The listed price at my gas station is $2.23 per gallon. Yet I filled up at an effective cost of $1.98 per gallon.
I received a 3-cent-per-gallon reduction through Shell’s Fuel Rewards program, and the remaining 22 cents per gallon savings came from my credit card’s cash-back bonus.
That’s right: You can earn the equivalent of 10% cash back on gasoline!
You can also get 10% back on items like groceries and dining out. And when that promotion ends, you’llstillbe able to secure at least 5% back on many purchases.
By the way, gas stations weren’t listed among the bonus categories for my card. So how did I end up with 10% cash back? Here’s how it works…
How to Score 10% Cash Back
There are numerous cards that offer 5% cash back. They give 5% on purchases at specific bonus categories that rotate every three months.
For instance, categories might include restaurants and cinemas in the first quarter, then switch to Amazon and gas in the next quarter.
Some cards also include 2% or 3% categories in addition to the 5% ones.Purchases outside those categories generally earn 1% cash back.
You typically must activate the category bonuses or you won’t receive them.Card issuers usually remind you by email, and you can easily log in and click to activate.
If you forget, you’ll be stuck with the standard cash-back rate — usually 1%.
The Discover It Card
Discover it is often the top choice among 5% cash-back cards.
Redeeming your rewards is straightforward: visit your account, select “Rewards,” then choose “Cash” under “Redeem.” That cash can be directly deposited into your linked bank account or applied as a statement credit (there are also shopping and gift card redemption options).
The current 0% APR offer for 15 months on purchases and balance transfers is appealing as well.
What truly sets Discover apart is their “double cash back” promotion for new cardmembers during the first year.
So you earn 5% on bonus category purchases and 1% on other purchases, and then Discover doubles the accumulated cash back after one year. That effectively turns those 5% category purchases into 10% cash back.
The 5% bonus applies up to $1,500 in purchases each quarter. Beyond that cap, you revert to the 1% rate, which becomes 2% in your first year due to the doubling.
That means you can earn up to $150 cash back every three months strictly from bonus category spending.
Of course, you might not spend enough in a given category to fully use that 5% bonus. You shouldn’t buy unnecessary items just to chase rewards. And when you do need something, it might not fall under the active category.
There’s a workaround for both issues that can increase your cash back without increasing your spending.
For example, Discover’s early 2015 bonus categories included gas and ground transportation in the first quarter. I didn’t have the card then, and I rarely spend $1,500 on gas in a three-month span anyway.
When I opened my account in the third quarter, the Discover Cash Back Calendar showed these categories:
- Home improvement stores
- Department stores
- Amazon
Yet I stillreceived 10% cash back on gas.
How can you earn 10% (or the normal 5%) when your purchase doesn’t match the current bonus category?
And how can you claim more bonus cash back when you’re not spending enough in the eligible categories? One effective tactic is to…
Buy Gift Cards to Trigger Category Bonuses
I purchased a $50 Shell gas station gift card at Home Depot using my Discover card. I used that card to pay for my next two fill-ups.
Because the purchase occurred at a home improvement store, I was awarded 5% cash back, which will be doubled after my first year with the card.
I’ll keep buying gas gift cards as needed, and if I’m not going to max out the 5% category, I’ll stock up before the quarter ends.
But this trick isn’t limited to gasoline: Home Depot carries gift cards for many retailers, from sporting goods chains to eateries. So you have multiple ways to convert ordinary spending into purchases that qualify for bonus category rewards.
It’s easy to use this approach when the 5% categories include stores that sell a wide array of gift cards. But what if the quarter features categories like restaurants and movie theaters?
Luckily, there are several methods to earn your 5% (or 10%) cash back on nearly anything you buy.
1. Plan Ahead
If the coming quarter’s categories aren’t suitable for buying gift cards, purchase them now. Just be mindful of each quarter’s limits.
For example, if you’ve already spent $1,000 of the $1,500 cap for Discover’s 5% categories, buy $500 worth of gas gift cards to use later.
2. Find a Merchant With the Right Category Code
Merchant category coding isn’t always straightforward because stores can be classified in numerous ways by card networks.
For instance, the Chase “grocery stores” category excludes Walmart and Target.
Conversely, there are reports that purchases made inside some gas station convenience stores register in the “gas” category, and many of these retailers sell gift cards.
Visa offers an online tool to search retailer category codes, but you can also make a small test purchase and review your statement to confirm whether a particular store (especially one selling gift cards) qualifies as a bonus category.
3. Hold Multiple 5% Cash-Back Cards
In early 2015, Discover’s bonus categories were gas and ground transportation — not the easiest places to find gift cards for other merchants unless a convenience store codes favorably.
At that time, the Chase Freedom bonus calendar listed grocery stores. Most grocery chains stock a wide selection of gift cards.
Put simply, the more 5% cash-back cards you carry, the better your chances of maximizing cash back across various purchases.
4. Pick Your Categories
The U.S. Bank Cash+ card allows you to choose two 5% categories from 12 options.
“Department Stores” is likely the best initial pick if you want access to gift cards for other retailers, so start there.
Then choose another category you commonly use but that has few gift-card options, such as “Fast Food” or “Cell Phone.”
5. Buy Discounted Gift Cards
To stretch savings even further, forget the special categories and buy discounted gift cards on marketplaces like Raise or CardPool with your cash-back credit card.
For example, I purchased CVS gift cards online using my Discover card. I only earned 2% cash back on that transaction, but the cards were discounted by around 20%, so the net benefit beat a 5% or 10% category bonus.
The Details You Should Know
There’s usually a cap on how much spending qualifies for the bonus category rate.
Discover’s limit is $1,500 per quarter, so you could theoretically earn $600 in bonus-category cash back each year, plus an additional $600 in your first year thanks to the double-back promotion. Regular 1% cash-back purchases usually have no cap.
My American Express business card and my Chase Ink card both offer 5% back on office supply store purchases up to $25,000 per year (and yes, those retailers sell gift cards).
Because merchant coding can be ambiguous (is a pharmacy within a supermarket coded as a “drug store”?), it’s wise to make a small test purchase and check your statement before making a large gift-card buy expecting 5% back.
Keep in mind: It’s themerchant where you swipe the cardthat must fit the category,not the item you purchase.
As Chase notes for their Kohl’s category bonus, “Kohl’s gift cards purchased at any location other than Kohl’s or Kohls.com are not eligible for 5% cash back.”
So, for another example, a movie theater gift card bought at Home Depot won’t earn movie-category rewards — it’s treated as a home improvement store purchase.
Finally, be sure to activate your quarterly bonus categories.Otherwise the 5% bonus will typically default to 1% on many cards.
Your Turn: Do you take full advantage of your 5% cash-back cards?
Disclosure: We have an unhealthy Taco Bell habit here. Affiliate links in this article help pay for our late-night cravings. Thanks for the support!
Mark Ramsey is the author of “101 Odd Ways to Earn Money” and founder of EveryWayToMakeMoney.com. He’s worked as a repo agent, walking-stick artisan, search evaluator, house renovator, tram operator, process server, mock juror and roulette dealer — but out of the many ways he’s earned cash, writing remains his favorite (so far).
