Discover it Cash Back

This Discover it credit card gives you a chance to earn at least 1% cash back on all your everyday spending, with a generous cash back bonus twist.

Every quarter, this credit card will earn a whopping 5% cash back in a new rotating category, up to a total of $1,500 spent per quarter. Maximize that bonus, and you'll have a no fee credit card with a generous rate of return.

Let's take a closer look at what this Discover it credit card has to offer.

• Discover it Cash Back rewards
• Discover it Cash Back benefits
• Discover it Cash Back downsides
• Comparison to Discover it Chrome Gas & Restaurants
• Alternatives to the Discover it Cash Back
• FAQ

Earning rewards with the Discover it Cash Back

One unique feature of this credit card is how you earn rewards. You'll earn:

• 5% cash back in different categories, up to $1,500 spent, each quarter, and
• 1% cash back on all other purchases.

If you maximize your spending in the 5% bonus category, you'll get a healthy rate of return on this credit card.

Discover it Cash Back Welcome bonus

Another unique feature is this card's welcome bonus. This isn't a simple flat cash back bonus after some arbitrary minimum spend requirement. No, it's much more interesting than that.

Discover offers to match, dollar for dollar, all of the cash back you earn in the first year you have the card. Now, you will have to wait to get your welcome bonus, of course, but this effectively doubles your rate of return for the first year.

This potentially makes for a very generous welcome bonus for a no fee credit card.

4 Discover it Cash Back benefits

Let's take a look at what else you can expect from the Discover it Cash Back card.

1. No foreign transaction fees

If you make a lot of purchases in non-U.S. currencies, this Discover it credit card can save you the usual 3% fee other cards normally charge. Foreign transaction fees are waived entirely, letting you keep that money in your pocket where it belongs.

2. Low APR on purchases and balance transfers for 14 months

You'll also enjoy 0% APR on purchases and balance transfers for the first 14 months, giving you a chance to make some big ticket purchases without paying a dime in interest if you have those paid off in 14 months. 0% APR is the best way to save on interest payments, of course.

Alternatively, you can save interest on existing credit card debt by transferring it to the Discover it Cash Back card, although you will pay a small fee for doing so.

3. Use your rewards at Amazon.com or PayPal when checking out

If you shop at Amazon.com or make purchases with PayPal, you can easily make use of the cash back rewards you've already earned, simply by using them to pay through either of these services when checking out. Why wait to receive and use your rewards when it's best to save money right now?

4. No annual fee

While cards with no annual fee aren't that unusual, it's still a nice feature, particularly for credit cards with solid cash back rewards. While many credit cards will waive the fee for the first year, you'll never pay a fee to keep this credit card in your wallet.

3 Discover it Cash Back downsides

This credit card has a few significant downsides, as well.

1. No included insurance coverages

Often overlooked, credit card insurance packages can be valuable, and can give you added peace of mind with complimentary extended warranty or purchase protection coverage. Some of the best insurance packages can be worth hundreds of dollars a year.

Unfortunately, this credit card includes no complimentary insurance coverage, so if that's important to you, you'll want to look for another card.

2. No additional perks or benefits

And while the more significant perks and benefits generally come with credit cards that have a high annual fee, there are other no fee credit cards that have additional benefits, such as early access to event tickets, concierge services, or discounts at participating retailers or partners.

Again, this Discover it credit card comes with nothing like that, which is a bit of a shame.

3. Limited acceptance outside of the U.S.

While Discover cards are increasingly accepted in the U.S., they continue to have limited acceptance outside of the country. If you travel at all, you'll want to keep this in mind when deciding which credit cards to keep in your wallet while you're traveling.

Comparison to the Discover it Chrome Gas & Restaurants

Discover offers a similar cash back credit card, the card.

Here's how these 2 cards stack up, side by side.

As you can see, these 2 cash back credit cards are identical except for how you earn rewards. Which card is better for you depends entirely on your spending patterns.

If you're able to take full advantage of the rotating 5% spending categories of the Discover it Cash Back, that will obviously turn into a better rate of return for you. But if you just want to stick with something simple that gives you a decent rate of return on gas and restaurants, the Discover it Chrome Gas & Restaurants card might be the better choice.

Earning rewards

Based on a typical $2,000 monthly spend, here's an example of the sort of return you can get on your spending with each card.

As you can see, if you use these credit cards for all of your spending, the average rate of return is relatively low. There are other credit cards with better earn rates for this sort of everyday spending.

Alternatives to the Discover it Cash Back

Here are a few other no fee cash back credit cards you might consider. As you'll see in the charts below, all of these have better average rates of return than the 2 Discover credit cards mentioned above.

Welcome bonus comparison

First we'll take a look at their welcome bonuses. 2 of these cards offer no welcome bonus at all, while the others all have generous welcome bonuses.

The Discover it Cash Back card is well in the lead with a welcome bonus worth an estimated $288, while the Discover it Chrome Gas & Restaurants card is in second place with a welcome bonus of an estimated $240.

Note that these 2 card welcome bonuses are the Cashback Match that Discover offers, so these welcome bonuses are actually equivalent to whatever cash back you earn in the first year you have the card. Earn more cash back, and you'll get an even higher bonus.

Rewards comparison

While the 2 Discover credit cards take the lead for estimated welcome bonuses, they fall short in terms of their everyday average rate of return compared to these other credit cards.

Here the PayPal credit card has a healthy lead, offering a flat 2% cash back on all spending. This is a solid rate of return on spending for a no fee credit card. The Chase Freedom Unlimited comes in a close second, which, when combined with its $200 welcome bonus, makes this credit card a solid choice as well.

In summary

No fee cash back credit cards are a great way to save money on your everyday spending.

The Discover it Cash Back credit card has a valuable welcome bonus that doubles your cash back earnings for the first year you have the card, and, if you can take full advantage of the rotating 5% cash back categories, you'll be able to maximize your everyday rate of return as well. You can even submit your application online.

Do you have a Discover it Cash Back credit card?

Are you able to maximize the 5% spending category every quarter, or is it more trouble than it's worth?

Let us know in the comments.

FAQ

What rotating categories earn 5% cash back with the Discover it Cash Back card?

For 2021, the rotating 5% bonus rewards categories are:

• Jan - Mar: 5% at grocery stores, Walgreens, and CVS,
• Apr - Jun: 5% at gas stations, wholesale clubs, and select streaming services,
• Jul - Sep: 5% at restaurants and PayPal, and
• Oct - Dec: 5% at Amazon.com, Walmart.com, and Target.com.

There is a spending limit of $1,500 per quarter for the 5% category, however, after which your earn rate will drop to the regular 1% cash back on all other spending.

What is the Discover it Cash Back card's foreign transaction fee?

This credit card has a 0% foreign transaction fee, saving you the usual 3% credit cards charge for purchases made in non-U.S. currencies.

What other cash back credit card does Discover offer?

Discover also offers the Discover it Chrome Gas & Restaurants credit card. You can learn more about this credit card and how it compares here.