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Finding the best cash back credit card can feel daunting. There are so many rewards credit cards out there to choose from, and with multiple issuers offering competitive rewards and benefits, it can be difficult to figure out the right card for you.
Discover offers several cash back credit cards, including the popular Discover it® Cash Back. If you want a card you can keep for the long haul, there are many reasons to consider it over all the others. Here are three reasons we love this card — and why you might love it, too.
1. Rotating rewards you can maximize
One major benefit of this card is the way it doles out rewards. When you sign up for the Discover it Cash Back, you earn 5 percent back on up to $1,500 spent in rotating categories each quarter (activation required), after which you earn 1 percent back. Note: The issuer has changed to releasing its featured bonus categories on its cash back calendar to once a quarter, rather than all at once like it did in the past.
Discover customers do have to activate the 5 percent categories each quarter in order to start earning rewards on them. If you’d like to maximize the card’s rotating categories, we recommend setting a calendar reminder to activate them at the start of each quarter. Once activated, it should be fairly manageable to fulfill the $1,500 spending cap, especially since Discover always includes categories consumers can easily utilize such as grocery stores, gas stations, Target and digital wallet purchases.
2. Cashback Match
Another reason to sign up for the Discover it Cash Back is its Cashback Match program. This program essentially doubles all the rewards you earn after the first year regardless of how much you spend and how much cash back you earn.
Let’s explore an example to see how many rewards the Cashback Match can potentially earn you. If you reach the spending cap of each quarter’s bonus categories of $1,500, you’ll earn $75 cash back every three months. You also spend an additional $1,000 on your card each month, which earns a total of $120 in 12 months. At the end of year one, you would have earned $420 in cash back rewards, which Discover would double to $840 with no extra work on your part.
For more clarity, the math is broken down in the following table:
|Discover it Cash Back rewards rate||Annual cash back rewards|
|5 percent on rotating bonus categories||$500 (spend per month) x 0.05 (5 percent cash back) x 12 months = $300|
|1 percent on all other purchases||$1,000 (spend per month) x 0.01 (1 percent cash back) x 12 months = $120|
3. Introductory APR offer
Though the Discover it Cash Back is mostly known for its rewards program, the card also has a decent intro APR offer for more than a year. New customers who sign up for this card get 0 percent APR on purchases and balance transfers for 15 months, followed by a variable APR of 16.24 percent to 27.24 percent.
This makes the Discover it Cash Back a great option if you want to pay down large purchases (like that new laundry machine or living room couch) without interest over time, or if you want to consolidate and pay down debt compiled from other high-interest cards.
Why you might consider another cash back credit card
The Discover it Cash Back is excellent by all standards, particularly as a card with no annual fee, but there are a few areas where it may fall short of other cards. In fact, the Discover it Cash Back is only worth it if you spend time and effort toward activating and maximizing its rotating bonus categories. If you don’t, you’ll find it difficult to experience the benefits with the card.
Also note that the Discover it Cash Back does not have a traditional sign-up bonus, which can be a bit of a drag. You do get your rewards essentially doubled at the end of the first year, but this is different from other cash back credit cards that offer $200 or more when you meet a minimum spending requirement in the first few months.
Compared to those cards, with more straightforward intro bonuses, the Discover it Cash Back requires more energy from the cardholder to earn a first-year bonus over $200. If you don’t want to go through the trouble, you should look for a card with a simpler welcome offer achievable with a spending goal.
Another thing to consider is that the length of its introductory APR offer isn’t as attractive as some other rewards cards. In fact, there are many cash back credit cards that give you a 0 percent intro APR on purchases or balance transfers for 18 months or longer. For instance, the Citi® Double Cash Card offers a 0 percent intro APR period for 18 months on balance transfers (after that, the variable APR will be 18.24 percent to 28.24 percent).
So if you have serious credit card debt that may take you longer than a few months to pay off (check out our balance transfer calculator to know exactly how long), we recommend looking into balance transfer credit cards instead. Some of those cards offer 0 percent APR for even longer than 18 months to give you more time to resolve your debt.
The bottom line
The Discover it Cash Back could be your dream card if you’re looking for 5 percent cash back without paying an annual fee — and you don’t mind organizing your purchases around rotating bonus categories in order to get it.
Regardless, there are many excellent cash back credit cards on the market today, but that doesn’t mean there is one “best” card for everyone. Some cards suit different kinds of needs better than others, which is why you should shop around and compare credit cards before you make your decision.