Discover it® Cash Back Card Review: Rotating Category Bonuses With No Annual Fee

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Rotating Category Bonuses With No Annual Fee

The Discover it® Cash Back card is a mainstay among top cash-back credit cards. Its rotating bonus categories give cardholders the chance to maximize rewards on everyday purchases, and with the first-year Cashback Match, you could earn far more than a traditional cash-back credit card sign-up bonus. The card offers 5% cash back on rotating categories for up to $1,500 in purchases quarterly and 1% back on all other purchases. Here’s what you need to know about the Discover it® Cash Back card and how it stacks up against some other options.

Rewards Rates

The Discover it Cash Back card offers 5% cash back on up to $1,500 spent quarterly in rotating bonus categories and 1% back on all other purchases. The bonus categories can encompass an actual spending category or a single merchant. The quarterly maximum rewards amount you can earn from the Cashback Bonus is $75.

You need to activate your Cashback Bonus each quarter, but that's as easy as clicking on the button in your reminder email, logging in to your online account or calling the number on the back of your card.

Sign-Up Bonus

The Discover it Cash Back card doesn't offer a traditional sign-up bonus. Instead of giving you a set amount after you meet a minimum spending threshold, Discover matches the cash back you earn during your first year as a cardholder. Essentially you'll get 10% cash back on the rotating bonus categories and 2% back on everything else for that first year. Depending on how much you spend, you can easily rack up more cash back over 12 months than what you'd get with another card's sign-up bonus.

The only caveat is that Discover doesn't give you the Cashback Match until after your 12 months. But that dollar-for-dollar match can be great for big spenders. Many cash-back credit cards offer $150 or $200 as a welcome bonus. But if you max out your 5% categories with the Discover it Cash Back card every quarter, that’s an extra $300 with CashBack Match—on top of the $75 quarterly maximum you’re already getting.

Recommended Credit Cards

Credit Card	Rewards Rate	Annual Fee	Bonus Offer	Learn More
Chase Sapphire Preferred® Apply Now	1x- 5xPoints More Info The card offers 5x points per dollar on travel booked through Chase Ultimate Rewards, 3x points on dining (including eligible takeout and delivery services), as well as 3x points on select streaming services and online grocery purchases (excluding Target, Walmart and wholesale clubs). This card earns 2x points on all other travel spending and 1x point per dollar everywhere else. Chase broadly defines travel to include not just airfare, hotels and rental cars, but expenses like parking, tolls and public transit too.	$95	60,000Chase Ultimate Rewards Points More Info Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. Dollar Equivalent: $1,380 (60,000 Chase Ultimate Rewards Points * 0.023 base)	Apply
Southwest Rapid Rewards® Premier Credit Card Apply Now	1x - 3xPoints More Info Earn 3 points for every $1 on Southwest Airlines® purchases, 2 points for every $1 on Rapid Rewards hotel and car rental partners, 2 points per $1 on local transit and commuting (including rideshare), 2 points per $1 on internet, cable, and phone services; select streaming, and 1 point for every $1 on all other purchases.	$99	75,000Southwest Rapid Rewards Points More Info Earn 75,000 bonus points after spending $3,000 on purchases in the first 3 months Dollar Equivalent: $1,125 (75,000 Southwest Rapid Rewards Points * 0.015 base)	Apply
Wells Fargo Active Cash® Card Apply Now Rates & Fees	2%Cashback More Info Earn unlimited 2% cash rewards on purchases.	$0	$200Cash Bonus More Info Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months.	Apply Rates & Fees
Citi Custom Cash® Card Apply Now Rates & Fees	1% - 5%Cashback More Info Earn 5% cash back on purchases in your top eligible spend category each billing cycle, up to the first $500 spent, 1% cash back thereafter. Also, earn unlimited 1% cash back on all other purchases.	$0	$200Cash Bonus More Info Earn $200 in cash back after you spend $1500 on purchases in the first 6 months of account opening. This bonus offer will be fulfilled as 20,000 ThankYou® points, which can be redeemed for $200 cash back.	Apply Rates & Fees

How to Redeem Your Discover Cash Back

Here are the ways you can redeem your cash back:

• Get direct cash back: Request to have cash deposited into your bank account or receive a statement credit on your card account. 
• Spend online: You can use your rewards to shop online at Amazon.com or via PayPal
• or donate your cash back rewards to charity.
• Buy gift cards: If you use your rewards to buy gift cards, Discover will give you 5% or more value, depending on the merchant.

APR

This Discover card offers an introductory 0% APR for 15 months on both purchases and balance transfers. You can use the promotional intro APR to make a large purchase and pay it off interest free over 15 months. You can also use the promotion to make and pay down a balance transfer from another card. Intro APRs can be super useful, but remember that if you don't pay off your balance before the promotional period ends, you'll have to pay interest on the remaining balance. After the intro APR expires, your APR will be 17.24% to 28.24% based on your creditworthiness. 

There is a balance transfer fee, however. The intro fee is 3% of the amount of each transfer for transfers that hit your account by February 10, 2024, with the 0% intro APR balance transfer offer. After that, the fee is 5% of the amount of each transfer.

Fees

Here’s a quick look at the Discover it Cash Back card fees:

• Annual fee: $0
• Foreign transaction fees: $0 (but note that Discover cards aren't as widely accepted outside of the U.S. as some others)
• Late payment fee: $0 the first time, up to $41 each after that
• Returned payment fee: Up to $41
• Balance transfer fee: Intro fee of 3% of each transfer on your account by February 10, 2024, then 5% of each transfer
• Cash advance fee: $10 or 5% of the amount of each advance, whichever is greater

Discover it Cash Back Card Benefits

This card doesn't offer many standout benefits that stand out, but some you can look forward to are:

• Great CashBack Match offer for first 12 months
• Competitive ongoing rewards rate
• Zero-liability fraud protection and other security tools
• U.S.-based customer service
• Contactless payments
• Social Security number alerts (Discover will notify you if it finds your information on dark websites)

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Discover it Cash Back vs. Chase Freedom Flex℠

The Discover it Cash Back card is one of two major credit cards that offer quarterly rotating rewards. The Chase Freedom Flex℠ also offers 5% cash back on up to $1,500 spent quarterly at different places or categories. 

The Chase Freedom Flex℠ doesn't announce bonus categories for the full year, instead unveiling categories one at a time. This can be frustrating if you're considering this card but aren't sure if the categories will be a good fit for your spending. The good news is that while not identical, the Discover it Cash Back card and Chase Freedom Flex tend to offer similar categories to make that less of an issue.

For new cardholders, the Freedom Flex offers a one-time $200 bonus after you spend $500 in the first three months. Depending on how soon you want a sign-up bonus, this could be a better option than Discover's Cashback Match. The rewards rates also give it an advantage over the Discover card: 5% back on travel purchases through Chase Ultimate Rewards, 3% back at drugstores and on dining at restaurants, including takeout and eligible delivery services and 1% back on other purchases

And if you have the Chase Freedom Flex and the Chase Sapphire Preferred^®, Chase Sapphire Reserve^® or the Ink Business Preferred^® Credit Card, you can transfer rewards earned with your Freedom Flex to your travel card and get more flexibility and value with your redemptions. Neither card charges an annual fee, but the Freedom Flex does charge a foreign transaction fee.

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Discover it Cash Back vs. Citi Double Cash® Card

The Citi Double Cash® Card, from our partner Citi, is a flat-rate cash-back credit card that offers 2% cash back on all of your purchases—that's 1% back as you make a purchase and another 1% back as you pay it off.

The card also offers a 0% intro APR on balance transfers for 18 months (a 19.24% - 29.24% (Variable) APR applies after), although it doesn't offer a similar promotion for new purchases. The intro balance transfer fee is 3% for the first four months, then it's 5% on future balance transfers. There's a $5 minimum fee.

Again, the Cashback Match ensures you effectively earn at least 2% back on all of your purchases during the first year. After the first year, though, it wouldn't hurt to use both cards in tandem to ensure you're maximizing your rewards. You can use the Discover it Cash Back card for its 5% Cash-back bonus categories and the Citi Double Cash Card for all other purchases. Both cards have no annual fee, but the Citi Double Cash Card does charge a foreign transaction fee.

Is the Discover it Cash Back Card Right for You?

The Discover it Cash Back card is an excellent option if you want a straight cash-back credit card with the chance to earn higher rewards on everyday purchases in its bonus categories. If your spending generally aligns with the quarterly categories for the year, it can be a solid choice. Plus, the first-year Cashback Match makes it worth using this card for just about all of your purchases.

That said, after that first year, it's likely a good idea to use another card for your non-bonus spending. That way, you can earn more than a measly 1% back. The Discover it Cash Back card also isn't a great card for trips abroad, even without no foreign transaction fee—plan to have a Visa or Mastercard backup in case you can't use your Discover card.

Regardless of which card you choose, it's always a good idea to consider using multiple credit cards to maximize your rewards and other value you can get from different credit cards.