Discover it® Cash Back
- Sign-up Bonus: None
- Rewards: 5% cash back on select quarterly rotating purchases, up to $1,500 in combined category purchases per quarter; unlimited 1% cash back on all other purchases, including favored category purchases above the cap
- Benefits: Double cash back during the first 12 months your account is open; Freeze It security feature
- Intro APR: 0% APR for 14 months on purchases and balance transfers
- Fees: $0 foreign transaction fees; balance transfers 3% of the transferred amount; cash advances 5% of the advanced amount ($10 minimum)
- Annual Fee: None
- Credit Needed: Excellent, Good
Discover it® Cash Back 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 Cash Back is part of a larger family of cash back and travel rewards credit cards, with stablemates such as Discover it Chrome, Discover it Miles, and Discover it for Students.
Discover it Cash Back 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 Cash Rewards Credit Card, and Citi Double Cash Card. Unlike most comparable cards, Discover it Cash Back doesn’t come with a traditional sign-up bonus – though it does automatically double cash back earned in the first year of card membership.
First-Year Double Cash Back
On your first card membership anniversary, Discover it Cash Back 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 Cash Back earns 5% cash back on select quarterly rotating categories. Popular categories include gas station purchases, department store purchases, and restaurant purchases. In the first quarter of 2019 (Q1 2019), grocery store purchases earn 5% cash back. A full list of forthcoming 5% cash back categories is available on Discover’s website.
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, pay-with-points at Amazon.com, 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.
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.
Discover it Cash Back comes with a 14-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.
Free FICO Score
Discover it Cash Back 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.
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.
This card requires very good to excellent credit. Any blemishes of note are likely to be disqualifying.
- No Annual Fee. Discover it Cash Back doesn’t have an annual fee. That’s a nice advantage over competing cards such as Blue Cash Preferred Credit Card from American Express and Capital One QuicksilverOne Cash Rewards Credit Card.
- First-Year Cash Back Boost Dramatically Increases Earning Power. Discover it Cash Back’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™ World Mastercard® (note: this offer is no longer available). 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 Cash Back 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 Cash Back doesn’t charge a foreign transaction fee. That’s great news for cardholders who travel abroad with any frequency. Some competing cards, including Amex EveryDay Card from American Express and Barclaycard CashForward (note: this offer is no longer available), come with foreign transaction fees ranging from 2% to 3%.
- Nice Intro APR Period. Discover it Cash Back has a 14-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, bank account deposits, and Amazon.com purchases at any time and in any amount. That’s a big advantage over competing cards with minimum redemption requirements.
- Don’t Need Excellent Credit. While Discover it Cash Back 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 Blue Cash Preferred Card from American Express and American Express EveryDay Preferred, require excellent applicant credit.
- No Sign-up Bonus. Discover it Cash Back doesn’t offer a fixed-rate sign-up bonus, only the double first-year cash perk. That’s a drawback compared to competing cards such as BankAmericard Cash Rewards MasterCard ($100 sign-up bonus).
- 1% Baseline Cash Back Is Lower Than Some Competitors. Discover it Cash Back’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 Card 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 Cash Back 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 Blue Cash Everyday from American Express, don’t require you to activate quarterly categories.
Like Chase Freedom and other cash back rewards cards with tiered, rotating spending categories, Discover it® Cash Back 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 Cash Back’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.
Discover it® Cash Back
Discover it® Cash Back is an ideal cash back credit card for moderate spenders who don’t mind manually activating their 5% categories each quarter and who can commit to spending $1,500 in those categories every quarter. Plus, with reasonable underwriting standards, Discover it Cash Back works for people without amazing credit. By the same token, this card isn’t meant for folks who can qualify for more generous cash back cards, nor those who prefer the simplicity of flat-rate cash back schemes.
The first-year cash back bonus, relatively low fees, lack of minimum redemption thresholds for cash redemptions, and reasonable underwriting requirements are all beneficial.
On the other hand, the lack of a sign-up bonus, a mediocre baseline cash back rate, and the manual activation requirement are all substantial drawbacks of this card. Overall, it’s a very good general-spending cash back card for moderate spenders.