Discover it Cash Back review

Who is the Discover it Cash Back for?

Discover it Cash Back is a valuable everyday credit card that offers cash rewards on your daily purchases. It is one of the most popular and well-received Discover cards because it does not require an excellent credit score and does not have an annual fee.

The key mechanic to the Discover It Cash Back Card is the rotating categories that allow cardholders to earn 5% cash back each quarter. The 5% rewards rate applies to the first $1,500 in purchases and then cardholders earn 1% cashback on all other expenses. The cash can be redeemed in any amount and transferred to your bank account. Discover will also match all the cash back you earn in the first 12 months after you open your new card.

To take full advantage of this card, you will want to maximize the 5% cash back quarterly earning categories. Keep in mind that the 5% cash back applies to the first $1,500 in purchases -- after which, you’ll earn 1%. Accordingly, this is a good card for those that are willing to pay more attention to their rewards, in order to maximize cash back each quarter. If you’re concerned about earning the standard 1% cash back after the first $1,500 in purchases, it’s best to maintain an additional credit card. 

Signup Bonus

The signup bonus is quite attractive. Discover will automatically match all the cash back you earn in the first year after you open your account. For example, if you earn $400 cash back, Discover will reward you an additional $400 at the end of the first year. There is no limit on how much cash back you earn. In addition, there is neither a signing up fee nor an annual fee, which means this card delivers an attractive return with little expense.

Rewards

As previously mentioned, you will get a 5% cash back bonus on the first $1,500 spent on the promotional category each quarter. This reward rate will help you quickly earn $75 cashback before you add in your other cashback from non-sponsored purchase categories. The other expenses will get 1% cashback, you will be rewarded each time you use the card.

The 5% cashback bonus is a bit complicated because the categories rotate each quarter. From January to March, you may get a bonus for grocery stores, such as Kroger and Wholefoods. You will make the most of this card if you read the fine print on the sponsored categories. For example, grocery store purchases exclude convenience stores, gas stations, warehouse clubs, discount stores, and supercenters (like Walmart & Target). This is not to say the rewards aren’t great, but this card requires a bit more planning to take advantage of the steep 5% rewards rate.

Benefits

This is one of the few rewards cards that also offers an introductory 0% APR period for both balance transfers and new purchases. This period is a lengthy 14 months of no interest payments, which makes this card a great option if you’re thinking about financing a larger purchase. Also, note that this purchase will count towards your cashback.

After the introductory period is over, cardholders will pay an APR between 11.99% to 22.99% on remaining account balances. If you’re considering transferring your existing card balances to this card, note that there are an initial 3% fee and a 5% fee for balances transferred after the first 60 days of account opening. Thus, that offer provides a great time for you to purchase some expensive items.

The redemption of your cashback rewards is flexible. You can redeem your cash back in any amount at any time to any bank account you want. You can also convert it to gift cards (in $20 increments), donations, instant eCertificates, a statement credit, or Amazon.com purchases.

If you have a positive experience as a Discover cardholder, you should take advantage of their referring-a-friend program. You will get a $50 referral reward when your friend applies for any Discover Card offer and you can refer up to 10 friends in a year. 

Last but not least, you can check your FICO score without any fee once a month. Discover also launched a free Social Security Number alert feature to protect your personal information.

No Annual Fee

Discover it Cash Back does not require an annual fee which means you can enjoy your rewards without calculating if they were worth the upfront fee. This policy lowers the threshold to access a line of credit, making this an excellent offer for those with limited or rebuilding credit.

Also, there is no foreign transaction fee which means you can use the card all over the world without cost. It is suitable for foreign students who study abroad and the people who work in other countries.

Cautions

5% cashback bonus is captivating but there are many limits that you should be aware of. Please check section Rewards for specific rules and remember to activate before each quarter to get access to the bonus.

Although there is no foreign transaction fee, you need to make sure that the stores in other countries do accept Discover. Discover is not as widely accepted as Visa or Mastercard in countries other than the United States. Make sure you have other cards with you in case Discover it Cash Back doesn’t work.

For any credit card, make sure you make your payments on time. Although Discover will not charge you a late fee for the first time, you will be charged up to $40 after that and your credit score will also be affected. Also if you miss a payment Discover can adjust the APR to 22.99%.

Conclusion

We can recommend this card primarily because it has no annual fee, which decreases the ownership overhead. The rewards structure really means this card truly what you make of it. The 5% cash back bonus on specific categories is very attractive for savvy cardholders who look up the categories every three months. Thankfully, the 1% cashback on everything else means you will still receive rewards on each purchase with the card.

In short, if you are willing to take the extra effort to study the policies for the cashback bonus, you will benefit more than you expected.