By Mr. BIf you use a Discover credit card, there is something you should know – a dirty little secret that Discover probably doesn’t want you to know.
Actually, it’s not so secret because they actually publish it on their website, but it IS secret because it’s not so easy to find.
Before I spill the secret, first you must understand Discover’s tiered cashback bonus system, based on how much you spend on the card each year.
Up to $1,500 spent annually on purchases: 0.25% cashback
From $1,501 to $3,000 spent annually on purchases: 0.5% cashback
Above $3,000 spent annually on purchases: 1% cashback
As you can see, only after you spend $3,000 in a given year do you finally achieve 1% cashback status, which is mediocre at best. Given the number of credit cards that offer a minimum of 1% cashback bonus on ALL purchases, the luster of the Discover system wanes further.
The Secret Unveiled
The dirty little secret, however, adds insult to injury. Here it is: purchases made at certain large stores (such as Wal-Mart) only earn 0.25% cashback, no matter how much you have spent annually. Furthermore, dollars spent at these large stores do NOT count toward the progress toward the 1% tier level. Don’t believe me? See for yourself.
Quoted from their site (bold is my emphasis):
If you have a Discover Card that earns Cashback Bonus, you will earn a fixed .25% Cashback Bonus on purchases made in-store or online at select warehouse clubs or discount stores, including grocery stores affiliated with these stores, such as BJ’s Wholesale Club, Costco, Sam’s Club Wal-Mart, Wal-Mart Neighborhood Markets and Supermercados Amigo stores. These purchases will not be included in calculating the total amount of purchases made during your anniversary year in order to determine your up to 1% tier level. However, purchases of gas at these stores will be treated the same as all your other gas purchases.
There you have it. If you frequent any of the aforementioned stores, do not whip out your Discover card, as there are many better choices. Once again, this shows that the main reason to ever use a Discover card is for the revolving categories in the Get More program.
Personally, I avoid Wal-Mart like the plague, but I have several family members who think that it is the only store on Earth! One of these same relatives also thinks that Discover is the best credit card because of its “great” cashback bonus system. After I sent her links to the dirty little secret, she immediately applied for an alternative card. 
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