New Discover credit card cuts the fees

Discover card logo

Discover has just unveiled a new credit card that seeks to bundle the best features of other popular rewards cards under one piece of plastic.

The creditor has branded the new card "it."

"It" is notable for all the fees you won’t pay:

You also can choose your payment due date, and the payment deadline is clearly defined as midnight Eastern time on the due date. If you need to talk to someone about your account, you’ll get 24/7 U.S.-based customer service.

If you want to take the risk of incurring back interest if you miss a payment, you can take advantage of the card’s 0% introductory APR on new purchases for 14 months. Balance transfers completed by April 10 qualify for the same deal (but there’s still a 3% fee for balance transfers).

Rewards include 5% back in rotating quarterly categories, as long as you remember to sign up. Reward cash back is usually capped at $1,500 in purchases, or $75 back per quarter.

Cash-Back Card APRs

Card name Interest rate
BankAmericard Cash Rewards 12.99-22.99%
Barclaycard Rewards Mastercard 14.99-24.99%
Blue Cash from American Express 12.99-21.99%
Capital One Cash Rewards 12.90-20.90%
Chase Freedom 12.99-22.99%
Citi ThankYou 12.99-22.99%

This quarter, the rotating categories are restaurants and movie theaters. The other three bonus categories for 2013 are only vaguely defined as "spring style," "summer fun" and "holiday shopping."

You’ll need to accumulate $20 before you can redeem for gift cards and $50 before you can redeem for cash (which must be done in $50 increments).

While Discover "it" directly compares itself to other cards in categories where it can claim to be better to or equal than those cards, in some ways its competitors are superior.

The Bank Americard Cash Rewards card has better-defined and more practical rewards that don’t change — 2% on groceries and 3% on gas for the first $1,500 in combined gas and grocery purchases each quarter, plus 1% back on all other purchases.

Chase Freedom has already laid out its 5% cash-back categories for each quarter in 2013: gas stations, drug stores and Starbucks in the first quarter; restaurants and movie theaters in the second; gas stations, theme parks and Kohl’s in the third; and and select department stores in the fourth. This card, too, offers 1% back on all other purchases.

The "it" card also offers unlimited 1% cash back on all other purchases, an improvement over older Discover cards that only offer 0.25% back until you meet a minimum spending threshold that resets every year.

If you do carry a balance, you’ll pay a variable APR that currently ranges from 10.99% to 19.99%, depending on your credit score.

You’ll want to avoid cash advances with this card; they’re never a good idea anyway, and the rate here is 24.99% plus a $10 or 5% transaction fee, whichever is higher.

The "it" card also comes in a student version, which has similar benefits and terms. The key differences are that the 0% intro APR for purchases only lasts for nine months, there is no 0% APR balance transfer offer (it’s 10.99%), and the regular APR for both purchases and balance transfers is 12.99% to 18.99%, depending on your credit score.

Discover says its card is accepted at more than 8 million merchants and at 94% of the top 1,000 online retailers, but some retailers still don’t accept Discover, so you may not be able to carry "it" as your only credit card.

Compare this card with all the cash-back credit cards in our database.

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