Maximizing Discover’s High-Yield Savings Account with Cash Back Credit Card Rewards

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The Discover it® Miles isn’t the most glamorous rewards card out there, but with a lucrative first-year bonus offer and $0 annual fee, it’s a practical option for those who want a cash back-equivalent card.

In my case, I used the card to generate thousands of dollars in cash back that helped me offset not only travel costs, but other expenses as well that I hadn’t budgeted for. Below is an overview of how I’m using the Discover it® Miles and savings account to create a rainy day fund.

» Learn more: Discover it Miles review: Travel rewards with a cash-back twist

First-year bonus

The Discover it® Miles doesn’t have a traditional welcome bonus, but cardholders do earn miles at an accelerated rate: Discover will match ALL the Miles you’ve earned at the end of your first year, automatically. For example, if you earn 35,000 Miles, you get 70,000 Miles. That’s $700 towards travel! The more you earn, the more you get.

This can lead to potentially more rewards than any welcome bonus. For comparison, the Chase Freedom® is a cash back card with the following welcome bonus: Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening.

While that welcome bonus is a nice start, I ended up earning over $3,100 with the Discover it® Miles card’s double miles offer. So for me, the double miles-earning bonus during the first year more than made up for the lack of a traditional welcome bonus.

» Learn more: Chase Freedom review: $150 bonus and 5% cash back

Retail arbitrage

During the first year, I really wanted to maximize my rewards on the Discover it® Miles. Not only did I charge all of my spending to the card, but I also used it to make purchases for the purpose of retail arbitrage. By reselling popular merchandise and gift cards, I racked up more spending on this card than normal. So it didn’t matter that I didn’t receive a welcome bonus — I don’t think any card welcome bonus I’ve ever received has topped $3,100 in cash.

You read that right: While the Discover it® Miles technically earns “miles,” those miles can be redeemed for cash via travel statement credits or direct bank transfers. That’s incredibly useful, considering cash rewards provide stability when programs like Marriott Bonvoy and Hyatt implement peak pricing.


The great thing about the Discover it® Miles is that cardholders can earn an extra $50 to $100 by successfully referring friends and family. I earned an extra $150 by referring three of my blog readers who got approved for the card.

How much this has added up to so far

In total, I earned over $3,250 in rewards from the Discover it® Miles during the first year alone. At the time, Discover offered 2% APY on their online savings accounts. My reward fund accrued about $60 in interest before I cashed out, and that helped me cover some unexpected expenses.

Beyond that, I’ve continued to use the Discover it® Miles for retail arbitrage and occasional spending. The card has a $0 annual fee and a pretty substantial credit line, so I keep it open and to serve as a bit of a travel piggy bank.

For the most part, I use the miles I earn from this card toward travel expenses like award ticketing fees, hotel incidental charges (like room service or spa treatments), or anything else for which redeeming miles doesn’t make sense.

However, the redemption flexibility makes it possible for me to also use this card as a rainy day fund to pay for unexpected expenses when they come up. That’s one of the reasons the Discover it® Miles continues to have a place in my wallet, despite the fact that it isn’t the flashiest card around.

How to maximize your rewards

You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2020, including those best for:

Planning a trip? Check out these articles for more inspiration and advice:
Save more money for your next vacation with this simple trick
How to get the highest credit card welcome bonuses
Find the best travel credit card for you

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