Discover it® Cash Back Review Summary
Discover it® Cash Back is a decent everyday credit card for people with good or excellent credit who want to earn bonus rewards without paying an annual fee. The Discover it Cash Back card gives up to 5% cash back on purchases and doubles the rewards cardholders earn the first year, among other perks.
The downside, however, is that you have to sign up for new bonus rewards categories each quarter in order to earn the card’s 5% rate. There’s a quarterly limit for that earning rate, too. Purchases that do not qualify for the 5% rate earn just 1% cash back.
When it comes to financing, you’ll get intro rates of 0% for 14 months on both new purchases and balance transfers. Discover it Cash Back does have a balance transfer fee and a regular APR of 11.99% - 22.99% Variable, though.
Discover it® Cash Back Highlights
Up To 5% Cash Back In Bonus Categories
Five percent cash back is an impressive earning rate in a market where 1.08% is standard and the value of points and miles is somewhat opaque.
1% Cash Back On Everything Else
This is the market-average cash-back rate, providing a solid floor for your rewards earning. It will apply to all purchases that do not qualify for the bonus categories.
Cash Back Earned The First Year Gets Doubled
In lieu of an initial rewards bonus, Discover it® Cash Back offers to double the cash back that you earn during the first year. Maxing out your quarterly bonus-category spending would therefore allow you to earn $600 cash back for the year, rather than $300, and your 1% base earning rate would effectively become 2% for 12 months. Exactly how valuable this sign-up incentive ultimately proves to be depends, of course, on your spending habits.
But, to the average person, it figures to be worth roughly $525 overall, including the extra $300 from the bonus categories.
No Redemption Minimum Or Rewards Expiration
Most rewards credit cards require you to have a certain amount of points, miles or cash back in order to redeem. This makes it difficult to benefit from your earnings on a regular basis and, in many cases, increases your odds of falling victim to rewards devaluation or seeing your bounty expire.
There are no such issues with Discover it® Cash Back, as you can redeem the cash back that you earn at any time, regardless of amount, and earnings do not expire. If nothing else, this should help reduce stress.
No Annual Fee
Whether you’re interested in rewards or financing, not having to pay an annual fee is always nice. This lack of fixed costs will allow you to keep your account open longer than you might have otherwise, which will benefit your credit score, assuming responsible use.
It therefore should be factored in to any comparison made between the Discover it® Cash Back card and one of its competitors that charges an annual fee, whether that charge is initially assessed either the first or second year your account is open.
0% Financing For 14 Months
Discover it® Cash Back offers 0% introductory rates on both new purchases and balance transfers for the first 14 months after account opening. It also has a regular APR of 11.99% - 22.99% Variable. Using a credit card calculator will help you minimize the cost of financing.
Discover it® Cash Back Lowlights
Bonus Categories Rotate & Require Quarterly Signup
Discover it® Cash Back is not a card that allows you to maximize rewards with a hands-off approach. Every three months, you will have to sign up for each newly available bonus category in order to earn 5% cash back on qualifying transactions. Not only is this a hassle, but there’s also no guarantee that a given quarter’s bonus categories will fit your spending habits. And you certainly don’t want to drastically alter your purchasing plans just because a bit of extra cash back is available.
Bonus Category Earnings Capped At $75 Per Quarter
The fact that you’ll earn 5% cash back on only the first $1,500 spent across each quarter’s bonus categories means that you can earn a maximum of $75 per quarter, or $300 per year, in rewards on such expenses. That’s not too bad, but it’s not what most people expect when they see 5% cash back advertised, either.
3% Intro Balance Transfer Fee (Up To 5% After That)
Depending on how much credit card debt you have to transfer, this fee could loom quite large or simply represent a minor annoyance. It would amount to $252 for the average household, based on their roughly $8,400 balance. That’s a significant amount, which could threaten your ability to get out of debt before regular rates kick in and immediately start to eat away at savings. But if you have only a few hundred dollars in lingering debt, pay your bill in full every month and are mostly interested in Discover it® Cash Back for rewards, the 3% intro (5% after) fee wouldn’t cost you much in the grand scheme of things.
Likelihood Of A High APR
The Discover it® Cash Back card advertises a regular APR that can be anywhere from 11.99% - 22.99% Variable, depending on your credit standing at the time of application. And while there’s a possibility that you will be awarded a rate close to the market average for cardholders with excellent credit, the low end of its APR range is reserved for applicants with the most spotless credit histories. As a result, many applicants will wind up with a regular rate more in line with the averages offered to people with fair credit.
Other Things to Consider About Discover it® Cash Back
Extra Value On Gift Card Redemption
Rewards credit cards typically offer a number of different redemption methods, which usually provide varying levels of value. For example, one card’s points might be worth 1.5 cents each when redeemed for travel yet only 1 cent each as a statement credit.The fact that Discover it® Cash Back distributes rewards in the form of cash ensures you get at least face value upon redemption (e.g., $100 in cash back earnings can be redeemed for a $100 statement credit). However, you might also get even more bang for your buck by redeeming for gift cards. This strategy will pay you a 25% premium on average, and it’s possible to score a gift card worth up to twice as much as your cash back earnings.
No Foreign Transaction Fee, But Limited International Acceptance
Discover is one of the few issuers that has completely abolished foreign fees from their credit cards. As a result, this isn’t a perk specific to this credit card, but it will make your wallet happy if you regularly travel abroad or make purchases through an internationally based merchant.One thing potentially standing in the way of that happiness, however, is the fact that Discover isn’t as widely accepted around the world as VISA and Mastercard – operating in roughly 50 countries, compared with the 200+ of its bigger competitors. But you don’t necessarily need to see the Discover logo to be able to complete a purchase because Discover cards are also accepted by merchants that belong to the Diners Club, JCB, and China Union Pay networks. That brings Japan, mainland China and Diners Club’s 185 countries and territories into the fold.
Free Credit Score On Monthly Statements
All of Discover’s credit cards now offer a free FICO credit score on monthly account statements, enabling customers to easily stay abreast of their credit standing. This is certainly helpful, as most consumers know far too little about their credit scores. But given how common free credit scores have become – check out WalletHub’s free credit score service to learn more – it’s not worth opening a particular credit card just to get one.
Human, U.S.-Based Customer Service
One of Discover’s main selling points is that live, U.S.-based customer service representatives are available 24 hours a day, seven days a week to answer cardholder questions. This is an important point of differentiation for many consumers given the prevalence of automated customer service lines throughout the rest of the industry. Discover has also earned a number of rewards for customer satisfaction and loyalty, so they must be doing something right.
Free Overnight Replacement Cards
If you ever lose or damage your card, you can request that an overnight replacement be sent to any U.S. address – while you’re on vacation, for example – and you won’t have to pay a thing. American Express and Bank of America offer this same service, but it’s certainly not common. In most cases, even expedited replacement deliveries take a couple of business days and can cost up to $25.
Flexibility For Late Payers
Discover it® Cash Back does not have a penalty APR, which means you won’t see rates skyrocket due to a couple of late payments. Furthermore, Discover waives your first late fee if you are ever tardy with a payment. Most issuers will do the same if you ask, but they don’t make it policy.
This feature represents a bit of a redundancy given that all credit cards guarantee users $0 liability for unauthorized charges, but the ability to temporarily restrict account-spending privileges at the click of a button through the Discover mobile app can at least provide a measure of reassurance. It prevents new purchases, cash advances and balance transactions from being authorized but doesn’t interrupt pre-established recurring monthly payments.
Discover it Cash Back vs. The Competition
Discover it® Cash Back
Citi® Double Cash Card – 18 month BT offer
Capital One Quicksilver Cash Rewards Credit Card
Chase Freedom Flex℠
|Rewards Rate||1 - 5% Cash Back||2% Cash Back||1.5% Cash Back||1 - 5% Cash Back|
|Purchase Intro APR||0% for 14 months||N/A||0% for 15 months||0% for 15 months|
|Transfer Intro APR||0% for 14 months|
Transfer Fee: 3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*
|0% for 18 months|
Transfer Fee: 3% (min $5)
|Regular APR||11.99% - 22.99% Variable||13.99% - 23.99% (V)||15.49% - 25.49% (V)||14.99% - 23.74% (V)|
|Editors' Rating||3.9 / 5||5.0 / 5||4.4 / 5||5.0 / 5|
|Details, Rates & Fees||Learn More|
Rates & Fees
|Learn More||Learn More||Learn More|