Discover it® Cash Back Review

Discover it® Cash Back Essentials

When Discover it® Cash Back says it will match all your cash back accrued during your first year, it means that new cardholders could earn a staggering amount of cash back on purchases made within the rotating 5% cash-back categories in their first year (up to the quarterly maximum of $1,500 each time you activate). Think about it: $200 in cash back will automatically become $400.

Furthermore, Discover releases its full quarterly category list at the start of the year, making it easy for you to see whether the bonus categories will match your spending habits. 2019 categories include: January-March grocery stores; April-June 2019: gas stations, Uber and Lyft; July-September 2019: Restaurants and PayPal; October-December: Amazon.com, Target and Walmart.com.

That matched cash back in bonus categories is in addition to the match Discover is offering for all the purchases you make in the first year in regular, non-bonus categories. With a bit of strategy and some regular credit card usage, you could reap some serious cash back, particularly during your first year with the Discover it® Cash Back card.

In addition to the intro offer and with a fresh look and a focus on customer service, Discover it® Cash Back has redefined itself as a serious contender in the crowded cash-back credit card field (which the original Discover card invented in the 1980s). With no annual fee, no foreign transaction fees, and amnesty for many of the situations that cause most banks to hike their rates and fees, Discover it® Cash Back has the potential to set a new standard for American rewards credit cards.

What Our Editors Like Best About Discover it® Cash Back

It's always nice to know that using your credit card is earning you rewards, and the Discover it® Cash Back does earn you rewards every time you swipe – at least 1% on all your purchases.

When you sign up and spend in one of the rotating categories each quarter, however, you boost your earning to 5% back on those purchases up to $1,500 spent.

When the time comes, Discover it® Cash Back then offers easy redemption of your cash-back rewards. You can use your points as credit toward Amazon.com purchases or to request immediate credit card statement credit through Discover's website, among several other options.

Additionally, if you're the type who wants maximum rewards and is willing to think through the strategy a bit, Discover it® Cash Back pairs well in your wallet with a flat-rate, no annual fee credit card like Chase Freedom Unlimited®. How does it pair well? Here's the deal:

• Use your Discover it® Cash Back to earn 5% cash back on all your purchases in the bonus categories each quarter (up to the quarterly maximum of %1,500 each time you active).
• Use your Chase Freedom Unlimited® to earn 3% back on up to $20,000 spent in your first year as a cardholder and then an unlimited 1.5% cash back on every purchase going forward – it's automatic. That's at least a half-percent more than you'd earn using Discover it® Cash Back.
• Remember that Discover it® Cash Back matches all your cash back in the first year; that means you'll want to employ a strategy like that mentioned in the bullets above AFTER your first year of card membership. That's because the match effectively means you can earn at least 2% back on your purchases (and up to 10% back when you're talking about the bonus categories) with your Discover card for that first year.

Potential Downsides of Discover it® Cash Back

As is the case with any rotating categories cash-back card, you have to be willing to use a bit of strategy if you want to realize the full potential rewards of this card. If you're not someone who wants to keep up with using your card in the quarterly bonus categories, you'd likely earn more rewards with a flat-rate credit card like the Capital One® Quicksilver® Cash Rewards Credit Card (then, 16.24% - 26.24% (Variable)) that offers a flat 1.5% back on all your purchases. Or, if you're wanting a little strategy, but not one that changes quarterly, you might consider a tiered cash-back rewards card like the Blue Cash Everyday® Card from American Express that offers 3% back at U.S. supermarkets (up to $6,000 spent annually, then 1%), 2% back at U.S. gas stations and 1% on your other purchases (American Express is a CardRatings advertiser. Terms apply.)

How Discover it® Cash Back Compares to Other Cash-back Credit Cards

Discover it® Cash Back vs. Chase Freedom®

Discover it® Cash Back offers a nearly identical rewards structure to that of its closest competitor, the Chase Freedom® card. Neither has an annual fee, so it could be a good strategy to carry both cards and cash in on the two sets of rotating bonus categories when you sign up each quarter. Bargain hunters could maximize their 5% rewards on both cards with just a little extra strategic planning. Chase, though, has not historically announced its full year of rotating categories up front, so you'll have to rely on historical categories to make a decision about this one.

Chase Freedom® offers its rewards in the form of Chase Ultimate Rewards® points, which are transferable among different Chase products. If you already have a Chase Ultimate Rewards®-earning card in your wallet, like Chase Sapphire Preferred® Card or Chase Freedom Unlimited®, for instance, it could pay to stick within the Chase family.

Discover it® Cash Back vs. Citi^® Double Cash Card - 18 month BT offer (Citi is a CardRatings advertiser)

The Citi^® Double Cash Card - 18 month BT offer has simplicity going for it in that cardholders receive 1% cash back when they make a purchase and another 1% back when they pay their bill (at least the minimum balance due each month, on time). That means cardholders stand to make 2% cash back on all their purchases, which is a better return then Discover it® Cash Back offers in its non-bonus categories. Furthermore, the Citi card offers you and introductory 18 months of no interest on balance transfers for new cardholders (after the intro period, the interest rate goes to 15.74% - 25.74%* Variable), which could come in handy if you're needed to pay off some debt from another card.

For those who don't want to deal with rotating categories, the Citi^® Double Cash Card - 18 month BT offer could be a better option. Keep in mind, however, that the Citi^® Double Cash Card - 18 month BT offer does have a 3% foreign transaction fee, so if you plan to travel abroad the no-foreign-transaction-fee Discover it® Cash Back could be a better fit.

Discover it® Cash Back vs. Blue Cash Preferred® Card from American Express

If you're a big spender at supermarkets and gas stations, or a frequent commuter, the rewards offered by the Blue Cash Preferred® Card from American Express could add up for you more quickly than they would with Discover it® Cash Back. You earn 6% back at U.S. supermarkets (up to $6,000 spent annually, then 1%), 6% on select U.S. streaming services like Spotify and Netflix, 3% at U.S. gas stations and on transit, including taxis and train tickets, and 1% on everything else with the Blue Cash Preferred® Card from American Express Terms apply. That means it certainly tops the cash back offering of Discover it® Cash Back in the top two categories.

The Blue Cash Preferred® Card from American Express does come with an annual fee of $95, however, so you'll need to spend enough to offset it (Terms apply. See Rates and Fees.); whereas, Discover it® Cash Back is annual-fee-free.

Who Should Get This Card?

Discover it® Cash Back is a no-brainer for anyone who is willing to take a few minutes each quarter to sign up for the bonus categories and then spend strategically within those categories to maximize their rewards. With no annual fee, no foreign transaction fee and that awesome first-year matching cash back, it's a fantastic option for even the occasional credit card user.

Lastly, to add some fun to the decision-making surrounding a new credit card, Discover it® Cash Back gives cardholders the option to select their favorite card design from an array of eye-catching colors. Royal purple? Chocolate brown? Striking silver? In other words, this card can fit both your financial and personal style.

To see the rates and fees for the American Express cards mentioned in this post, please visit the following links: Blue Cash Everyday® Card from American Express (See Rates and Fees); Blue Cash Preferred® Card from American Express (See Rates and Fees).