How to Maximize the Discover It 5% Bonus for Q1 2018: Gas Stations and Wholesale Clubs

The Discover It 5% cash back categories for Q1  (Jan-March) 2018 are gas stations and wholesale clubs. As a reminder, you need to activate the 5% promo to receive the cashback bonus. Earn up to 5% on up to $1,500 in combined category purchases when you activate.

If you're in the first year of your Discover It card, then the 5% cash back is 10% with Cashback Match. 

You can view credit card offers by going to the "Credit Card Offers" tab. Find offers for the respective cards in "Cash Back Credit Cards." You don't have to use our links, but we're grateful when you do. Thank you for supporting AskSebby!

Wholesale Clubs

I'm a fan of the wholesale clubs category because I shop at Costco often. The main issue with Costco is that they don't accept Discover in-store, so you either have to make online purchases or buy Costco gift cards to use in-store. 

Keep in mind that if you do use gift cards to purchase items, you lose the protections that some credit cards offer. Costco has a great return policy and stands by their products, so I'm usually not worried about it. 

Another factor to consider is that Discover is removing key protections starting in Feb 2018:

Gas Stations

If you own a car, one strategy is to buy gas gift cards to use for the year. One thing to be aware of is that some purchases made at gas stations affiliated with superstores and supermarkets may not be eligible. Always run a small test transaction first to see if the merchant qualifies as a gas station.

In San Francisco, some 7 Eleven convenient stores code as gas stations, even though they don't sell gas. You can find gift cards to retailers like Amazon, T-Mobile, and Target. 

Optimal Strategy

The gas station category overlaps with the Chase Freedom and the Discover It this quarter. If you're still in the first year of your Discover It card, then it makes sense to use the Discover It over the Chase Freedom because of Cashback Match. 

If you're not in the first year of your Discover It card, then I think it's more valuable to use the Chase Freedom. 5x points are valued at a higher rate when redeemed for travel if you transfer the Ultimate Reward points to the Chase Sapphire Reserve or the Chase Sapphire Preferred.

If you are planning to max out the 5x categories for both the Chase Freedom and the Discover It card, then it might help to put the transactions in "buckets."

A = Mobile Payments (Chase Freedom)
B = Gas Stations (Chase Freedom + Discover It)
C = Wholesale Clubs (Discover It)

$1,500 in each:

  1. A + B =
    A = Freedom
    B = Discover It
  2. A + C =
    A = Freedom
    C = Discover It
  3. B + C = 
    B = Freedom
    C = Discover It

Use the card combination where you can optimize spend. For example, if you plan on $1,500 in gas station purchases and $1,500 at wholesale clubs, then combination 3 is the way to go. Combo 3 optimizes for 5x back (more w/ CSR) at gas stations with the Chase Freedom, and 5x back at wholesale clubs with the Discover It.