Discover Announces 5% Bonus Categories for First Quarter of 2023
image collage of Discover It Q1 2023 bonus categories

Discover Announces 5% Bonus Categories for First Quarter of 2023

The popular Discover It card — which features 1% on all purchases as well as a slate of bonus rotating categories each quarter — has revealed what purchases will earn cardholders that 5% bonus starting January 1st. For the first quarter of 2023, Discover It cardholders can earn 5% back on grocery store, drug store, and select streaming service purchases. However, there are a few asterisks to note with this offer.

First, while the “grocery store” category includes supermarkets, meat lockers, bakeries, small grocers, and grocery delivery services, it excludes other options, such as Target and Walmart stores, as well as warehouse clubs among others. Secondly, for the Select Streaming Services category, Discover notes that services billed through third parties may not qualify for the bonus. Additionally, as always, this 5% cashback category is capped at $1,500 in combined category spending per quarter for a total of $75 cashback in the quarter. Lastly, as a reminder, cardholders do need to activate this bonus category in order to begin earning.

Looking back, Q1 of 2022 also featured Grocery stores (excluding Walmart and Target) but included fitness clubs and gym memberships. Meanwhile, the current quarter includes purchases on Amazon.com as well as those made using Digital Wallets. Subsequent 5% cashback categories for 2023 are set to be announced in the new year, with Q2’s revealed on March 1st, Q3’s coming on June 1st, and the final quarter’s categories being unveiled on September 1st, 2023.

In a statement regarding next quarter’s update, Discover’s VP of Rewards and Product Strategy Geeta Chandan said, “Every year we focus on categories that enhance the customer experience and enable consumers to earn Cashback Bonus rewards on everyday purchases. Consumers are looking to earn on essentials as prices continue to rise and we’re excited to offer more ways to do so.”

The apparent plan for Discover to announce its 5% quarterly bonus categories just one month before they’re active is a departure from how the card company has previously operated. For example, in November 2021, the full year’s quarterly calendar was released. Interestingly, the “one-at-a-time” approach has been employed by Chase for its Freedom Flex card, with the bank typically revealing the upcoming quarter’s categories a month in advance.

Overall, while Discover’s 5% bonus category selections for the first quarter of 2023 are fairly solid, the more interesting story is the company’s decision to delay future announcements. While there’s surely some strategy to this decision and allows Discover to be more nimble, the downside is that those considering the It card may have a hard time predicting whether or not they’ll get enough value from the card this year to apply for it. Ultimately, we’ll have to see whether this change impacts Discover negatively and/or how the company could use this adjustment to its advantage.

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