20 for $25 giftcards. I found that if you buy something from pep boys that involves a mail-in rebate, they will send you a 10% off your next service coupon along with the prepaid rebate giftcard. So when there is foreseeable auto service in my future, I 1) buy some small thing at pep boys that comes with a rebate and 10% off coupon or just buy a 10% off coupon from eBay; 2) get a written estimate from pep boys for the work; 3) determine if I can save money buy having them install parts I get from Amazon/AutoPartsWarehouse/etc and buy accordingly if the answer is yes; 4) count up my discover pep boys giftcards and determine if I am short; 5) get whatever additional giftcards I will need to pay for the repair from giftcard rescue or ABC giftcards at a 9-10% discount to cover the difference (using my discover card to pay for the gift cards, of course lol); 6) pay for the repair using only giftcards.

so there you have it, thats how I roll.

bksavings, I am sorry to disagree, but earning a profit of $1 on $20 of discover card rewards is among the poorest choices one can make.

OliverQuackenbush said:   bksavings, I am sorry to disagree, but earning a profit of $1 on $20 of discover card rewards is among the poorest choices one can make.

bksavings said:   I think you are missing the point, the reason for cashing out Discover rewards this way, is for the fact that Discover makes you wait until you have $50 in rewards if you want to CASH out your points, not for the extra $1 that you get.

Read what I wrote again.

I did read what you wrote, it does not make a difference unless you are 92 and think you might die somewhere between $20 in rewards and $50 in rewards. Moreover, you can buy many $25 giftcards for $20, so I am not even sure why you are focusing on the more expensive giftcards to support your view that a $1 profit on $20 in rewards is a good choice, especially when you can get a $25 giftcard to a place you might shop anyway. It is true that if you had $50 in rewards and had to choose between 1) two $25 Staples giftcards sold to cardpool resulting in $42 profit for you plus $10 discover Cash Back rewards remaining; or 2) a $50 statement credit, you are better off using your method. But the two options you present are not exhaustive of all the options one with $50 in Cash Back rewards have. There are more options than just either a statement credit or selling giftcards to cardpool. Heck, one would assume that someday you might need paper, am I right? If I am right, even the simplest analysis reveals that you are losing $4 on the paper you will imminently purchase because you sold your $25 giftcard for $21.
But I would not recommend using the rewards as described above, because in my earlier post you can clearly do much better. I am merely providing a very simple example of why cashing out giftcards is a poor financial decision.
My post above covers every possible angle I can think of, including using discover to earn %5 rewards on the additional giftcards you purchase online, thereby helping you earn giftcards for the future!! But if there is an angle I have not thought of, please share!!

OliverQuackenbush, Iím sure there are plenty of ways to get merchandise at great values with Discover cash, and you are free to do whatever you want with yours.

But there are some people who read FWF who would rather have $20 in cash, than $40 in copy paper. (forget the extra dollar you are hung up on)

Iím just sharing in this forum how to get cash with less that $50 of Discover Cash for those of us who would rather have cash. This whole thread is full of ideas, and people can do whatever they feel like. No need to take it personally.

Of course people can do whatever they want. I was just pointing out the best possible choice and explaining why it is the best choice. I am not sure why you think anything was taken personally?

I'll eventually end up using mine to (hopefully) satisfy a DD requirement for a bonus with the deposit if ACH doesn't work.

I usually buy Staples GC and churn through their rebates for a check. The occasional 10%, 20%, 5 off 30 coupon ensures my sales tax are minimum. So far so good.

The best way to redeem was Sam's Club, and now it's gone:
Sam's Clubģ $40 Membership + $10 is no longer available. We apologize for any inconvenience.

I buy $40 rental car gift cards for $20 discover CashBack. Then I use the gift cards to rent cars during reimbursible travel for work. I only use Discover for 5% categories so it's effectively a 10% CB card for me!

I need to get on there and check more often for GCs. I have way too much CB rotting on there.

carpedinero said:   I buy $40 rental car gift cards for $20 discover CashBack. Then I use the gift cards to rent cars during reimbursible travel for work. I only use Discover for 5% categories so it's effectively a 10% CB card for me!They are not gift cards, they are certificates with a ton of restrictions -- the enterprise one "may not be used with corporate rates, travel agency rates or any other rates, any promotional offers or discounted rates", and alamo one is only slightly better. You found a nice loophole for yourself, but it won't work for everyone, because their "standard rates" are ludicrous, and better deals are always available online.

And one potentially big problem with the rental car certificates -- your credit card CDW only works if you pay the entire bill with your card.

Is the best option for Discover Miles to buy physical Amazon gift cards and then resell on eBay? You know, other than travel obviously (both are 1-to-1 redemptions, everything else is pretty bad).

I see that the merchandise redemption option is going away after 3/31/13...was there anything worth redeeming there or all of the items were at inflated prices. I was thinking of splurging on an Omaha Steaks package, but there was not a good value there.

I don't think I've ever seen merchandise from any rewards program that was worth the asking price in points. I don't even look anymore.

lauren75 said:   I see that the merchandise redemption option is going away after 3/31/13...was there anything worth redeeming there or all of the items were at inflated prices. I was thinking of splurging on an Omaha Steaks package, but there was not a good value there.The problem is - looks like Discover Exclusives already went away as a part of the merchandise redemption option, and it had good offers once in a while

The best way to redeem Discover Card rewards is to redeem $25 for a $50 Kia Gift Card and then sell them for $30-35 to someone who is trying to accumulate enough to purchase an entire vehicle at a 30-40% discount.

I just get the statement credit. It might not be the most cost-efficient, but it saves me the time and hassle of coming up with anything better or getting stuck with a gift card I don't really want or need and then have to figure out what to do with. It takes a matter of seconds to click on the option to get a statement credit, and then I save myself some cash on my next statement. It works for me.

I just use my Discover Cash Back to finance Amazon Prime membership.

TooManyCards said:   I just get the statement credit. It might not be the most cost-efficient, but it saves me the time and hassle of coming up with anything better or getting stuck with a gift card I don't really want or need and then have to figure out what to do with. It takes a matter of seconds to click on the option to get a statement credit, and then I save myself some cash on my next statement. It works for me.

elist said:   

Unless they've changed the terms, you're hurting your own CashBack with statement credits.

In the past (and I'm assuming now) when they calculate the CashBack for that month they do it like this:



Assumptions-$1000 spent that statement period, $100 statement credit, 2% CashBack rate

We would normally think it works like this:

$1000(balance) x 2% (CashBack rate)=$20 (CashBack earned) THEN $1000 (balance)-$100(statement credit)=$900 due

When in fact it works like this:

$1000(balance)-$100 (statement credit) x 2% (CashBack rate)=$18 (CashBack earned) THEN $900 due

In this example you're cheating yourself out of two dollars.

So for many of us, it is worth getting the gift card with maybe 10% more value, plus not cannibalizing our own CashBack. Anyone please correct me if I'm wrong.

edit:fixed a label

Skipping 4 Messages...
When do you folks cash in your discover rewards? I have $362 in rewards right now, Just not sure what I want to do with them. I have seen deals in the past, But doesn't seem so much anymore.



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