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Here's Discover's 5% cash-back calendar

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Eligible Discover credit card holders can now activate bonus 5% cash-back categories for the last quarter of the year. Cardholders earn 5% cash back on up to $1,500 in spending across purchases made at Amazon.com, Target and Walmart.com (then 1%).

Plus Discover released the 2020 cash-back calendar, so you can start to plan spending for the new year.

Below, CNBC Select reviews the Discover cash-back calendar for 2019 and 2020, and how you can use a 5% cash-back card to your advantage.

Discover cash-back calendar 2019

Here are the bonus categories for 2019:

  • January to March (activation closed): grocery stores, excluding Target and Walmart
  • April to June (activation closed): gas stations, Uber and Lyft
  • July to September (activation closed): restaurants and PayPal
  • October to December (activate now): Amazon.com, Target and Walmart.com

Discover cardholders that can benefit from up to 5% cash back include: Discover it® Cash Back, Discover it® Student Cash Back, NHL® Discover it® and Discover it® Balance Transfer.

Discover cash-back calendar 2020

Discover revealed its full 5% cash-back calendar for 2020, so you can take a look at the bonus categories effective next year.

Here are the bonus categories for 2020:

  • January to March (activate now): grocery stores (excluding Target and Walmart), Walgreens and CVS
  • April to June (activate starting Feb. 1, 2020): gas stations, Uber, Lyft and wholesale clubs
  • July to September (activate starting May 1, 2020): restaurants and PayPal
  • October to December (activate starting Aug. 1, 2020): Amazon.com, Target.com and Walmart.com

Discover cash-back calendar vs. Chase cash-back calendar

Discover and Chase are the two most popular card issuers offering 5% cash-back cards. Here's a side-by-side comparison of the two cash-back calendars for 2019.

Quarter Chase Discover
January to MarchGas stations, tolls and drug storesGrocery stores (excluding Target and Walmart)
April to JuneGrocery stores (excluding Target and Walmart) and home improvement storesGas stations, Uber and Lyft
July to SeptemberGas stations and select streaming servicesRestaurants and PayPal
October to DecemberDepartment stores, PayPal and Chase PayAmazon.com, Target and Walmart.com

This comparison shows that during 2019, both Discover and Chase included common spending categories, such as grocery stores and gas stations, in their calendars. Plus Discover included restaurants for one quarter, while this was missing from Chase's calendar.

For the last quarter of the year, both issuers chose categories geared toward holiday shopping. Discover went with Amazon.com, Target and Walmart.com, while Chase opted for department stores and select digital wallets.

How 5% cash-back credit cards work

To earn 5% cash back, you're required to activate bonus categories each quarter. After you activate bonus categories, you can start earning 5% cash back on eligible spending. Discover lets you set up email alerts and you can add reminders to your calendar, so you don't forget to activate.

Earning 5% cash back isn't unlimited. Each quarter, after you spend a combined $1,500 in the bonus categories, the cash-back rate drops to 1%. This maximum spending requirement resets every quarter.

All other purchases made outside the bonus categories automatically earn 1% cash back. If you want to optimize the amount of cash back you can earn, we recommend using an alternative cash-back or rewards credit card for spending outside the bonus categories, so you earn at least 2% or 2 points per dollar spent.

The Citi® Double Cash Card ranks as No.1 cash-back card with no annual fee and earns cardholders an effective 2% cash back: 1% when you buy and 1% when you pay for purchases.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the CNBC Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.