For those of you who have never had a credit card before, what’s stopping you? Many might respond with concerns about late fees and interest rates with a simple, “Why would I bother?” The Discover it Cash Back credit card puts those misgivings to bed. It offers a potentially huge sign-up bonus at the end of your first year — matching all your cash back rewards earned over the year dollar-for-dollar — plus a $0 annual feel, a $0 fee for your first late payment, and no penalty APR.
Even if you’ve had a credit card before, that kind of grace around late payments and an uncapped sign-up bonus is pretty appealing. Let’s take a closer look at the details of this user-friendly card.
Discover it Cash Back Overview
- No late fee on your first late payment
- No penalty APR
- Check your FICO Credit Score for free with your account
- Use contactless, touch-to-pay functionality at many major retailers
- Freeze it allows you to freeze your card if you lose it, then easily turn it back on again when found
- All Discover customer service professionals are US-based
- Free monitoring and alerts
- Redeem your cash back in any amount and use it when shopping with Amazon
This card is ideal for people new to using credit cards. It’s also great for people who want to carefully track the quarterly categories to maximize their sign-up bonus.
Cardholders who want travel, dining, or other rewards over simply cash back.
|Discover it® Cash Back||Chase Freedom®||Citi Double Cash Card||Capital One® QuicksilverOne® Cash Rewards Credit Card|
Cash back match
The big hook for this card is the sign-up bonus. For every single dollar you earn in cash back rewards during your first year — whether it’s on a purchase in the 5% cash back quarterly categories or 1% cash back on any other purchase — gets matched. Earn $1,000 in cash back rewards over the course of the year, and Discover will give you another $1,000 at the end of your first year.
5% cash back categories
Each quarter, Discover has a specific category in which all purchases made will earn you a whopping 5% cash back. And they aren’t niche categories, either. In 2020, there are grocery stores, CVS, and Walgreens in Q1; gas stations, Uber, Lyft, and wholesale clubs in Q2; restaurants and PayPal in Q3; and Amazon.com, Walmart.com, and Target.com in Q4.
Forgiveness for late payments
Oops. You missed your credit card payment. If you’ve got the Discover it Cash Back card, no worries. Your first late payment comes with a $0 fee (all late payments thereafter cost you $39). And whether it’s your first late payment or you can’t count how many times you’ve been late (not advisable for your credit score, but life happens), you won’t have to worry about a penalty APR.
5% cash back enrollment
In order to earn 5% cash back in the quarterly categories, you have to enroll each quarter. This task isn’t a huge to-do — you can do it online or in the Discover app with the click of a button. But it’s still something to keep track of every three months. Oh, and your 5% cash back rewards are capped at $1,500 each quarter.
Not universally accepted
While Visa and Mastercard are pretty much universally accepted across the United States, Discover is not as popular. Depending on where you shop, you could find out Discover is not accepted. While Discover can be used at 97% of locations that accept credit cards, you might still want to have a backup payment method ready just in case.
Discover it Cash Back Compared to Chase Freedom
There are a lot of cash back cards out there, but Discover it and Chase Freedom are fairly unique in their offering of 5% cash back on certain purchases. In both cases, you’ll have to keep track of the quarterly categories, but you can use them to score some serious rewards.
There are some notable differences between the cards, though. Chase Freedom is a Visa card, which means you can use it pretty much anywhere. But the Discover it Cash Back card wins in the sign-up bonus category. While the bonus is a set $200 for Chase Freedom, there is no max on the Discover it bonus potential. The more you spend with your card, the more cash back you earn in your first year, the more you’ll get when Discover pays out your bonus at the end of that year.
How to Earn Cash Back
Want to maximize the rewards you earn with your Discover it Cash Back card? Use these tips:
- Use your card as much as possible. Since you get 1% unlimited cash back on all purchases, the more you can use your card, the more you’ll earn.
- Set a calendar reminder to activate quarterly rewards. The 5% cash back categories are where you can really cash in — literally. But you only earn the 5% if you’ve activated the category online or in the Discover app, so put a recurring reminder on your calendar to click that button.
- Keep the 5% categories top of mind. Post a sticky note on your desk or keep another reminder handy so you don’t forget which retailers will score you 5% cash back each quarter. Nothing against Rite Aid, for example, but if you want to maximize your cash back in the first quarter of 2020, choose Walgreens or CVS instead since they are included in the 5% cash back category for Q1.
How to Redeem Cash Back
Redeeming your cash back is extremely easy with the Discover it card — and you can redeem in any amount at any time. Starting at a penny, you can redeem your cash back for:
- Credit to your account
- Charitable donations
- Purchases on Amazon
You can also redeem for gift cards and instant eCertificates once you have $20 of cash back rewards in your account.
The Bottom Line
While it won’t be accepted everywhere, the Discover it Cash Back card is well worth your consideration. The sign-up bonus alone is enough to have this writer (with an already-full wallet) thinking seriously about getting it. And with no late fee for your first missed payment and no penalty APR, it’s a low-stakes, high-reward pick.
Want to learn more about the Discover it Cash Back card? Check it out — along with our other top picks for credit cards.