Is the Discover it Cash Back worth it?

Earning rewards with the Discover it® Cash Back never gets old, and that’s partly because the card’s bonus categories can be different from one month to the next. The fact is, this cash back credit card offers 5 percent cash back on activated rotating categories each quarter (up to $1,500 in quarterly purchases, then 1 percent), and chances are you’ll find some upcoming categories that will mesh well with your spending habits.

While the rewards program tied to the Discover it® Cash Back works a bit differently compared to other cards’ offerings, it can be fun and exciting to change up your rewards game every three months. That said, you’ll want to learn all you can about the rewards structure and other benefits before you decide if this cash back credit card is right for you.

When is the Discover it® Cash Back worth it?

As the name suggests, the Discover it® Cash Back’s highest-value perks center on cash rewards. But this rewards credit card also offers some additional benefits.

Here’s a rundown of all the instances where signing up for this card makes a lot of sense.

You want to earn 5 percent back in popular spending categories

The Discover it® Cash Back grants 5 percent back in different bonus categories each quarter after activation, up to a cap of $1,500 (then 1 percent), and 1 percent back on all other non-category purchases. While the Discover cash back calendar can be different from one month to the next, categories commonly include options like gas, grocery stores, digital wallets and Amazon.com

The rotating cash back categories are where the Discover it® Cash Back really shines, and if you take full advantage of them, shopping with this card can be very lucrative. That said, you won’t earn heightened rewards in bonus categories with the Discover it® Cash Back unless you activate this bonus feature on your card each quarter. Fortunately, you can easily activate your bonus categories on your credit card’s online account page.

Spending the full $1,500 that’s eligible each quarter will net you $300 in cash back annually from the rotating categories alone. Few cash back cards offer more than 5 percent back in so many broad categories, so the Discover it® Cash Back’s bonus rewards are hard to beat.

You want flexibility when it comes to redemptions

Discover also offers a variety of ways to redeem your cash back, which ensures you’ll never be “stuck” with rewards that are hard to use. You can get a statement credit, have the cash deposited in a checking or savings account, spend it with a participating merchant or donate it to charity.

You can also choose from electronic or physical gift cards, although you’ll need to meet a higher minimum redemption amount. The gift cards come in denominations of $5 or more but often cost a bit less than their face value. Thus, your rewards will go even further if you redeem them for gift cards with Discover’s partner merchants.

Further, your rewards never expire. If your account is inactive for 18 months or is closed, Discover will credit the account or send you a check for any rewards you haven’t yet redeemed.

Having your rewards doubled entices you

If you need more reasons to love this card, you should know that Discover will match the cash back rewards you earn at the end of your first year of using the card (also known as Cashback Match™). This applies to rewards that are processed during the first 12 billing periods or 365 days from account opening (whichever is longer), so be aware that purchases you make right before that first year is up may not qualify for the match if they aren’t processed in time. Rewards are matched at a 1:1 rate.

This offer is considerably more flexible than a typical credit card welcome offer and potentially more valuable, too. While several other cards, such as the Chase Sapphire Preferred® Card and the Bank of America® Customized Cash Rewards credit card, give a set bonus to cardholders who meet a spending threshold within the first three months after account opening, this card’s bonus varies in size depending on how much you use the card. And if you collect a lot of cash back during the first year, your bonus cash could work out to a sizable sum.

For example, if you meet the $1,500 maximum spend in each quarter’s rotating bonus category, plus charge $5,000 in other spending over the course of the year, you would earn $350 in cash back. Then, the Cashback Match™ welcome offer would earn you another $350 at the end of the year. Given the fact other no-annual-fee credit cards typically don’t offer more than $200 in sign-up bonuses, this works out to a pretty generous reward.

Keeping costs down is your priority

Another reason to consider the Discover it® Cash Back is its lack of fees. This card comes with no annual fee for starters, and it doesn’t charge foreign transaction fees if you use it for purchases abroad.

As an added bonus, you’ll get a 0 percent intro APR on purchases and balance transfers for 15 months from account opening (followed by a variable APR of 17.24% – 28.24%). This benefit can be useful and money-saving if you have a large purchase coming up that you want to pay down over time.

You like the card’s other features

If you opt in, Discover will provide credit report monitoring and send you alerts if your Social Security number shows up on a website that isn’t visible to search engines.

Discover also allows you to freeze your card so that new purchases, cash advances or balance transfers can’t post to it — although some charges (such as recurring payments and account fees) will still go through. If your card is lost or stolen, you aren’t on the hook for any fraudulent charges thanks to Discover’s $0 fraud liability guarantee. And if you need a new card, Discover will overnight one to you for free.

Cardmembers also have access to 24/7 customer service, either by sending an online message or calling the 800 number. Additionally, Discover lets you customize your card’s appearance with one of 25 available designs.

Read over the Discover it® Cash Back card benefits guide to learn more about this card’s additional perks and features.

When is the Discover it® Cash Back not worth it?

While the benefits listed above are valid reasons to sign up, there are still scenarios where the Discover it® Cash Back may not be the best card out there for your needs. Examples are below.

You want to earn more than 1 percent back on regular spending

One of the biggest downsides of the Discover it® Cash Back is the fact it only offers 1 percent back on regular, non-bonus spending. This can hold you back if you’re trying to maximize rewards on all your spending and bills, and not just in categories that happen to qualify for bonus rewards in any given quarter.

That said, many people pair this rewards credit card with another one that earns a higher rate on regular spending. For example, you could always pair it with the Wells Fargo Active Cash® Card in order to earn 2 percent back on all purchases with no annual fee.

You want a card with travel perks

The Discover it® Cash Back won’t meet your needs if you’re looking for travel protections. For perks like trip cancellation insurance and rental car collision coverage, you may want to pair it with a card like the Chase Freedom Flex℠*, which also awards cash back in rotating categories but provides some travel benefits, too.

If you want luxury travel benefits like airport lounge access or annual travel credits, on the other hand, you’ll want to look at premium travel credit cards that charge annual fees.

Consolidating high interest debt is your main objective

If you’re planning to transfer a balance, there are other cards that will give you a longer introductory APR period. For example, the Wells Fargo Reflect® Card gives you a 0 percent intro APR on purchases and balance transfers for 21 months (followed by a variable APR of 18.24%, 24.74%, or 29.99%). There’s no annual fee for this card either, although only balance transfers made within 120 days of account opening qualify for the introductory rate. A 5 percent (minimum $5) balance transfer fee also applies.

Should you get the Discover it® Cash Back?

The Discover it® Cash Back will likely be worth it for people who can change up their spending each quarter to maximize their bonus category earnings. Considering Discover announces its categories well in advance, many will find this doable. Further, this card has no annual fee, so you don’t need to worry about the cost of membership outweighing the rewards.

That said, the Discover it® Cash Back may not be the right fit for everyone. It requires activating the rotating categories each quarter, and if you forget to do this, you’ll miss out on the card’s most valuable rewards. While it’s relatively easy to activate the bonus categories online, on the mobile app or over the phone, it still takes a little bit of effort.

Not only that, but there are consumers who want to earn more than 1 percent back on regular spending and bills. There are also those who want more perks and features with their card, especially among credit card users who travel all the time.

The bottom line

The Discover it® Cash Back is best known for its rotating bonus categories and Cashback Match™ welcome offer. But if you’d prefer rewards that don’t change from season to season, you might be better served by a Discover card with stable bonus categories — such as the Discover it® Chrome. This card gets you 2 percent back at gas stations and restaurants (on up to $1,000 in combined purchases per quarter, then 1 percent), as well as 1 percent back on all other spending. You’ll also get the chance to have all the cash back you earned matched after the first year. Of course, you could also go with a card that offers a flat rewards rate on purchases, like the Wells Fargo Active Cash.

*The information about the Chase Freedom Flex℠ has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.