Discover Card doubles rebate for holiday online shopping

Instead of the usual 1 percent cash back, many Discover Card holders can earn 2 percent starting Nov. 15 – just the thing for Black Friday shoppers.

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    A Discover Card decal competes for attention with other credit card decals in the window of a Los Angeles wig shop in this 2007 file photo. The credit card company is offering an extra 1 percent cash back on online holiday purchases to card members who sign up.
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[Editor's note: This story was updated Nov. 1 at 4:15 p.m. E.D.T.]

Discover Card is offering some of its customers a holiday bonus.

Instead of earning 1 percent cash back on purchases, holders of Discover More, Open Road, and Motiva cards can earn 2 percent on the shopping they do online.

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The promotion applies to purchases from 11/15/10 (or whenever customers sign up) through 12/31/10, perfect for shoppers taking advantage of Black Friday sales. Customers do have to sign up online for the promotion, as they typically do for the company's limited 5 percent cash-back offers.

The offer is also limited to $1,000 in purchases.

That amounts to a maximum $10 in extra rebates beyond what customers would normally earn. That's not huge. Still, if you're using your Discover Card anyway, it's nice to pocket a little extra cash.

"We are seeing more and more and more cash-back incentives for cardholders," says Bill Hardekopf, CEO of LowCards.com., based in Birmingham, Ala., and author of "The Credit Card Guidebook." "Issuers are trying to get you to spend more money with their card."

Deals are even better for new credit-card customers with excellent credit, he adds, with the Discover More offering new customers $100 if they charge $500 on the card in the first three months and Chase Freedom offering $100 on the first $800 spent in the first three months.

"You're seeing a lot of very good rewards cards rolling out right now," says Tim Chen, CEO of NerdWallet, a credit-card search website. "One of the easiest way to boost revenues is [for credit-card companies] to get you to swing from using it as a secondary card to a primary card, especially in the holiday season."

With a 2 percent rebate, Discover isn't making any money off of transactions, he adds. But if those customers carry a balance month to month, then the company can make money on interest charges.

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