Learn more about this card and find out how you can apply here.
Discover it® is a cash back credit card with no annual fee and a nice rewards scheme. The card earns a base rate of 1% cash back on all purchases, but select rotating categories – for example, gas stations, restaurants, and department stores – earn 5% cash back on up to $1,500 in purchases per quarter. Discover it is part of a larger family of cash back and travel rewards credit cards, with stablemates such as Discover it Chrome, Discover it Miles, Discover it for Students, and Discover it Chrome for Students.
Discover it competes with a number of popular cash back credit cards, not including its Discover-branded peers. The closest analogues include Chase Freedom, Capital One Quicksilver, Citi Double Cash, BankAmericard Cash Rewards, Blue Cash Everyday and Blue Cash Preferred from American Express, and Barclaycard CashForward, among many others. Unlike most comparable cards, Discover it doesn’t come with a sign-up bonus – though it does automatically double cash back earned in the first year of card membership.
- Sign-up Bonus: There is no sign-up bonus for this card, but you automatically earn 2x your first year’s cash back amount (described below).
- First-Year Double Cash Back: On your first card membership anniversary, Discover it automatically doubles all cash back earned in that year, with no caps or restrictions. For instance, if you earned $200 in cash back during your first year, you receive a $200 bonus – for $400 total in first-year cash back earnings. This includes cash back you earn through the Discover Deals shopping portal. The more you spend, the more valuable this benefit is.
- Cash Back Rewards: Discover it earns 5% cash back on select quarterly rotating categories. Popular categories include gas station purchases, department store purchases, and restaurant purchases. The 5% cash back benefit applies to the first $1,500 spent across all rotating categories in a given quarter. Once you hit $1,500, future purchases in the rotating categories earn an unlimited 1% cash back. All other purchases also earn an unlimited 1% cash back. Note that you need to manually activate your 5% cash back categories each quarter. Once you activate, earnings are retroactive to the beginning of the quarter.
- Cash Back Redemption: You can redeem your accumulated cash back rewards for statement credits, bank account deposits, and electronic and physical gift cards. Statement credit and bank account deposit redemptions can be made at any time, in any amount. Gift card redemptions come with a $20 minimum.
- Freeze It: Discover’s Freeze It feature allows you to lock your account with a single click from any Internet-connected device, preventing new purchases, cash advances, and other activities. It comes in handy when you misplace your card or suspect that your account has been compromised. If you find your card, you can unfreeze your account using the same method. Keep in mind that balances continue to accrue interest and automatic payments for bills and other recurring expenses continue to execute as normal when your account is frozen.
- Introductory APR: Discover it comes with a 12-month 0% introductory APR on purchases and balance transfers. To qualify, balance transfers must be made by the 10th day of the third month after you open your account. For instance, accounts opened in January have until April 10th to take advantage of the promotion.
- Regular APR: After the introductory periods end, purchases and balance transfer APRs range from 11.24% to 23.24%, depending on your personal creditworthiness and prevailing interest rates. The cash advance APR is 25.24% from day one, and there is no penalty APR.
- Free FICO Score: Discover it includes a free FICO credit score on every monthly paper or electronic statement. You can also access your FICO score at any time through your online account dashboard.
- Important Fees: There is no annual fee or foreign transaction fee. Balance transfers cost a flat 3% of the transferred amount. Cash advances always cost the greater of $10 or 5%, and late and returned payments cost $35.
- Credit Required: This card requires very good to excellent credit. Any blemishes of note are likely to be disqualifying.
- No Annual Fee. Discover it doesn’t have an annual fee. That’s a nice advantage over competing cards such as American Express Blue Cash Preferred ($75) and Capital One QuicksilverOne ($39).
- First-Year Cash Back Boost Dramatically Increases Earning Power. Discover it’s unlimited first-year cash back bonus doubles the cash back you earn during your first year of card membership. That effectively raises the 1% baseline cash back to 2%, which is ahead of competitors such as Capital One Quicksilver and Barclaycard CashForward. Even better, the first-year bonus raises your 5% cash back rate to 10%, which is basically unheard of among fellow cash back cards.
- No Penalty APR. Discover it doesn’t charge penalty interest and waives the late fee on your first late payment. That’s a nice break for cardholders who occasionally miss payments – and an advantage over competitors such as Chase Freedom.
- No Foreign Transaction Fee. Discover it doesn’t charge a foreign transaction fee. That’s great news for cardholders who travel abroad with any frequency. Some competing cards, including American Express EveryDay and Barclaycard CashForward, come with foreign transaction fees ranging from 2% to 3%.
- Nice Intro APR Period. Discover it has a 12-month 0% introductory promotional period on purchases and balance transfers, which is great news if you need to make a big upfront purchase or transfer a high-interest balance from another credit card.
- No Minimum Redemption Threshold for Cash Redemptions. You can redeem your accumulated cash back rewards for statement credits and bank account deposits at any time and in any amount. That’s a big advantage over competing cards such as Chase Freedom ($20 minimum redemption).
- Don’t Need Excellent Credit. While Discover it isn’t marketed as a tool for building credit, nor as a credit card option for people with bad credit, it does not have exacting qualification standards for new applicants. If you have good to very good credit, there’s a strong chance you’re going to be approved for this card, albeit at a lower credit limit than someone with excellent credit. Some other cash back credit cards, including American Express Blue Cash Preferred and American Express EveryDay Preferred (which have $75 and $95 annual fees, respectively), require excellent applicant credit.
- No Sign-up Bonus. Discover it doesn’t offer a sign-up bonus. That’s a major drawback compared to competing cards such as BankAmericard Cash Rewards and Barclaycard CashForward, both of which offer $100 sign-up bonuses.
- 1% Baseline Cash Back Is Lower Than Some Competitors. Discover it’s 1% baseline cash back is lower than that offered by many competing cards. If you don’t take full advantage of the 5% cash back categories, this puts you at a serious disadvantage to competing cards with higher baseline cash back rates. For instance, Citi Double Cash has an effective 2% unlimited cash back rate on all purchases, while Capital One Quicksilver has an unlimited 1.5% cash back rate.
- Manual Cash Back Activation Required. Discover it requires you to manually activate your 5% cash back categories each quarter. You can do so online or by phone. While activation isn’t incredibly time-consuming, it’s certainly inconvenient, and raises busy cardholders’ risk of simply forgetting to take advantage of the 5% bonus. Many other cash back cards, including American Express Blue Cash Everyday, don’t require you to activate quarterly categories.
Like Chase Freedom and other cash back rewards cards with tiered, rotating spending categories, Discover it® rewards you for making certain types of purchases at certain times. That’s great news for applicants who intend to use this as a primary credit card and make a wide variety of purchases with it.
However, Discover it’s approach to cash back certainly isn’t the only way to do such things. If you prefer a card without quarterly rotating categories or spending caps, there are plenty of great alternatives on the market.
Learn more about this card and find out how you can apply here.