Discover & Apple Pay Launch
Yesterday Discover announced what might be the best deal we have seen in a long time. Beginning on September 16, 2015, Discover customers will be able to add their cards to Apple Pay. While that is nice, Discover will also throw in an extra 10% cashback on all purchases made in-store with Apple Pay through the end of the year.
Here is how they describe the promo:
From September 16, to the end of the year, cardmembers who pay with their Discover card using Apple Pay will automatically earn an extra 10% Cashback Bonus on up to $10,000 of in-store purchases. Discover it Miles, Miles and Escape cardmembers will earn an extra 10 miles per dollar on up to $10,000 of in-store purchases.
As you can see, Discover is giving an extra 10% cashback over the normal cashback earned for regular spend. For the Discover it card that amounts to 11% back while the Discover it Miles will earn 11.5X miles per dollar spent. Good stuff. But of course it gets better.
Discover has confirmed to PDXDealsGuy that cardmembers with the Double Cash promotion on their account will have this bonus doubled. So here is what it all looks like in the end:
- Discover it: 1% + 10% = 11% X 2 = 22%
- Discover it Miles: 1.5% + 10% = 11.5% X 2 = 23%
That is amazing and if for some reason you can use this promotion at a merchant that is in the 5% categories for the Discover it, you could, earn up to 30%!
Stores with Apple Pay
Apple has been very successful with their rollout of Apple Pay and thus has a lot of merchants on board. While you can find the full list of supported merchants here, I thought I would highlight a few.
Sample of merchants that accept Apple Pay:
- Office Depot
- Toys R Us
The terms of the promotion do say this 10%+ bonus is only good for in-store purchases, however Apple Pay is accepted in a number of mobile apps from stores such as Staples & Target. It remains to be seen if these purchases will trigger the bonus or not. Only time will tell.
Sample Purchases & Profits
Walgreens and RiteAid stores both accept Apple Pay and sell Vanilla Visa cards for $4.95 per $500. (Some stores are cash only.) Staples, Officemax and Office Depot all sell $200 Visa cards for $6.95. Lets take a look at the math:
- $500 Vanilla Visa Cost: $4.95
- $500 Vanilla Visa Cashback Earned: $111.09/$116.14
- $200 Visa from Staples/OM/OD Cost: $6.95
- $200 Visa from Staples/OM/OD Cashback Earned: $45.53/$47.60
This means that you could purchase 20 of the Vanilla Visas and earn a profit of $2,101 with Discover it or $2,201 with Discover it Miles. For the $200 Visas the profit is $1859.45 with Discover it and $1959.45 with Discover it Miles. Wow!
Finding an iPhone Cheaply
If you are like me and have an Android or other non-iOS device, then you might be a little sad right now. Fortunately there may be a way to get an iPhone cheaply. One option is the AT&T Access More card from Citi. This card will give you a credit of up to $650 for purchasing a new phone. You could easily purchase an iPhone 6 or 6s and use it. There are definitely some drawbacks to this card, so take a look at my detailed review before going that route.
You can also purchase an iPhone online, use it to max out the promotion and then sell it. iPhones tend to have a decent resale value and you will more than make up for any loss by earning 22%/23% back! eBay has a lot of iPhones for sale and many people are trying to dump their old iPhone 6 models before the 6S comes out. Buying discounted eBay gift cards could be a way to save even more!
Getting Another Discover Card
For some, it may be worth getting a second Discover card to fully maximize this promotion. Discover limits each person to two cards total and your first card has to have been open for at least 12 months to get a second card. Discover is still running the Double Cashback promo for new customers, so the 22%/23% cashback is definitely possible.
I most likely will pickup an iPhone on eBay and then use it for a couple of months while I max out the promotion on both my wife’s and my Discover it cards. 22% cashback is just too good to pass up and is worth the hassle of buying and then reselling a phone. For those of you who already have iPhones, this is indeed one of the best deals I have ever seen.
HT: Frequent Miler