Update #2 (8/22/18): Discover sent out an email (subject: Your checking account just got better) with more details on the changes:
- Freeze debit card: Temporarily freeze your debit card if misplaced
- Auto Redemption to Savings: Enroll and automatically deposit your Debit Card Cashback Bonus into your Discover savings account
Update: Discover is informing account holders that Discover Cashback Checking is getting a new name and will be called ‘Cashback debit’ they also say some great new features will be added but don’t provide any details or a timeline unfortunately. Hat tip to reader Sina.
Original Post:
Discover made an update to their Discover checking account on December 13th, 2017. This account now earns 1% cash back on all debit card purchases with a monthly cap of $3,000 in spend ($30 cash back). There are some restrictions to what will earn the 1%, the following exclusions apply:
- ATM Transactions, cash over portions of point-of-sale transactions, and Peer-to-Peer (P2P) payments are not eligible for cashback rewards. Purchases made using third-party payment accounts (services such as Venmo® and PayPal™) may not be eligible for cashback rewards.
Previously this account earned $0.10 for each debit card purchase, bill payment & check cleared (up to $10 per month). It’s possible to get 2-3% cash back on all purchases by using a credit card but this is still significant for a couple of reasons:
- Not everybody has access to a credit card
- Some purchases charge different fees based on whether you’re using a credit or debit card. For example when paying your taxes using a debit card is a flat fee of $~2.5 and using a credit card has a fee of ~2%.
Rewards earning debit cards used to be relatively common until the Durbin amendment came into affect, this limited the fees retailers could be charge for debit card processing. The old program is better for all purchases under $10 and the new program is better for all purchases over $10. Discover has offered a sign up bonus on their checking accounts before, but this hasn’t been offered for some time. They currently offer a bonus of up to $200 on their savings account.
No longer taking new applications
if I use my discover cash back credit card to replace my Air conditioner will I get the 1% back
Someone’s got to ask the important questions around here…
Anyone know if I use debit card coming from discover checking account to pay the tax on pay1040.com, will I get 1% icash back? If so, when will the the cash back be posted? Appreciated if you can share your recent experience.
Pay1040.com treats my Discover debit as a discover credit card with high fee. Are you able to use it as a debit? Appreciated if you can share your recent experience.
https://www.payusatax.com/ charges a flat fee of $2.55 with Discover Bank Debit card payment. Not sure whether Discover Bank gives 1% cashback for it.
How do you know if your debit payment is tracked? I did a trial $5 payment to see if I get the cashback but I don’t know where to see if any cashback is pending
Can we use this card and get 1% back to fund those few new bank accts where only options are debit or bank account\?? anyone has tried ?
So has anyone tried purchasing money orders with the debit card for 1% back?
The transaction goes through as credit and gets rejected. It was at a moneygram terminal at a grocery store.
Same here. I tried last week. It didn’t even give me the option to put in my pin for debit.
Does anyone have any good use for this new card?
No. IME it is now hardcoded against WM MOs.
Is paying taxes eligible for 1%?
Should be, yes. It’s not one of the exclusions.
I can confirm this as of last quarterly tax due date (6/15)
Which site did you use to pay the tax to get 1% back? I thought only pay via point of sale qualifies for the 1% back.
I’m curious as well as to which site you used – I’ve tried paying my federal estimated tax payments, and it’s not going through. After calling them for the 4th time, they actually recommended that I pay using a different method.
I miss paying all my credit cards with their billpay 🙁
Oh well, their savings accounts still have pretty good rates – and they are quick to increase them when rates rise and such.
At this point, I use this account for a rent check every now and then, but really wish Discover was able to get Apple Pay (and for those using Google Pay or Samsung Pay) working. It feels like every single-branch mom & pop rural bank and credit union is supporting their debit cards and it would be nice for funding Apple Pay Cash.
As for the other gripe, there’s a handful of places that don’t seem to “get” that Discover debit cards exist (such as funding things), but that’s obviously not Discover’s fault.
Still, fingers-crossed that with the name change, there’s going to be some little tweaks and improvements to make it better!