The Discover it Cash Back is the perfect step up from a basic rewards card for consumers who are willing to put in some work to maximize their spending return.
Things to consider
Not a fan of managing which rewards categories are active? This card may not be the one for you. Cardholders must activate the rewards categories each month, otherwise they’ll only earn 1% cashback for those purchases instead of 5%. Rewards drop down to 1%, however, once the quarterly spending limit of $1,500 is reached. In addition to the high rewards potential, the card comes with a 0% intro APR for both purchases and balance transfers for an impressive 18 months (then 16.74% to 27.74% variable). That means new purchases won’t accrue interest within that time, and neither will a transferred balance from another credit card. The rewards structure is based around rotating quarterly spending categories that require activation every quarter. Cardholders will receive 5% cashback (on the first $1,500 spent each quarter, then 1%) for expenses like grocery stores, fitness clubs and gym memberships, gas stations, Target purchases and online shopping. You also earn 1% cashback automatically on all other purchases with no limit. Pros
5% cash back for a variety of different purchases0% intro APR for purchases and balance transfersCashback matchNo annual fee
Cons
No shopping or travel protections$1,500 quarterly spending limit for major rewards
Another note to keep in mind: Discover is not as widely accepted compared to Visa or Mastercard, so you may be more limited in terms of where you can use it. You’ll likely need a backup card in case a restaurant or other establishment doesn’t accept it.
Discover it® Cash Back redemption details
After activating rewards for the quarter and earning 5% cashback (on the first $1,500 spent), there are several things cardholders can do with their cashback. Cardholders can redeem rewards as: Gift cards can only be redeemed in $20 increments, but there are no minimum redemption requirements for any of the other options.
How does it compare to other cashback cards?
If you prefer a more straightforward rewards structure, a flat-rate card might be a better choice. Credit card users who don’t want to worry about changing rewards categories may want to consider an alternative, like the Citi® Double Cash Card. There’s no cashback limit and no bonus categories to track. The Chase Freedom Flex is another cashback card offering consumers rotating rewards categories at an identical rate to the Discover it Cash Back card. There’s also an intro offer of $200 cash when you spend $500 on purchases within three months of account activation. And for the first year, the card earns 5% cashback for gas. It covers a bit more ground than the Discover card thanks to its static 3% cashback categories for dining and drug stores. And it could even pull ahead in reward potential depending on how much you spend, despite Discover’s cashback match. [This article was first published on The Simple Dollar in 2020. It was updated in March 2022.]
