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Activate new Discover cash back categories for Q3 2020 now

Earn 5% cash back on restaurant and PayPal purchases


See the latest bonus categories from Discover and get tips on how to maximize your cash back.

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Discover has launched its 5% cash back categories for Q3 2020. From July 1 to Sept. 30, 2020, cardholders can earn 5% back at restaurants and on PayPal purchases and transfers (up to $1,500 in combined purchases, then 1%), after activation.

If you often use PayPal for payments, regularly eat out or order takeout or delivery from restaurants, the new Discover categories can provide a simple way for you to earn cash back. Discover it® Cash Back cardholders can activate the third quarter bonus category here.

Here’s what you need to know at a glance:

  • You must activate the bonus each quarter to receive 5% back.
  • The third quarter bonus is active from July 1, 2020 – or the date on which you activate it, whichever is later – through Sept. 30, 2020.
  • The bonus is capped at $1,500 in combined spending per quarter.
  • All other purchases earn 1% cash back.

Discover 5% cash back calendar 2020

January – MarchApril – JuneJuly – SeptemberOctober – December
  • Grocery stores
  • Walgreens
  • CVS
  • Gas stations
  • Uber
  • Lyft
  • Wholesale Clubs
  • Home Depot
  • Restaurants
  • PayPal

Read on for everything you need to know about Discover’s cash back bonus, including our suggestions to maximize the 5% rate and how Discover’s bonus categories compare to those of Chase.

What is included/excluded in the “restaurants” category?

The restaurant category includes purchases made at locations considered full-service restaurants, fast-food restaurants, cafes or cafeterias. In order to be qualified as such, a location must have the correct merchant category code. This means that while you can get cash back not only for dining in, but also for ordering takeout or delivery directly from a restaurant. At the same time, third-party food delivery services like Postmates or Grubhub might not qualify.

What is included/excluded in the “PayPal” category?

According to the Discover website, the PayPal category includes:

  • Purchases made through the PayPal wallet online
  • Money transfers to friends and family via PayPal using an eligible Discover card
  • Transactions made using PayPal Here

Note that payments made through the Xoom transfer service are not included in this category.

Tips for maximizing your bonus

  • Use your Discover it Cash Back card for all restaurant and PayPal purchases.
  • Consider buying gift cards from your favorite restaurants to meet the full quarterly spend cap.
  • When shopping online, use an option to pay via PayPal wherever available.
  • Visit for more information on which digital wallet transactions qualify for the 5% bonus, if you prefer to shop that way.

Discover vs. Chase bonus categories

Chase also offers a 5% cash back bonus in categories that rotate quarterly. From July 1 to Sept. 30, 2020, the Chase Freedom®* is offering a bonus rate on and Whole Foods Market purchases.

Chase vs. Discover cash back categories 2020

Chase Freedom®Discover it® Cash Back
January – MarchGas stations, select streaming services and phone, cable and internet servicesGrocery stores, Walgreens and CVS
April – JuneGym memberships, select streaming services, fitness clubs and grocery storesGas stations, Uber, Lyft and wholesale clubs
July – and Whole FoodsRestaurants and PayPal
October –, and

Which card offers the best deal?

Ultimately, it depends on your spending habits. In the third quarter of 2020, Chase is offering a better rate on Amazon and Whole Food Market purchases. If like many consumers, you currently spend a lot on groceries and often shop on Amazon, Chase Freedom might be a better option for you. On the other hand, if you regularly spend money at restaurants and often use PayPal, Discover can also be a great option.

However, Chase only releases bonus categories one quarter at a time. So for the rest of the year, it is impossible to predict which card will offer the better deal. Based on 2019 bonus categories, we can only speculate that Chase will offer a bonus at department stores and on mobile wallet purchases later in the year. Luckily, Discover releases its full calendar of rotating categories in advance, so you can take a look to see if they align with your spending.

See related: Activate Chase cash back category for Q3 2020 now, Credit card special offers and limited-time promotions

*Information about the Chase Freedom card has been collected independently by The issuer did not provide the content, nor is it responsible for its accuracy.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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