Discover More Credit Card Signup Bonus

Though there have been reports that credit card rewards programs are being scaled back and there don’t seem to be as many great signup bonuses these days, there is one signup bonus that is being heavily advertised that you may want to check out.

Discover is offering a $100 Cashback Bonus when you make $500 in purchases within three months of being approved if you can get yourself approved for a new Discover More card (and you don’t already have one). This card offers Discover’s usual 5% Cashback Bonus in categories that change quarterly (January-March 2009’s 5% back is on airlines, hotels, car rentals, and cruises; April-June 2009’s is on home improvement, department stores, and clothing stores) as well as up to 1% Cashback on all other purchases, no annual fee, and a 0% APR on balance transfers until April 2010.

In addition to the quarterly Cashback categories, you can earn Cashback that isn’t category-specific at any point in the year by logging into your account through DiscoverCard.com and clicking on a link to the store you want to shop at. Some of these bonuses are actually higher than 5%. You can earn 10% back at Drugstore.com, PetSmart.com, and BarnesandNoble.com, for example. You earn 5% back with most of the retailers they offer.

Here’s the way the “up to 1% Cashback” works: You earn 0.25% back on your first $1,500 of purchases, 0.5% on your second $1,500 of purchases, and only after you pass the $3,000 threshold do you start earning 1% back. There is another catch, though: any purchases that you earn 5% back on do not count toward the $3,000 threshold. Also, all purchases at warehouse stores only earn .25% back (except for March 2009, when they’re part of a special 5% back promotion-that is, if your local warehouse store accepts Discover). Warehouse purchases also do not count toward the $3,000 threshold. Because of the difficulty of reaching the 1% back threshold, your best bet may be to use this card only on purchases where you’ll earn 5% back and use a different rewards card for the rest of your purchases.

Cashback rewards are redeemable in $20 increments, which is fairly generous (the Chase Freedom card’s rewards are redeemable only after reaching $50, for example). You can redeem your Cashback for cash or gift cards. If you already shop at the stores they offer gift cards for, redeeming your Cashback for gift cards can be a great deal because you can increase your rewards this way. For example, you can redeem $20 Cashback for a $25 gift card to Bed, Bath, and Beyond or $40 Cashback for a $45 gift card to Chili’s. That means you can effectively turn the $100 Cashback bonus into $125 if you redeem it for gift cards that will turn $20 into $25, making this an even better deal. And, if you spent all $500 on purchases that earn 5% Cashback, you would earn an additional $25 in Cashback rewards, and you could again redeem $20 for a $25 gift card, making your total rewards for this card $150.

To help you determine whether you’ll be able to take full advantage of this signup bonus, here’s a list of all the stores where you can turn $20 into $25:

• AMC Theatres
• Ace Hardware
• AllPosters.com
• Amazon MP3