Discover it® Cash Back Review

The Discover it® Cash Back is a no annual fee rewards card with a fantastic cash-back rate of 5% for a revolving list of categories. Enroll every quarter to earn 5% cash back on up to $1,500 in purchases made in various categories throughout the year. Discover is a large company with a total network volume of $376 billion. It’s also fully online, so there aren’t any physical branch locations customers can visit. However, Discover provides an entirely U.S.-based customer service team via phone or online to cardholders, which is unusual for some credit card companies.

The Essentials of the Discover it® Cash Back

  • APR: 0% for 14 months, then 13.49% – 24.49% variable
  • Annual Fee: $0
  • Primary Feature: Enroll every quarter to earn 5% cash back on up to $1,500 in purchases made in various categories throughout the year.
  • Introductory Bonus Offer: Unlimited cash-back match at the end of your first year

What’s interesting about the Discover it® Cash Back

Earning 5% cash back for some purchases is a high rate that could be hard to find elsewhere. However, it’s only for specific purchases each quarter. The cash back never expires and can be redeemed at any time. One of the most useful features of the card is the ability to redeem rewards directly at the Amazon.com checkout.

The card’s APR is on par with other similar cards, but Discover it® Cash Back has a few intriguing features. First, it doesn’t penalize you for late payments as much as other cards do. For example, your APR doesn’t increase after a late payment, and there is no fee on your first late payment. However, any subsequent late payments will carry up to a $39 fee.

Additionally, there is no over-limit fee and no foreign transaction fees when you use the card abroad. Discover it® Cash Back also provides card members unique security features, such as free monitoring of your Social Security number. This addition is rare among its competition. Plus, if you lose your card, Discover it® Cash Back offers a free replacement card with no-cost overnight shipping.

Things to Consider

There are a few essential things about the Discover it® Cash Back to keep in mind when choosing among cards. For one, Discover it® Cash Back offers only 1% cash back on all purchases outside of the 5% categories, which is lower than some other cards. Also, keeping up with the reward categories is complicated, since they rotate every 3 months. Furthermore, you must sign up for the rewards to activate them.

A Discover card is also more of a challenge to use overseas because fewer places accept Discover than Visa or Mastercard. However, over 44 million locations accept Discover. Additionally, the card has a $1,500 cap for the amount you can spend that qualifies for rewards each quarter. This cap means that your maximum rewards for the 5% cash back category is $75 every 3 months. To some, this amount is worth the time and attention you must give to ensure that you’re spending in the correct categories. For others, however, it might not be worth the hassle.

How to Get the Most from this Card

To utilize the card’s rewards in full, you must pay attention to the revolving rewards categories that receive 5% cash back each quarter. And don’t forget to activate them. If you spend the maximum amount per quarter, you’ll receive $300 cash back over 12 months for those categories, as well as an additional 1% back on all other purchases. At the end of your first year, Discover will automatically match your rewards, so you could get over $600 back by spending strategically.

Other Card Options that Might Interest You

For anyone looking around for similar alternatives to the Discover it® Cash Back, two other cards have exciting features not offered by Discover. One is the Chase Freedom Credit Card, which gives you a $200 bonus after spending $500 in the first 3 months. You can also earn the similar 5% back on revolving categories, and 1% back on all other purchases. Similar to Discover it® Cash Back, The Chase Freedom Credit Card offers 0% APR for an introductory period of (slightly longer) 15 months. After that, there is a 16.49% to 25.24% variable APR. The card also requires you to sign up for its rotating quarterly categories that give 5% cash back but allows for retroactive qualification.

Alternatively, you might be looking for a more straightforward card than the Discover it® Cash Back. One option in this category worth researching is the Capital One® Quicksilver® Cash Rewards Credit Card. This card provides a flat rate of 1.5% cash back on all purchases. There’s no need to activate anything or keep track of rewards each month, so it’s a more straightforward approach to earning cash back.

Like Discover it® Cash Back, the Capital One® Quicksilver® Cash Rewards Credit Card doesn’t charge an annual fee. As a bonus, however, you receive a $150 introductory credit if you spend $500 on the card in the first 3 months from account opening. The APR on this card is 0% for the first 15 months, which is slightly longer than Discover it® Cash Back’s introductory offer. After that, the APR rises to 15.49% – 25.49% variable.

The Final Word

Who might get the most out of the Discover it® Cash Back? Anyone in the market for a hands-on rewards program who is willing to put in the extra effort to get the big rewards that users could obtain from this card. Because the card carries no annual fee, it’s an easy sell for anyone looking to rack up flexible rewards.

Who might want to go with another provider? A person who has no interest in tracking categories of spending might want a more straightforward card. Additionally, anyone who’s an avid overseas traveler and needs to use his or her credit card while traveling might not want to go with a Discover card.

Tiffany Verbeck

Personal Finance Contributor

Tiffany Verbeck is a personal finance expert. She uses her storytelling skills gained from a master’s degree in writing to run a freelancing business focused on helping people make and manage their money.