Friday, October 3, 2014

Q4 Bonuses for Chase & Discover 5% Back

As some of you may know, Chase Freedom and Discover IT are very similar credit cards with comparable benefits. Both earn you 1x back on regular purchases, but have rotating quarterly categories that can earn you 5x up to $1,500 of spend in those categories.

Of course, the primary difference is that Chase Freedom earns you Chase UR points which can be either (a) redeemed as cash back for 1 cent/pt or, if you have a premium Chase UR card, (b) transferred to airlines and hotels such as United and Hyatt.

This redemption method can get you more value as we've done in the past such as putting my grandmother and her sisters up in a luxury suite at the Park Hyatt in Busan, South Korea.

Discover IT, however, only earns you 1 cent/pt in cash back, though you can also find deals for discounted retailer gift cards (i.e. $20 for a $25 AMC gift card).

Clearly we prefer earning a Chase UR point over a Discover point, but both are valuable in their own way. But fortunately, there are ways to maximize both at the same time.

For example, this Q4 (Oct-Dec 2014), you can earn 5% or 5x on your Chase Freedom card and Discover IT cards at similar retailers.

A. Chase Freedom - 5x on Amazon, Zappos or department stores
B. Discover IT - 5% on online shopping and department stores

So if you have both cards, you'd need to spend $1,500 on each to maximize your bonus potential, or $3,000 total in 3 months.

But remember, our #1 rule - NEVER spend more than you do normally to play this credit card rewards game. That defeats the purpose of "free."

However, instead of talking through theory, here's EXACTLY what my father plans on doing to spend $3,000 without actually spending a single penny more than he would normally.

1. Using his Discover IT card for Amazon Payments. Until the October 12, you can send a $1,000 transfer to a friend who will then send $1,000 back to my mother. No additional fees. Fortunately, Amazon Payments codes as "online shopping" for Discover and will get you 5%. However, Chase differentiates between Amazon and Amazon Payments, so Chase Freedom will not earn the 5x bonus.

2. Buying Amazon Gift Cards for holiday gifts. The conventional use for gift cards has always been to hand them out as presents to your friends and colleagues for special occasions, celebrations and holidays. While our apartment building staff typically gets holiday checks or cash from the tenants each December, they didn't complain when they received Amazon gift cards from us last year. Well, at least not to our face! We're never exactly sure what to give doormen, maintenance staff, and managers, but we typically give $50-150 per staff member, so that's another $1,000 of spend. Fortunately, doesn't charge any fees for shipping it's gift cards, so again, we're not spending anymore than we would have otherwise. Because this qualifies for Chase 5x, we'll use our Freedom card here.

3. Stop while we're ahead. Now, we'll have spent $2,000 across both our Discover IT and Chase Freedom cards and received back at least $100 in total rewards. But we'd be still be $500 short of maxing out each card's Q4 5x promotion. That's fine with us because honestly, my father's way too smart to be tricked by bank marketing and will not go out of his way to hit the full cap. That's how the banks get you to spend more!

Of course, if there's something we absolutely need to buy anyway, we'll look at our online shopping/department store options, but we'd be foolish to spend another $500, just to get back $25 of rewards. I'd rather just keep that $500 to begin with.

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