Discover More Credit Card Review – Get Up to 5% Cash Back on Purchases

Important Note: This card has been discontinued and replaced by the newer Discover it Card.

The Discover More card is a cash back rewards credit card, so you’ll get cash back on purchases made using it. It boasts an impressive opportunity to earn a 5% cash back bonus on purchases in certain spending categories (which rotate on a frequent basis, so you need to catch them right to be able to take advantage of this offer), along with up to 1% automatic cash back on purchases in general. There are other positives that make it a useful rewards credit card but you should be aware of the main pros and cons before you apply.

Key Features

Up to 1% cash back automatically. Cash back is tiered and you’ll only receive 1% if you spend $3000 on the card annually. If your purchases for the year don’t amount to this, you’re looking at getting 0.25%-0.50% depending on how much you spend.

5% cash back bonus up to the dollar amount of each 5% program. To be eligible for the 5% cash back bonus, you need to have made purchases using your Discover More card in certain categories (such as travel or gas and groceries ). The categories change at various points in the year so you’ll need to keep an eye on what the current category is to know if you’ll be eligible for the bonus cash back rate. From April through to June, the category is Home and Fashion (including department stores, home improvement stores and clothing stores) but this will change to Restaurants in June. From July to September, there are multiple categories in the form of Gas, Hotels, Movies and Theme Parks. Finally, October to December will see the categories change to Restaurants and Fashion. Each time a category changes, you’ll need to sign up for it, because eligibility isn’t strictly automatic. If you go beyond the specified amount for any particular 5% program, you’ll only receive 1% cash back for any category purchases that exceed the specified amounts.

ShopDiscover online shopping mall. If you’re going to be shopping online using your Discover More card, it can be worth checking out the ShopDiscover shopping mall. By clicking through to online retailers using the Discover Shop and using your card to make purchases, you can get anything from 5% to 20% cash back (assuming that you’ve already signed up for the Account Center). This offer is exclusive to Discover cardholders and you’ll receive the standard 1% cash back on top of this unless the retailer’s terms and conditions state otherwise.

More cash back if you redeem as gift cards. You can get better cash back if you choose to redeem your rewards in the form of gift cards or eCertificates from Discover’s partner stores. This isn’t limited to just a handful of partners so you should be able to find ones that suit you if you go this route.

Advantages

0%  APR for balance transfers. This lasts for 15 months but balance transfers can’t be made from other Discover cards. As a result, it’s not free and you’ll incur a fee of around 4-5% (depending on which credit category you fall into) for having the balance transferred.

0% purchase APR for the first 15 months. Assuming that you have a good credit history behind you, this level lasts for 15 months after you open the car. After this, the purchase APR jumps to a variable rate that is much higher so this advantage is only of the short-term variety. The actual APR that you’ll then be charged depends on your credit history. For example, those whose credit is considered ‘excellent’ will receive anything from 10.99% to 20.99%.

If you’ve made three or more late payments in the last two years and therefore fall into the ‘needs improvement’ category, the 0% purchase APR never actually applies to you. Instead, you’ll be charged a rate of 3.99% for the first six months. This jumps to the standard APR of 20.99% (variable) once the six months is up.

Live customer service on the phone in seconds. If you have any problems while using this credit card, there is live customer support via the phone in sixty seconds or less.

Timely reminders. E-mail reminders are sent out to reduce the likelihood of having unexpected charges and fees occurring out of the blue. If you’re approaching your credit limit, you should receive an email to let you know.

No annual fee or set-up fees. As there are no set-up or annual fees, you shouldn’t be charged for the privilege of using the card.

0% fraud liability. If unauthorized purchases are made on the card as a result of fraudulent activity, you’re not considered liable for the costs.

Disadvantages

Tiered cash back rates. The 1% cash back bonus on purchases made using the card is slightly misleading as this only comes into play if your total purchases for the year exceed $3000. If they don’t, you only qualify for a lesser bonus rate, which isn’t as attractive (see the 0% purchase APR paragraph above for more on this).

Foreign transaction fees. If you plan to use the card abroad, you’ll be charged a foreign transaction fee of 2% of the US dollar price. For example, if you spent the equivalent of $150 on the card in foreign currency, you’d be charged around $3 as a foreign transaction fee. It may not sound very significant, but it’s something to be aware of because some credit cards have a lower foreign transaction fee or waive it altogether.

Cash back bonuses are lost if the account is closed. If the account is closed before you’ve been able to redeem for rewards, any cash back bonuses will be lost.

Final Thoughts

The 5% cash back bonus is impressive, but it’s easy to be burnt by this if you’re tempted to use the card to make category purchases that you wouldn’t otherwise have made just to get the bonus (be disciplined!). The tiered cash back system is a slight disadvantage, but this can be offset by the 5% to 20% cash back for shopping through the Shop Discover partners if you were going to make these type of purchases anyway. As far as I’m aware, this level of cash back is unique to the Discover More card. Pay the balance off every month, even though the interest isn’t as bad as some other credit cards (depending on which level of APR you ultimately qualify for), and you won’t have to worry about the interest rate and can maintain a good credit score.