Among the many options for no-fee cash back credit cards, I believe the Discover It card to be one of the better ones. Like the Chase Freedom card, the Discover card offers rotating quarterly 5% cash back categories. And, like American Express cards, the Discover card has special offers in which cardholders can often save quite a bit at various merchants. These “Discover Extras” often come in the form of automatic statement credits. And, best of all, having a Discover card gives you access to the ShopDiscover portal which often offers much better rebates than any other online portal.
Another interesting aspect of Discover cash back cards is that the cash back is sometimes worth more than its stated value when redeemed for gift cards. Discover offers many options for partner gift cards in which the stated value of the gift card is greater than the amount of Discover Cash needed to buy it. For example, you can use $20 in Discover Cash to buy a $25 Staples gift card. That’s a 20% discount!
Last summer, I investigated these options in the following posts:
- Maximizing Discover rewards: car rentals
- Maximizing Discover rewards: Hyatt
- Maximizing Discover rewards: Universal Orlando Resorts
- Maximizing Discover rewards: real value from merchant gift cards
At the time, the only real deals I found were from merchant gift cards. The terms and conditions of the travel related gift cards seemed to make them almost worthless. For example, the car rental deals appear to be terrific: $20 in Discover Cash for a $40 Alamo, Enterprise, or National car rental gift card. That’s a 50% discount! However, the on screen terms say, for example:
- One certificate per National rental
- Not valid with any other offer, discount or promotional rate
If those terms were true, the best you could do is save $20 by using just one certificate and you would have to give up any other discounts you might have used. As a result, in my earlier post, I argued that there are very few situations where these certificates would really be worth using.
Two things have changed since I wrote the Discover rewards series over the summer. One change is that Discover has switched out the old Hyatt certificate (which had many restrictions) for a regular Hyatt gift card. The face value discount is much lower than before, but the new option is a reasonably good way to save 10% on Hyatt stays within the US, Canada, and Caribbean. The second change was that I learned how wrong I was about car rental certificates. Several readers let me know that they were able to use multiple certificates at once and apply discount codes on the same reservation.
I tested out the rental car discounts this past weekend. I used Discover Cash to buy three $40 National car rental certificates for $20 each. I then found the best deal I could and applied all three certificates to the reservation. My total bill was reduced by $120. I had no problem using multiple certificates and no problem combining with a discount code. Here’s a cut out from my receipt:
This was pretty amazing since it meant that I got $120 in value from $60 in Discover Cash! It’s also worth noting that even though the certificates say that you must have them with you at the time of rental, National never asked to see them.
UPDATE 10/26/2015: You can now only use 1 certificate per rental.
Investigations to come
Now that I know that some of the terms & conditions of Discover’s partner gift cards are completely wrong, I plan to take another look at what’s available. Are all of the car rental gift cards as worthwhile as I found the National ones to be? What is the maximum number of certificates that can be used on one reservation with each car company? Are the Universal Studios gift cards or the cruise gift cards better values than I previously thought? Are there any new merchant gift cards worth considering?
Do you have recent experience in redeeming Discover Cash for partner gift cards? What has your experience been? Have you managed to get outsized value from your cash back? Please comment below.
Last updated on October 26th, 2015