Discover it® Balance Transfer review
Discover it® Balance Transfer
CardRatings Editor's Analysis: Pros & Cons
- Cardholders can take advantage of an intro 0% APR on balance transfers for 18 months and on purchases for six months (then, 11.99% - 22.99% Variable APR).
- Cash-back rewards are a huge incentive with this card as cardholders earn 5% cash back on up to $1,500 spent in quarterly rotating categories (activation required).
- As a new card member, you'll enjoy the benefit of having all the cash back you accumulate over the first year matched dollar-for-dollar. That means $150 in earned cash back will become $300 at the end of your first year.
- Even though the intro 0% APR for balance transfers could prove an excellent opportunity to save on interest, there is a balance transfer fee to plan for.
TABLE OF CONTENTS
- Discover it® Balance Transfer benefits
- What Discover says about this card
- Transferring a balance with Discover it® Balance Transfer
- How long does it take for Discover to transfer a balance?
- Discover it® Balance Transfer rewards
- Potential downsides of Discover it® Balance Transfer
- How Discover it® Balance Transfer compares to other cards
- Is Discover it® Balance Transfer a good card?
The Discover it® Balance Transfer card offers you plenty in the way of rewards opportunities, but also comes with a sweet balance transfer offer that we normally only see on cards for which that balance transfer offer is the primary selling point. In this case, however, you can earn as much as 5% back on your purchases (on up to $1,500 spent on purchases in categories that rotate quarterly; activation required) and also enjoy a card that offers you an introductory 18 months 0% APR on balance transfers and six months 0% APR on purchases (after the intro periods, the APR becomes 11.99% - 22.99% Variable APR).
Not bad features for a card that doesn't come with an annual fee. Here’s a look at more:
- First class customer service – 100% U.S.-based service available any time
- 0% intro APR on balance transfers for 18 months and purchases for six months (then, 11.99% - 22.99% Variable APR)
- 5% cash back on up to $1,500 spent in quarterly rotating categories (activation required)
- Unlimited 1% cash back on all other purchases
- Dollar-for-dollar match of all the cash back you've earned at the end of your first year
- No late fee for your first late payment
- Paying late won't raise your APR
- No annual fee
- No foreign transaction fees
- INTRO OFFER: Unlimited Cashback Match - only from Discover. Discover will automatically match all the cash back you've earned at the end of your first year! There's no minimum spending or maximum rewards. You could turn $150 cash back into $300.
- Earn 5% cash back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, gas stations and when you pay using PayPal, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases - automatically.
- Redeem cash back any amount, any time. Rewards never expire.
Now, about the introductory balance transfer offer part: 18 months is among the longest balance transfer intro periods on the market, so you stand to save some serious dough on interest if you have a balance you need to carry and pay it off over the course of a year and a half.
The 18-month intro period starts when you make your first transfer, and there’s no reason to wait. The longer you wait, the longer you’ll be paying interest on that balance on another card. There is a balance transfer fee to take into account, 3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*, but that’s common for these offers so shouldn’t come as a surprise. Remember, too, that your APR jumps to 11.99% - 22.99% Variable APR when the intro period ends.
Don’t forget: You also can take advantage of an introductory six months no interest on purchases made directly on your card (then, 11.99% - 22.99% Variable APR).
The timeline to process a balance transfer varies, but Discover states in its rates and fees documentation that “It takes at least 14 days after your account is opened to process payments to your other accounts.”
Given that, it’s important that you continue making payments on your existing balance until you verify the existing balance has been transferred to your new Discover card. You wouldn’t want to incur late fees or a ding on your credit by missing payments on your old card while waiting for the balance transfer to finalize.
Often credit cards with excellent balance transfer intro offers are "one trick ponies" in that they don't offer much in the way of perks or rewards earning – they are very specifically about making a balance transfer and taking advantage of the 0% intro period.
But Discover it® Balance Transfer is different. With this card, cardholders can earn plenty of rewards AND they're eligible for a Cashback Match bonus (You may have seen this mentioned alongside other Discover it® cards).
Here's the deal: At the end of your first year, Discover will MATCH all the cash back you earn during your first year. That means that earning $150 cash back in your first year is actually worth $300.
But how do you earn rewards? Well, you earn 5% cash back on up to $1,500 spent in categories that rotate each quarter (you must sign up each quarter, but that's a quick and easy click of a button). Beyond that you'll earn 1% back on all your other purchases and on your purchases above the quarterly cap. If you do the math, maxing out the earning in the 5% categories in a given quarter is worth $75 cash back (5% of $1,500 spent). If you do that for each of the four quarters during your first year, you’ll earn $300 cash back in just that rewards earning alone – and that will become $600 cash back after you first year thanks to the Cashback Match bonus.
One reminder: balance transfers do not earn rewards and therefore won’t count toward your Cashback Match total.
All this and there's no annual fee or foreign transaction fees to worry about eating into those sweet rewards.
Discover makes it easy to redeem your rewards as well. Instead of tracking a convoluted points system, you can use Discover's website to watch your cash-back bonus balance grow. You can redeem rewards in any amount for statement credit, an electronic deposit to your bank account or even donations to select charities. Discover also maintains a list of merchants with which you can use your rewards to pay for purchases. In some cases, you can also redeem rewards for gift cards or eCertificates with select Discover partners.
As with other rotating category cash-back credit cards, Discover it® Balance Transfer requires you to use a bit of strategy to reap the full benefits of the card, and you have to remember to sign up each quarter to take advantage of the bonus. Though Discover posts the quarterly cash back categories ahead of time, if you're not someone who wants to keep up with using your card in the quarterly bonus categories, you instead might want to consider a flat-rate credit card.
Since you're looking at a balance transfer credit card, the other, perhaps more important downside is that you will pay a balance transfer fee with this card: 3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*. It isn't at all out of line with what you’re likely to find on other cards, but it is something to keep in mind. That said, if you have a balance on one card that's racking up interest charges each month, even paying that fee likely means you'll come out ahead.
Discover it® Balance Transfer vs. Discover it® Cash Back
These cards are identical in terms of their rewards offering and the Cashback Match bonus opportunity. Where they differ is in the intro 0% APR department.
As we’ve already discussed, Discover it® Balance Transfer offers you an intro 18 months 0% APR on balance transfers and an intro 0% APR for six months on purchases (then, 11.99% - 22.99% Variable APR).
Discover it® Cash Back, on the other hand, offers an introductory 0% APR for 14 months on BOTH balance transfers and purchases (then, 11.99% - 22.99% Variable APR).
Your decision could come down to whether you have a balance to transfer and need the extra time offered by the balance transfer version of this card in order to pay it off without interest; however, it’s important to keep in mind that balance transfers don’t earn rewards.
If you have a purchase you’re looking to make, you could earn rewards on it by putting it on Discover it® Cash Back and then you could still take advantage of the intro 14 months 0% APR on purchases to pay it off. Sure, there’s some strategy involved here, but when the cards are this similar, it’s going to take some critical thinking about your finances and options to make the best decision.
Discover it® Balance Transfer vs. Capital One Quicksilver Cash Rewards Credit Card
Let's get this out of the way first: The Capital One Quicksilver Cash Rewards Credit Card offers a shorter intro balance transfer 0% period at 15 months, BUT its intro 0% APR on purchases is longer at 15 months (after the intro periods, the APR jumps to 14.99% - 24.99% (Variable)). Basically, if you need a longer period to pay off an existing balance, Discover it® Balance Transfer card is likely better, but if you're looking to make a purchase and pay it off over time, the Capital One Quicksilver Cash Rewards Credit Card could be a better fit.
Neither card charges an annual fee or foreign transaction fees, but their reward structures are different. Instead of rotating categories like the Discover card offers, Capital One Quicksilver Cash Rewards Credit Card holders earn 1.5% cash back on every purchase without any caps or categories to think about. Plus, there’s a more traditional welcome offer as well: earn a $200 bonus when you spend $500 on purchases within the first three months.
If you're looking for a simple rewards earning structure and don't need the full 18 months to pay off a transferred balance, you might consider the Capital One Quicksilver Cash Rewards Credit Card.
Discover it® Balance Transfer vs. Citi Simplicity® Card
Unlike the Discover card, the Citi Simplicity® Card (Citi is a CardRatings advertiser) is a balance transfer credit card with no cash back rewards; however, if you’re in the market for a LONG balance transfer offer, this card could be the better choice.
With the Citi Simplicity® Card, cardholders can enjoy no annual fees, no late fees and no penalty rates ever. It also has a 0% intro APR on balance transfers for 21 months from date of first transfer (all transfers must be completed in the first four months) and for 12 months on purchases (then, 14.74% - 24.74% (Variable)). That’s as compared to the Discover card that offers an intro 18 months 0% APR for balance transfers and just six months for purchases (then, 11.99% - 22.99% Variable APR).
Though the Discover card does offer no late fees for the first missed payment, the Citi card might be a better option for those who consistently struggle to make their payments on time.
Discover it® Balance Transfer is a solid option for someone who needs a lengthy introductory 0% APR offer, but also wants the card to be a long-term, rewards earning champion in their wallet.