EDITORIAL REVIEW

Discover it Cash Back Review: 5% Rewards Are Worth a Little Work

This card offers a high rewards rate in rotating categories, a good 0% APR offer and an unusual bonus that could become a windfall.

Jordan November 12th, 2019

Our Take

NerdWallet rating ?
NerdWallet's ratings are determined by our editorial team. The scoring formula takes into account the type of card being reviewed (such as cash back, travel or balance transfer) and the card's rates, fees, rewards and other features.

86

The bottom line: If you're OK with a shorter interest-free window, other cards earn ongoing rewards or feature lower balance transfer fees.
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Discover it® Balance Transfer

ANNUAL FEE

$ 822

REGULAR AFR

0% on balance transfers for 22 months

INTRO APR

0%

RECOMMENDED CREDIT SCORE
816-1000

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Quick Facts

  • INTRO OFFER: Discover will match ALL the cash back you’ve earned at the end of your first year, automatically. There’s no signing up. And no limit to how much is matched.
  • Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com and more up to the quarterly maximum, each time you activate. Plus, earn unlimited 1% cash back on all other purchases – automatically.
  • Redeem cash back any amount, any time. Rewards never expire.
  • 100% U.S. based customer service.
  • Get your free Credit Scorecard with your FICO® Credit Score, number of recent inquiries and more.
  • Get an alert if we find your Social Security number on any of thousands of Dark Web sites.* Activate for free.
  • No annual fee.
  • View Rates and Fees

Pros & Cons

  • Bonus cash back categories
  • No annual fee
  • Intro APR period on Purchases and Balance Transfers
  • No foreign transaction fee
  • Slightly less merchant acceptance for Discover in US – acceptance outside of US can be an issue
Compare to Other Cards
Discover it® Balance Transfer
RECOMMENDED CREDIT SCORE

816- 1000

Best For

Long-Term Value

Annual fee

$ 822

Rewards rate

13.49% - 24.49%

Intro Offer

0%

Pros

  • Bonus cash back categories
  • No annual fee
  • Intro APR period on Purchases and Balance Transfers
  • No foreign transaction fee

Cons

  • Slightly less merchant acceptance for Discover in US – acceptance outside of US can be an issue

Chase Sapphire Preferred® Card
RECOMMENDED CREDIT SCORE

690- 850

Best For

BEST FOR: EASY-REDEEM TRAVEL REWARDS AND A BONUS

Annual fee

$ 95

Rewards rate

1x-2x

Intro Offer

60,000

Pros

Pros

  • A large bonus
  • No foreign transaction fee
  • Cool factor – metal card
  • Earn more points on travel and dining at restaurants
  • Premium travel protection benefits

Cons

Cons

  • $95 annual fee

Blue Cash Preferred® Card from American Express
RECOMMENDED CREDIT SCORE

800- 950

Best For

GROCERIES, GAS AND COMMUTING

Annual fee

$ 800

Rewards rate

1%-6%

Intro Offer

250

Pros

Pros

  • Leading cash-back rewards at U.S. supermarkets
  • Bonus offer for new cardholders
  • Intro APR period on Purchases and Balance Transfers

Cons

Cons

  • Has annual fee — but if you spend more than $31 per week at U.S. supermarkets, the rewards offset the fee
  • American Express isn’t accepted at as many merchants as Visa or Mastercard
  • $25 minimum redemption

Full Review

The Discover it® Cash Back features a high cash-back rate in rotating quarterly categories — but you don’t get those rewards automatically, activation is required and spending caps apply.

Even so, for people who prefer cash back and don’t mind putting in a little work, this $0-annual-fee card is well worth it.

Nerd tip: Discover offers a card similar to this one called the Discover it® Balance Transfer. It offers the same rewards, but the introductory 0% APR period is shorter for purchases and longer for balance transfers. Read our review of the Discover it® Balance Transfer.

Discover it® Cash Back: Basics

Card type: Cash back.

Annual fee: $0.

Sign-up bonus: Discover will match ALL the cash back you’ve earned at the end of your first year, automatically. There’s no signing up. And no limit to how much is matched.

Rewards:

  • 5% back in rotating quarterly categories on up to $1,500 in purchases each quarter (requires activation).

  • 1% back on all other purchases.

Redemption: You can redeem cash back in any amount, except in the case of gift certificates and eCertificates, which start at $20. Redemption options include:

  • Direct deposits into any account.

  • Statement credits on your credit card.

  • Donations to select charities.

  • Shopping at Amazon and via PayPal. (You can do this by linking your eligible Discover card to your Amazon or PayPal accounts, paying with that card and applying your cash back at checkout.)

  • Gift cards and eCertificates.

Foreign transaction fees: None.

Balance transfer fee: A 3% introductory fee and up to 5% on future balance transfers. Terms apply.

Other benefits:

The card’s current quarterly bonus categories are listed below:

Discover bonus rewards categories for 2020

Q1 (Jan. 1 – March 31)

• Grocery stores. • CVS. • Walgreens.

Q2 (April 1 – June 30)

• Gas stations. • Uber and Lyft. • Wholesale clubs.

Q3 (July 1 – Sept. 30)

• Restaurants. • PayPal.

Q4 (Oct. 1 – Dec. 31)

• Amazon.com. • Target.com. • Walmart.com.

Why you might want the Discover it® Cash Back

The robust rewards and benefits on the Discover it® Cash Back make it one of the most valuable everyday cash-back cards available.

5% CASH BACK IN ROTATING CATEGORIES

You would be hard-pressed to find a card with no annual fee that earns more than 5% cash back in bonus categories, which for the Discover it® Cash Back have recently included things like gas stations, grocery stores, restaurants, Amazon.com and more.

If you max out the 5% rotating quarterly category rewards each year on this card — that is, if you activated and spent up to $1,500 in those categories each quarter all year — you would earn $300 in bonus cash back, plus 1% back on every other purchase. For many shoppers, those lucrative ongoing rewards make this card a keeper.

A POTENTIALLY VALUABLE SIGN-UP OFFER

The Discover it® Cash Back comes with an uncommon sign-up bonus for new cardmembers in their first year: Discover will match ALL the cash back you’ve earned at the end of your first year, automatically. There’s no signing up. And no limit to how much is matched.

For example, if you earned $500 in rewards, Discover will give you another $500 in cash back at the end of your first consecutive 12 months of being a cardholder. For folks who plan to do a lot of spending on the card during that time, this unusual offer could prove incredibly valuable.

INTRODUCTORY 0% APR PERIOD

The Discover it® Cash Back offers plenty of breathing room for paying off balances after opening the account. It comes with a generous introductory offer: 0% APR for 14 months on purchases and balance transfers, and then the ongoing APR of 13.49% – 24.49% Variable APR. The balance transfer fee is an introductory 3% of the amount transferred, but can be as high as 5% on future balance transfers (see terms). That’s on par with other balance transfer cards. (For folks who need more time to pay off a balance transfer, consider going with its sibling card, the Discover it® Balance Transfer, instead.)

If you want to make a large purchase and pay it off over time, this is an especially valuable perk. Just keep in mind that if you’re using the card as a balance transfer option, you’ll likely want to avoid making new purchases with it, and instead use the card solely for paying off debt. That might mean missing out on the rich sign-up bonus offer.

Discover it® Cash Back vs. Chase Freedom®

Looking at cards that offer 5% cash-back rewards on rotating quarterly categories? Chances are the Chase Freedom® has been on your radar, too. At first glance, this card seems like a mirror image of the Discover it® Cash Back. But if you look a bit closer, a few important differences stand out.

WHAT THESE CARDS HAVE IN COMMON:

  • 5% cash back in rotating quarterly bonus categories on the first $1,500 in purchases each quarter. All other purchases earn 1% back.

  • A variety of bonus categories. Historically, they’ve ranged from broad options like restaurants and gas stations to specific retailers like Walgreens or Amazon.com. Past bonus categories can help you see what types of categories to expect in the future.

  • Requirement to activate quarterly categories.

  • No annual fee.

WHAT’S DIFFERENT ABOUT THE CHASE FREEDOM®:

  • Sign-up bonus can be earned quickly: Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening. (With the Discover it® Cash Back, you have to wait until the end of the first year to get your bonus.)

  • Slightly longer introductory 0% APR offer: 0% APR for 15 months on purchases and balance transfers, and then the ongoing APR of 16.49% – 25.24% Variable APR.

  • Rewards can be earned retroactively if you activate the categories by the 14th of the third month of the quarter; this is not the case with the Discover it® Cash Back.

  • Bonus categories aren’t announced all at once: Unlike eligible Discover cards, the Chase Freedom® doesn’t reveal its full slate of quarterly bonus categories for the entire year. Category announcements come only a couple of weeks before the start of a new quarter, which can make it harder to plan purchases.

  • It charges foreign transaction fees.

For more information about how these cards differ, read NerdWallet’s article comparing the Discover it® Cash Back and the Chase Freedom®.

Why you might want a different card

The Discover it® Cash Back isn’t the best fit for everyone. Here’s why you might want to look elsewhere.

OTHER CARDS OFFER SIMPLICITY

With rotating bonus categories that require quarterly activation, the Discover it® Cash Back is a relatively complicated card. If you want something more straightforward, try the Citi® Double Cash Card – 18 month BT offer.

This card offers an impressive 2% cash back on everything — 1% back on purchases and 1% back when you pay them off. With it, you can rake in big rewards for everyday spending without having to mess with bonus categories. Its annual fee is $0.

CHOOSE A BONUS CATEGORY

With the Discover it® Cash Back, you don’t have a say in which categories earn 5% cash back. With the Bank of America® Cash Rewards credit card, it’s a different story. You earn 3% cash back in the category of your choice (from among six options); 2% cash back at grocery stores and wholesale clubs (on up to $2,500 per quarter in combine spending in the 3% and 2% categories, then 1%); and 1% cash back on everything else. For the 3% category, you can choose from gas, online shopping, dining, travel, drugstores or home improvement/furnishings, and you can change the category each month. The annual fee is $0. New cardholders can earn $200 online cash rewards bonus after you make at least $1,000 in purchases in the first 90 days of account opening.

If you want to see how these cards compare with other rewards cards, refer to our list of best credit card offers.

Should you apply?

If you prefer a no-fuss card, you might want to pass on the Discover it® Cash Back. But if you’re willing to put in some extra effort for top-notch cash-back rewards, it might be the perfect fit for you.