Is the Discover it Cash Back worth it?

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Earning rewards with the Discover it® Cash Back card never gets old. After activation, the card offers 5 percent cash back on rotating categories each quarter (up to $1,500 in purchases, then 1 percent), and chances are you’ll find some upcoming categories that mesh well with your spending habits.

Its rewards program works a bit differently compared to other card offerings, so you’ll want to be familiar with the rewards structure and other benefits before deciding if this cash back credit card is right for you.

What does the Discover it Cash Back offer?

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.

Rewards

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.

Discover offers a variety of ways to redeem your cash back. 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. Those options are available once you’ve earned as little as 1 cent.

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.

Rotating bonus categories

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. The categories are new each quarter, and you need to activate them before you can start earning the bonus cash back.

For January through March 2022, you can earn the bonus rate by spending at grocery stores (including Walmart Grocery Pickup and Delivery, but excluding wholesale clubs, Target or other Walmart purchases) and by paying for fitness club or gym memberships.

For April through June 2022, the bonus rewards apply to spending at gas stations and Target.

For July through September 2022, the bonus category is restaurants and PayPal.

Lastly, for October through December 2022, purchases at Amazon.com and spending with digital wallets like Apple Pay or Google Pay earn bonus rewards.

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.

Welcome offer

As a welcome bonus of sorts, Discover will match the cash back rewards you earn during 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 sign-up bonus 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, the Discover it Cash Back’s bonus varies in size depending on how much you use the card. If you don’t charge a large amount to your Discover it Cash Back in the first 12 months, you’ll still qualify for a match. 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 that other no-annual-fee credit cards don’t usually offer more than $200 in sign-up bonuses, this works out to a pretty generous reward.

Other benefits

Intro APR offers

The Discover it Cash Back offers an introductory 0 percent APR for 14 months on balance transfers. Note, though, it also charges an introductory balance transfer fee of 3 percent (up to 5 percent on future balance transfers, see terms). There’s also an introductory 0 percent APR on purchases for the first 14 months. Once the introductory APR period is up, the APR on both balance transfers and purchases is 11.99 percent to 22.99 percent, depending on your credit.

Referral bonus

Discover offers a bonus to cardmembers who successfully encourage their friends or family to open Discover credit card accounts. To qualify, you’ll need to share a link from Discover with the person you want to refer. If they follow the link to apply and are approved for a card by Dec. 31, 2021, both you and the other person can get a statement credit. Discover will let you know the size of the credit you’re eligible for, which may be between $50 and $100 per person you bring on board. Your referral offer will also tell you the maximum referral reward you can earn in a year.

Security 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 it to you for free.

Customer service and customization

Cardmembers 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.

Is the Discover it Cash Back worth it?

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, and offers a pretty solid Cashback Match welcome bonus.

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.

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 rotation categories but provides some travel benefits, too.

And if you’re planning to transfer a balance, there are other cards that will give you a longer introductory APR period. For example, the Discover it® Balance Transfer has the same rotating cash back rewards and Cashback Match bonus but offers a 0 percent introductory APR on balance transfers for 18 months (11.99 percent to 22.99 percent variable APR after).

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). Or, you could go with a card that offers a flat rewards rate on all purchases, like the Wells Fargo Active Cash℠ Card.