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The Discover it® Card has one of the highest cash back earning potentials among cash back cards, but only if you know how to use it.
Cash back rewards credit cards can be a good way to save money on your everyday purchases. It’s like getting an automatic coupon for everything you buy. But there are often a lot of fine details in the nitty-gritty of these programs that could keep you from maximizing your rewards.
That’s why we really like the Discover it® Card. It’s a simple cash back card with one single hitch: You earn 5% cash back up to the quarterly maximum of $1,500 in certain bonus categories (then 1%). But to get that high rate, you must sign up for each quarterly program.
If you can swing that, you’ll find that the Discover it® Card is one of the top-earning cash back rewards cards on the market.
|What we like||Heads up|
- The rundown: Everything we like about Discover it® Card
- Heads up: What you should consider before applying for Discover it® Card
- Do the math: How to get the most out of the Discover it® Card
- The competition: How Discover it® Card stacks up against similar cards
- Bottom line: Is the Discover it® Card right for you?
There is a lot to like about the Discover it® Card if you’re in the market for a cash back rewards card.
No annual fee
You won’t pay any annual fee with this card. Also, if you pay off your balance in full and on time each month, you can avoid paying any interest charges.
Earn at least 1% cash back on all purchases
Anything you buy can net you 1% cash back. You’ll have the opportunity to earn more in some categories, but rest assured that every purchase will count.
Earn up to 5% cash back in bonus categories
Each quarter, Discover will switch up the bonus categories that allow you to earn 5% cash back.
Note that you’ll need to sign up for each quarterly program either by logging in to your account, calling Discover or using the company’s app.
And, you’ll only be able to earn the 5% cash back on the first $1,500 of purchases you make in the bonus categories each quarter. After that, it goes back to the 1% cash back rate.
Cash back match
Wouldn’t it be nice if you could double your cash back rewards? That’s what Discover will do at the end of your first year with the card. The company will tally up all your cash back rewards and double it.
Free FICO® score
With the Discover it® Card, you’ll be able to see your FICO® score. Normally, FICO® will charge you $19.95 to see your FICO® score, but Discover will give it to you every month for free.
Remember, you can keep tabs on your VantageScore® credit scores from TransUnion and Equifax and get detailed insights into how to improve your credit profile with Credit Karma.
Easy ways to redeem cash back rewards
When it comes to cash back rewards, the fine print in many credit card agreements can get you tied up in red tape. The Discover it® Card is an outlier, though.
You can easily redeem your cash back rewards in any amount and at any time for a statement credit, a deposit into your bank account or a charitable donation. You can also use your rewards to pay certain merchants such as Amazon. You can even redeem your rewards for gift cards starting at $20. And your rewards never expire.
Discover it® Card is a great choice for a cash back rewards card, but there are a few things to know before you apply.
This card is best for people who can stay organized. You’ll need to be able to keep track of rotating bonus rewards categories every few months, otherwise you’ll miss out on benefiting from the full potential of this card.
If you don’t activate the bonus categories, you’ll only earn 1% cash back, versus 5% cash back. That’s not bad, but if tracking rotating bonus rewards categories isn’t really your cup of tea, you may be able to earn more by choosing a flat-rate rewards card.
We also recommend this card only for very disciplined credit users. It’s easy to spend too much money with cash back rewards cards, especially since you know every purchase will be racking up rewards.
But true credit gurus already know that earning $1 in cash back rewards isn’t worth it if you spent an extra $100 to get it. It only makes sense if you use the card for your normal everyday spending, and always pay off the card in full and on time each month.
You can earn hundreds — or even thousands — of dollars in cash back rewards with your Discover it® Card if you play your cards right. It’ll take a bit of organization and planning, but getting the most out of your Discover it® Card isn’t difficult.
First, always remember to activate your bonus categories each quarter. Then, you’ll need to remember the bonus categories while you’re shopping to make sure you use your Discover it® Card for those purchases. It can help to write down the current bonus categories on a sticky note and put it right on your card so you always know what it is.
You can sometimes turbocharge your cash back rewards if you redeem them in the form of a gift card. When you do this, Discover will chip in an extra $5 toward the gift card amount.
David Alpern of the marketing firm Internet OMG uses this nifty trick himself to maximize the hundreds of dollars he earns every year in cash back: “I purchase gift cards at the discount price offered. For example, I often will buy a $50 CVS gift card using just $45 in Discover cash back proceeds.”
Finally — and this is a big one — always pay your credit card off in full and on time each month. Cash back rewards are no use to you if you need to pay interest charges because you couldn’t pay off your bill.
|Citi® Double Cash Card||Earn 2% cash back: 1% when you make a purchase and another 1% when you pay for those purchases|
|Discover it® Miles||Earn unlimited 1.5x miles for every dollar spent on all purchases|
|Chase Freedom®||Earn 5% cash back on up to $1,500 in combined purchases in rotating bonus categories each quarter you activate (then 1%)|
Citi® Double Cash Card
If managing rotating categories each quarter isn’t your jam, you can earn more with the Citi® Double Cash Card. It carries a $0 annual fee. You can earn 2% cash back.
Discover It® Miles
This card offers many of the same benefits as the regular Discover it® Card, but it’s geared toward travel-minded folks instead. You’ll earn a flat 1.5 miles for every dollar spent (no fussing with rotating quarterly categories), and you can redeem your rewards for travel.
Want a no-annual-fee, rotating categories card like the Discover it® Card but not sure you’ll earn a lot with your cash back match at the end of the first year?
Chase Freedom® gives you 5% cash back on up to $1,500 in combined purchases in rotating bonus categories each quarter you activate (then 1%).
But this card also offers a $150 sign-up bonus (as long as you spend at least $500 on purchases within the first 3 months from account opening).
You really can’t go wrong with the Discover it® Card since it has no annual fee. However, to maximize your cashback rewards, you’ll need to be diligent about tracking the rotating rewards categories. If that doesn’t sound like you, then you may earn more rewards with a flat-rate rewards card.