In-depth review of the Discover it Cash Back credit card. See how you can earn 5% back in rotating categories each quarter and get a $0 annual fee. Learn the pros and cons and apply now!
In this review, we’ll take an in-depth look at Discover it Cash Back’s top benefits and features. You’ll learn about its bonus categories, cashback match promotion, credit score needed for approval, and more. We’ll also highlight some potential downsides and compare it to other popular cash back cards.
Let’s dive in!
Introduction
The financial world is teeming with credit card options, but the Discover it Cash Back card truly stands out. With its enticing rewards program and unique features, it's a card worthy of consideration for your wallet.
Claire Tsosie, writing for NerdWallet, extols the card's virtues, emphasizing its 5% cash back in rotating quarterly categories, a compelling 0% introductory APR for 15 months, and a generous sign-up bonus that matches all your cash back earnings in the first year—potentially doubling your rewards. Let's dive deeper into this card to understand how it can bolster your financial portfolio.
Discover it Cash Back: The Basics
Card Essentials
- Card Type: Cash back.
- Annual Fee: $0.
- Regular APR: 17.24%-28.24% Variable APR.
- Intro APR: 0% intro APR for 15 months on purchases and balance transfers.
- Recommended Credit Score: 690-850 (Good - Excellent).
Discover It Rewards Program
The heart of the Discover it Cash Back card lies in its rewards program, which can be summarized as follows:
- 5% cash back on purchases in rotating quarterly categories, up to $1,500 in spending per quarter (requires activation).
- 1% cash back on all other purchases.
Redemption Options
Discover offers flexible redemption options, allowing you to make the most of your rewards:
- Direct deposits into any account.
- Statement credits on your credit card.
- Donations to select charities.
- Shopping at Amazon.
- Shopping through PayPal.
- Gift cards and eCertificates.
Additional Benefits
The card doesn't stop at rewards; it also provides extra perks such as:
- Free access to your FICO score.
- Access to Discover's free Social Security number monitoring service.
Benefits and Perks
Discover It 5% Cash Back in Rotating Categories
The Discover it Cash Back card offers an impressive 5% cash back in rotating quarterly categories. This kind of reward rate is a rarity, especially on a card with no annual fee. These categories typically include popular spending areas like gas stations, grocery stores, and restaurants.
If you fully utilize the 5% cash back by activating and spending up to the $1,500 quarterly limit, you could earn a substantial $300 in bonus cash back each year, in addition to the 1% cash back on all other purchases. This makes the card an attractive choice for savvy shoppers.
A Potentially Valuable Sign-Up Offer
One unique feature of the Discover it Cash Back card is its sign-up bonus. In your first year, Discover will match all the cash back you earn. Yes, you read that right - match it. So, if you manage to accumulate $150 in cash back during your first year, Discover will generously turn it into $300. This offer has the potential to be highly rewarding, especially for big spenders.
Introductory 0% APR Period
The card also offers a generous introductory 0% APR period, providing you with 15 months to pay off purchases and balance transfers without accruing interest. After that, a variable APR ranging from 17.24% to 28.24% applies. This feature is particularly valuable if you're planning a large purchase or wish to consolidate existing high-interest debt.
Discovery Card: Unveiling the Power of Rewards and Convenience
How the Discover it Cash Back Rewards Work
The Discover it Cash Back provides 5% cash back on purchases in categories that change each quarter. Common categories include gas stations, Amazon, grocery stores, restaurants, and more. Purchases outside the bonus categories earn 1% back with no limit.
To earn the 5% rate, you must activate it each quarter. Spending is capped at $1,500 per quarter before dropping to 1%. The rotating structure means your spending won't always align with the bonuses. But when the stars align, Discover offers a tremendous 5% return on up to $6,000 in annual purchases.
I'll use real data to estimate potential earnings:
- Average household yearly spending: $15,900
- Average quarterly grocery spending: $1,235
- Average quarterly gas station spending: $392
With optimal category activation, you could realistically earn:
- $146 in 5% cash back on groceries and gas
- Unlimited 1% back on remaining $14,277 in spending = $143
- Total first year estimated cash back = $289
100% Match on First Year Rewards
What makes this card truly stand out is Discover's Cashback Match. They automatically match all the cash back earned in your first 12 months as a cardholder.
For example, if you earn $300 in rewards in year one, Discover will give you a $300 match. There's no minimum spending requirement and no maximum cap on this offer.
Using our earnings estimate, you could get a $289 match. That doubles your first year rewards for a total of $578 back.
The match incentive encourages new cardholders to maximize the 5% categories. Just remember you must wait until the one year mark to receive the extra cash back.
Low Interest Rates and Fees
Given its solid rewards structure, the Discover it Cash Back card maintains relatively low costs. There is no annual fee whatsoever. Many competing cards with bonus categories charge annual fees up to $95.
The regular APR ranges from 17.24% to 28.24% variable. Discover also offers new cardholders a 0% intro APR on purchases and balance transfers for the first 15 months. This provides over a year of financing without interest charges.
Late and returned payment fees are capped at $41, but are waived for your first late payment. There is no penalty APR that kicks in if you pay late or miss a payment.
Discover it Cash Back vs. the Competition
When you're considering a credit card, it's essential to evaluate it in comparison to other options available in the market. Let's stack up the Discover it Cash Back against a few prominent competitors to help you make an informed decision.
1. Discover it Cash Back vs. Citi Double Cash Card
Discover it Cash Back:
- Rewards: 5% cash back in rotating quarterly categories (requires activation), 1% on all other purchases.
- Sign-up Bonus: Doubles all cash back earned in the first year.
- Annual Fee: $0.
- Intro APR: 0% for 15 months on purchases and balance transfers.
- Recommended Credit Score: 690-850 (Good - Excellent).
- Additional Perks: Free access to FICO score, Social Security number monitoring.
- Rewards: 2% cash back on all purchases (1% when you make a purchase, 1% when you pay it off).
- Sign-up Bonus: None.
- Annual Fee: $0.
- Intro APR: Not typically offered.
- Recommended Credit Score: 630-850 (Average - Excellent).
- Additional Perks: None.
Comparison:
- Discover it Cash Back is ideal for individuals who are willing to maximize rewards by actively participating in rotating categories and want a significant sign-up bonus.
- Citi Double Cash Card offers a simple and consistent 2% cash back on all purchases, making it a hassle-free choice for earning rewards without the need for quarterly activations.
2. Discover it Cash Back vs. Citi Custom Cash Card
Discover it Cash Back:
- Rewards: 5% cash back in rotating quarterly categories (requires activation), 1% on all other purchases.
- Sign-up Bonus: Doubles all cash back earned in the first year.
- Annual Fee: $0.
- Intro APR: 0% for 15 months on purchases and balance transfers.
- Recommended Credit Score: 690-850 (Good - Excellent).
- Additional Perks: Free access to FICO score, Social Security number monitoring.
Citi Custom Cash Card:
- Rewards: 5% cash back in your top eligible spend category each billing cycle, up to $500 in spending, and 1% cash back on all other purchases.
- Sign-up Bonus: None.
- Annual Fee: $0.
- Intro APR: 0% for an introductory period on purchases and balance transfers (offer may vary).
- Recommended Credit Score: 680-850 (Good - Excellent).
- Additional Perks: None.
Comparison:
- Discover it Cash Back shines with its rotating categories and sign-up bonus, making it attractive for those who want to actively manage their rewards.
- Citi Custom Cash Card offers flexibility by allowing you to choose your highest spending category, which can be more appealing if you have specific spending habits that don't align with Discover's quarterly categories.
3. Discover it Cash Back vs. Chase Freedom Flex
Discover it Cash Back:
- Rewards: 5% cash back in rotating quarterly categories (requires activation), 1% on all other purchases.
- Sign-up Bonus: Doubles all cash back earned in the first year.
- Annual Fee: $0.
- Intro APR: 0% for 15 months on purchases and balance transfers.
- Recommended Credit Score: 690-850 (Good - Excellent).
- Additional Perks: Free access to FICO score, Social Security number monitoring.
Chase Freedom Flex:
- Rewards: 5% cash back on up to $1,500 in combined purchases in rotating bonus categories (requires activation), 3% on dining and drugstores, 1% on all other purchases.
- Sign-up Bonus: Typically includes a cash back offer after spending a certain amount in the first few months.
- Annual Fee: $0.
- Intro APR: 0% for an introductory period on purchases and balance transfers (offer may vary).
- Recommended Credit Score: 690-850 (Good - Excellent).
- Additional Perks: Variety of bonus categories, additional benefits like purchase protection.
- Chase Freedom Flex Card Q3 2023 Bonus Categories: Gas, Electric Vehicle (EV), and Entertainment
Comparison:
- Both Discover it Cash Back and Chase Freedom Flex offer lucrative 5% cash back in rotating quarterly categories with no annual fee.
- Discover it Cash Back features a unique sign-up bonus of doubling cash back in the first year, while Chase Freedom Flex typically includes a cash back bonus based on initial spending.
- Chase Freedom Flex stands out with its fixed bonuses in categories like dining and drugstores, offering more consistent rewards beyond rotating categories.
table comparing the key features of the Discover it Cash Back, Citi Double Cash Card, and Chase Freedom Flex:
| Feature | Discover it Cash Back | Citi Double Cash Card | Chase Freedom Flex |
|---|---|---|---|
| Rewards | 5% cash back in rotating quarterly categories (requires activation), 1% on all other purchases | 2% cash back on all purchases (1% when you make a purchase, 1% when you pay it off) | 5% cash back on up to $1,500 in combined purchases in rotating bonus categories (requires activation), 3% on dining and drugstores, 1% on all other purchases |
| Sign-up Bonus | Doubles all cash back earned in the first year | None | Typically includes a cash back offer after spending a certain amount in the first few months |
| Annual Fee | $0 | $0 | $0 |
| Intro APR | 0% for 15 months on purchases and balance transfers | Not typically offered | 0% for an introductory period on purchases and balance transfers (offer may vary) |
| Recommended Credit Score | 690-850 (Good - Excellent) | 630-850 (Average - Excellent) | 690-850 (Good - Excellent) |
| Additional Perks | Free access to FICO score, Social Security number monitoring | None | Variety of bonus categories, additional benefits like purchase protection |
Please note that the specifics of these cards, including rewards, bonuses, and terms, may change over time, so it's essential to check the latest offers and terms from the respective issuers before making a decision.
Drawbacks and Considerations
The Discover it Cash Back isn't the best fit for everyone. Here are some reasons you might want to explore other options:
- Complexity: With rotating bonus categories that require quarterly activation, the Discover it Cash Back is relatively complex. If you prefer something simpler, consider the Citi Double Cash Card, which offers a consistent 2% cash back on all purchases.
- Lack of Control: With the Discover it Cash Back, you don't have a say in which categories earn 5% cash back. Other cards, like the Citi Custom Cash Card, offer similar rewards with more flexibility.
Capital One SavorOne Student Cash Rewards Credit Card: The Ultimate Guide
Conclusion
In the world of credit cards, the Discover it Cash Back card shines as a beacon of rewards and opportunities. Its 5% cash back in rotating categories, doubled sign-up bonus, and 0% APR offer make it an appealing choice for those willing to actively manage their rewards. However, it may not suit everyone's preferences, as it requires quarterly activation and lacks category choice.
Ultimately, the best card for you depends on your spending habits, desire for rewards simplicity, and how actively you wish to manage your credit card rewards. Each card has its strengths, so choose the one that aligns best with your financial goals and lifestyle.
FAQs
How does the Discover it Cash Back card’s sign-up bonus work?
In your first year as a cardholder, Discover will match all the cash back you earn, effectively doubling your rewards.
Are there any limitations to the 5% cash back on rotating categories?
Yes, there's a spending cap of $1,500 in combined purchases in the rotating categories each quarter. You must also activate the categories to earn the 5% cash back.
Can I choose my own 5% cash back categories with the Discover it Cash Back card?
No, the categories are predetermined by Discover and rotate each quarter. However, you can view the annual calendar of categories in advance.
Is the Discover it Cash Back card suitable for international travel?
It has a lower acceptance abroad compared to some other cards, as it does not charge foreign transaction fees. It's advisable to have an alternative card for international use.
Does the Discover it Cash Back card offer purchase protection?
The card's primary focus is on rewards, and it may not offer extensive purchase protection benefits. You may want to explore other cards if purchase protection is a priority.
What is the quarterly maximum amount for Discover Student Credit Card?
The specific quarterly maximum amount for the Discover it Student Cash Back Credit Card varies as it is subject to rotating bonus categories. Generally, cardholders can earn 5% cash back on up to $1,500 in purchases within these categories each quarter. However, this limit can change depending on the categories and any special promotions offered by Discover.
To get the most accurate and up-to-date information on the quarterly maximum and eligible categories, it's recommended to refer to the terms and conditions provided by Discover on their official website .
Please note that the $1,500 spending limit is a common threshold for many of Discover's cashback cards. It's advisable to review the specifics of the current offer for the Discover it Student Cash Back Card to ensure you understand the current terms and benefits associated with the card.
What credit score is needed for Discover it credit card?
A credit score of 690 to 850 is often required for the Discover it Credit Card, and this is generally considered to be good to exceptional. However, the standards for acceptance can change, so some applicants with marginally lower scores might still be accepted.
What are the disadvantages of Discover it credit card?
While the Discover it Credit Card offers many benefits, some potential disadvantages include:
Limited international acceptance.
Rotating bonus categories that require activation.
No option to choose your bonus categories.
Potential for a lower credit limit for some applicants.
What is the average credit limit on a Discover it card?
Depending on a person's creditworthiness and financial position, the typical credit limit on a Discover it card can change significantly. Credit limits might be as little as a few hundred dollars or as high as several thousand.
What is the highest credit limit on Discover it?
Additionally, each person's Discover it card has a different maximum credit limit. Your credit limit will be determined by Discover depending on your income, credit history, and other variables. While some cardholders may have higher credit limits than others, vice versa is also possible.
What is the lowest limit on Discover it credit card?
For those with weak or restricted credit histories, the lowest credit limit on a Discover it card may be relatively low. For some applications, it might be as low as a few hundred dollars.
What’s the minimum payment on a $15,000 credit card?
Depending on the terms and conditions of the credit card issuer, a $15,000 credit card balance may require a different minimum payment. It is often determined as a percentage of the balance, frequently between 2 and 3 percent. Therefore, the minimum payment for a $15,000 balance could range from $300 to $450, but it's important to review the rules of your particular card.
Why is my Discover it card limit so low?
Your credit history, income, and credit utilization are just a few of the factors that could be to blame for your Discover it card limit being low. You can get in touch with Discover to inquire about a potential credit limit increase if you think your limit ought to be greater.
Is there a minimum income for Discover it card?
The Discover it card does not have a set minimum income criteria, but your income will be taken into account when establishing your eligibility and credit limit. Your chances of getting approved will rise if your salary is better and can sustain a bigger credit limit.
Do you have to pay Discover card in full every month?
Discover, like other credit card issuers, does let you to make a minimum payment even though it is recommended to pay your credit card amount in full each month to prevent interest costs. But if you merely make the bare minimum payment, you'll have to pay interest on the outstanding sum.
Does Discover give credit increases?
Yes, Discover may grant qualifying customers credit limit increases. Through your online account, you can ask Discover to raise your credit limit. Depending on your creditworthiness and payment history, Discover may also check your account on a regular basis and make an increase offer.
Does everyone get approved for Discover credit card?
A Discover credit card won't be approved for everyone. Your credit history, income, and other financial concerns are among the many variables that affect approval. Discover evaluates every application on its own.
Can I get a Discover it card without a job?
Even though having a job can help your credit card application, it's not the only aspect taken into account. If you have several sources of income or a solid credit history, you can still be approved for a Discover it card.
Can I get a Discover card with a 550 credit score?
It may be difficult to be authorized for a Discover it card with a credit score of 550, which is regarded as weak. Applicants with better credit ratings are often preferred by Discover.
What are the qualifications for a Discover card?
A good to exceptional credit score, enough income, and a long credit history are requirements for a Discover card. It's important to check the card's characteristics before applying because each Discover card may have unique restrictions.
Where is Discover not accepted?
Compared to Visa or Mastercard, Discover cards are typically less readily accepted abroad. Some nations or merchants may only welcome you in a restricted capacity. When traveling abroad, it is a good idea to have a backup card.
Is a Discover card good for beginners?
Beginners who have a reasonable to good credit history may find Discover cards useful. They are a wonderful option for simultaneously developing credit and earning rewards because they frequently give cash back benefits and have no annual fees.
Does Discover check your income?
Yes, Discover may do so in order to assess your eligibility and credit limit throughout the application process. For an application to be successful, precise income information must be provided.
Does Discover it do a hard pull?
When you apply for a Discover credit card, Discover normally pulls your credit report aggressively. Your credit score could momentarily be impacted by this inquiry.
Is Discover card accepted at Walmart?
In general, Walmart locations do accept Discover cards. However, as acceptance restrictions can differ, it's a good idea to double-check with the particular business location.
Does Amazon accept Discover?
Yes, Discover cards are accepted as a form of payment on Amazon. On the website and mobile app of Amazon, you can make purchases with your Discover card.
Why don’t people take Discover?
Because they believe Discover cards have less global recognition than other well-known card networks like Visa and Mastercard, some people may decide not to use them. Nevertheless, Discover's acceptance has grown over time.
Is Discover accepted at Target?
Yes, Target stores typically accept Discover cards. Though acceptance regulations can differ, it's always a good idea to double-check with the particular retail location.
3 thoughts on “Discover it Cash Back Review: 5% Rewards”