Discover it® Miles review: A simple card to simply skip

The American Express® Gold Card is an excellent travel rewards card to pair with Discover it® Miles, especially if you spend considerable money each month on dining out and groceries.

The Amex Gold card earns 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. It also earns 4X Membership Rewards® points per dollar spent at U.S. supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.

Although it has a $325 annual fee, the travel protections, perks, stellar welcome offer and ongoing rewards value should make it easy to offset the annual fee. Coupling it with a no annual fee card like the Discover it® Miles can fill gaps in your rewards strategy and take advantage of some elite benefits.

(See Rates & Fees for the American Express® Gold Card.)

If you don’t want to pay extra for travel perks, the Chase Freedom Unlimited® can be good to pair with the Discover it® Miles. You can earn 5 percent cash back on bookings made through Chase Travel℠ so you earn more on trips and vacations. Travel protections like trip cancellation and interruption insurance are also included on the card. 

However, a downside is the Freedom Unlimited’s 3 percent foreign transaction fee, so it may be better to use the Discover it® Miles abroad. 

If you want to avoid traditional travel miles, the Bank of America Travel Rewards credit card earns 3 points per $1 spent on travel purchases booked through the Bank of America Travel Center and unlimited 1.5X points for every dollar spent. 

Rewards can be redeemed for travel purchase credits, gift cards or cash. The Bank of America card also comes with Visa Signature benefits and you can boost your rewards rate by up to 75 percent as a qualifying Bank of America Preferred Rewards® member. Depending on which tier you qualify for in the Preferred Rewards program, this card could boast a higher flat rate than the Discover it® Miles and its competitors.

If you bank with Bank of America, you’ll certainly want to reap the benefits of the Preferred Rewards membership as it can substantially boost how many points you’ll earn.

The Chase Sapphire Preferred card is one of the best beginner travel cards thanks to its elevated rewards rate for travel purchases, 25 percent value boost to Chase Travel℠ redemptions, ability to transfer points to airline and hotel partners and the card’s impressive list of additional perks. Although it comes with a $95 annual fee, it should be easy to offset by earning points or taking advantage of perks like baggage delay insurance and trip cancellation insurance.

Chase points are worth 1 cent each when redeemed for cash, meaning you’ll retain point value if you don’t have a trip coming up but still want to redeem your rewards. However, you can maximize the value if you transfer your points to partnering airline or hotel chains. Bankrate estimates you can get a value of around 2.0 cents per point. 

You might steer toward the Discover it® Miles if you want to use your card for purchases outside the travel category to earn a decent flat rate, but the Sapphire Preferred card’s elevated rewards rate will quickly outpace the Discover it® Miles’ flat rate on all purchases.

People interested in the Discover it® Miles should have good to excellent credit (a FICO Score between 670 and 850) for the best odds for approval. 

You redeem Discover it® Miles rewards as a statement credit to pay for travel purchases like hotel rooms, rental cars, rideshares and more. You could also redeem for cash back, giving you a little extra cushion in your savings to spend on anything you want while you travel.

According to Bankrate’s latest evaluations, Discover points are worth on average 1.0 cents. This means that 100 Discover Miles earned would be worth about $1. So, if you want to book a $350 flight, you would have to earn 35,000 Discover Miles.

The primary criteria for a rewards or cash back card’s rating is its rewards value. This includes the card’s average rewards rate, estimated annual rewards earnings, welcome bonus value and reward redemption value.

To estimate a card’s average annual rewards earnings, we first calculate its average rewards rate based on how much it earns in different bonus categories and how closely its categories align with the average person’s spending habits, according to the Bureau of Labor Statistics (BLS).

The most recent BLS data estimates average total spending in 2022 was $72,967 per consumer. We then narrow our focus to which purchases are likely to be put on a credit card and earn rewards, subtracting expenditures like housing, vehicle purchases and education. This gives us a total “chargeable” annual spend of around $22,500.  

Some of the major spending categories that contribute towards the annual spend include:

• Groceries: $5,700
• Dining out: $3,600
• Entertainment: $2,400
• Gas: $3,100
• Apparel and services: $1,900

Using this data, we assign a weighting to each of a card’s bonus categories. For example, a card’s grocery rewards rate receives a 22 percent weighting based on how much of the average person’s budget is spent on groceries. We also estimate the redemption value of points or miles from various issuer, airline and hotel rewards programs.

This weighting and rewards valuation allows us to estimate a card’s average annual rewards earnings — how many points or miles you’d earn with a given card if your spending was about average and you used the card for all of your purchases, as well as what those points are worth. We also use point valuations to determine a card’s welcome bonus value.

With these calculations complete, we assign each card a score based on how its average rewards earnings, welcome bonus value, rewards rate and redemption value stack up against other rewards cards.

We also rate cards based on how much it costs to keep them in your wallet or carry a balance. 

To start, each rewards or cash back card is scored based on whether it offers an intro APR and how its ongoing APR compares to the rates available on other rewards or cash back cards. 

We also score each card based on how its annual fee influences its overall value. 

We consider a card’s annual fee in two ways — how it ranks relative to the fees you’ll find on other cards in the category and how it impacts a card’s overall rewards value. Cards with an annual fee will always be at a slight disadvantage in our scoring system since annual fees inherently cut into your rewards value, but if a card offers terrific value via its ongoing rewards and perks, it can earn a high score even if it carries a high annual fee. 

With this in mind, we rate a card based primarily on how its ongoing rewards value and ongoing perk value (such as annual credits or bonuses) stack up against other cards in the category when you subtract its annual fee.

We rate each card’s flexibility based on the restrictions it imposes on earning and redeeming rewards and factor this rating into a card’s overall score. 

Flexibility factors include whether a card only allows you to earn a high rewards rate on a small amount of spending or requires you to meet a certain earning threshold before you can redeem rewards. We also examine whether your points are worth less when you redeem for some options versus others and whether a card gives you the flexibility to transfer rewards to airline and hotel partners. 

We also score each card’s set of features – its perks and benefits — against five tiers of features to provide a rating. 

We break down these tiers as follows:

• Tier 1 has less than standard card features (an ultra-streamlined card that offers basic utility and next to nothing in the way of ancillary benefits. 
• Tier 2 includes the benefits you’d expect on standard Visa or Mastercard credit cards, such as free access to your credit score, car rental insurance and $0 liability for fraudulent charges. 
• Tier 3 includes “prime card” or better-than-average card features like cellphone insurance, lost luggage insurance, concierge services and purchase protection. 
• Tier 4 includes luxury features such as airport lounge access, elite status with an airline or hotel and credits for expedited security screening membership programs. 
• Tier 5 includes the sort of exemplary benefits you’ll find on top-tier luxury cards, such as high-value travel credits, cardholder memberships and other unique and valuable perks.