Pros
- Rewards earned in the first year get doubled
- Up to 5% cash back
- No annual fee
- 0% intro rates for 15 months
Cons
- Potential for a very high regular APR
- Bonus reward categories rotate, require quarterly signup and limit earnings
- Balance transfer fee
Discover it® Cash Back
Transfer Fee: 3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*
- Earn 5% cash back on everyday purchases at different places you shop each quarter like grocery stores, restaurants, gas stations, and more, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases—automatically.
Rewards Details
- INTRO OFFER: Unlimited Cashback Match for all new cardmembers – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. You could turn $150 cash back into $300.
- Earn 5% cash back on everyday purchases at different places you shop each quarter like grocery stores, restaurants, gas stations, and more, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases—automatically.
- Redeem your rewards for cash at any time.
Additional Info
- Discover could help you reduce exposure of your personal information online by helping you remove it from select people-search sites that could sell your data. It’s free, activate with the mobile app.
- Get a 0% intro APR for 15 months on purchases. Then 17.24% to 28.24% Standard Variable Purchase APR applies, based on credit worthiness.
- No annual fee.
- Terms and conditions apply.
- More Details & Reviews About Discover it® Cash Back
Is Discover it® Cash Back Worth It?
Discover it® Cash Back is worth considering because cardholders can save more than $1,000 during the first two years of use, on average, and there’s no annual fee. The card offers 1 - 5% cash back on purchases and doubles the rewards cardholders earn the first year as an anniversary present, among other perks.
The downside 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.
What You Need to Do to Make Discover it® Cash Back Worthwhile
Since there’s no annual fee, all you have to do to make Discover it® Cash Back worth it is pay the bill in full every month the regular APR is in effect. That way, you won’t owe any interest that could potentially offset your savings from rewards.
The exception to this pay-in-full rule is during the introductory period. Discover it® Cash Back offers 0% for 15 months on new purchases and 0% for 15 months on balance transfers. As long as you make at least your minimum payment every month, you can carry a balance during the introductory period without owing interest. After the intro period expires, the regular APR of 17.24% - 28.24% Variable will apply to any remaining balance.
I recommend using a credit card calculator to help avoid interest charges.
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 1.17% is standard and the value of points and miles is somewhat opaque. If only this rewards rate applied to all purchases and you didn’t have to jump through hoops to get it. Limitations in these areas certainly curb my enthusiasm about the card.
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 as an anniversary present. 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. “I got this card when I knew I was going to have a big year of spending, and my bonus was huge,” WalletHub user Breanne Olson told us.
0% Financing For 15 Months
Discover it® Cash Back offers 0% introductory rates on both new purchases and balance transfers for the first 15 months after account opening. It also has a regular APR of 17.24% - 28.24% Variable. Using a credit card calculator will help you minimize the cost of financing.
$0 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.
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.
This is what Discover is talking about in their advertisements when they say they don’t make you jump through hoops. That’s true as far as redemption minimums are concerned, but I find it somewhat disingenuous given the quarterly activation requirement for bonus rewards.
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 quarter, 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% Fee on Future Balance Transfers (See Terms)*
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 $240 for the average household, based on their roughly $8,000 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 balance transfer 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 17.24% - 28.24% Variable, depending on your credit standing at the time you apply. And while there’s a possibility that you will be awarded a rate close to the market average for people with excellent credit, the low end of the card’s APR range is reserved for applicants with 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.
I recommend planning to pay your bill in full monthly, after the card’s low-rate introductory period ends.
Other Things to Consider About Discover it® Cash Back
1% Cash Back On Most Purchases
This is the market-average cash-back rate. It will apply to all purchases that do not qualify for the bonus categories. As a result, some people choose to use a different card for purchases that would earn this rate.
“I try to avoid ever earning just 1% back on purchases with my rewards cards,” said Gerrit Burnes, another WalletHub user. “Sometimes I’m lazy and don’t pull out the optimal card, but if you make a good plan you should be able to beat 1% 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 is the fact that Discover isn’t as widely accepted around the world as Visa and Mastercard. “I travel in Europe a lot, and I never see the Discover logo,” said WalletHub user Sorin Tovala. “Some places might accept it, but I wouldn’t count on it.” However, 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, it’s not worth opening a particular credit card just to get one.
I recommend comparing credit card offers to find the deal that will save you the most money as well as checking your credit score for free on WalletHub. WalletHub offers daily updates as well as personalized advice.
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 a policy. For example, I was surprised to learn that 41% of people who’ve asked their credit card company to waive a late fee have been successful, according to a recent WalletHub survey.
Freeze It®
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 Review Methodology
This Discover it® Cash Back review is based on WalletHub’s proprietary 100-point credit card rating system. By using a consistent methodology to evaluate the Discover it® Cash Back and all other cards, WalletHub’s credit card experts make it easy for people to compare their options and find the best credit cards for their needs.
The WalletHub rating system uses 16 key metrics grouped into seven categories: Fees, Rewards, Two-year Cost, Interest Rates, Approval Requirements, Special Features, and Reviews. Each metric has a maximum number of points allocated to it, based on the metric’s importance as determined by our editors. The points are added up to create an overall rating for the Discover it® Cash Back out of a maximum of 100 points, which is then converted to a 5-point scale.
Ratings for each category reflect how close Discover it Cash Back is to WalletHub’s definition of a 5-star credit card, which is based on market conditions and what we believe are reasonable terms. We compare Discover it Cash Back to that standard to give a numerical approximation of how reasonable and competitive its terms are compared to other cards.
To learn more about how WalletHub rates credit card offers, check out our full credit card review methodology.
WalletHub experts are widely quoted. Contact our media team to schedule an interview.