Discover Card Rewards Program: Using your cash back rewards for merchandise may not be such a good idea....

I'll be the first to admit that I'm in love with Discover Card's cash back rewards system. I think it is safe to say that I'm a "bad" customer - bad in that I can remember only perhaps twice in the more than 15 years that I've had the card that I actually carried a balance and paid finance charges. What's good for me is bad for them, I guess!

But a few months ago, I noticed that Discover Card was had merchandise available as rewards, in addition to the gift cards that I routinely redeem my rewards for every few months. The rewards look great, but are you wasting your cash back rewards if you redeem for merchandise instead of one of the other rewards? In a word: yes!

Take for instance, right now several 8GB Apple iPod Nanos are up for grabs for just a mere $160 of your cash back rewards. Color choices are hot pink, black and silver. Over at Amazon.com the same Nanos are going for:

Black: $133.95

Silver: $133.95




Even on full price, these only retail for $150 at the Apple Store. So you are looking at a loss of $10 if you buy from Apple and $26.05 if you bought an iPod through Amazon.com.

Next on the list... don't you need a new digital camera? I sure do! How about a Canon PowerShot A470 7.1 Megapixels... this baby is nice! Discover will let you have one for just $140 of your hard earned cash rewards. This price includes the camera and a $10 SD memory card.

But if you go over to Amazon, it is for sale in various colors for approximately $87-98 minus the $10 memory card. So using your rewards for the Canon PowerShot A470 could mean a net loss of $40 to you!

Canon A470 link

So what do you do? Well, if you really wouldn't mind any of these fine merchandise rewards, do check out the gift card option. You can redeem your cash back rewards ub increments as little as $20 and even have your name put on the card. This is free, no cost to you. What you can then do is use the Discover Card gift card to purchase an Amazon code for the same amount (I recommend doing this only with smaller cards as I had them ping a rather large prepaid gift card for $1, which meant my transaction was declined) and then applying the gift code to your account. Or use it anywhere else online where you can find this merchandise cheaper! You can also redeem your cash back reward and have it electronically put into your bank account. Far better than losing money by redeeming for merchandise, don't you think? Don't even get me started on the TomTom 130......