Discover it® Balance Transfer review: The most rewarding balance transfer card available
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Discover it® Balance Transfer Credit Card Overview
The Discover Balance Transfer card is one of the best balance transfer credit cards since it offers the same 18-month 0 percent intro balance transfer APR (11.99 percent to 22.99 percent variable APR thereafter) as several top transfer cards, but it still carries the same benefits you’ll find on any other Discover credit card: a solid rewards program, a first-year cash back match bonus offer, stellar customer service and some of the lowest rates and fees on the market.
Very few balance transfer cards provide a welcome offer—let alone ongoing rewards. The Discover it Balance Transfer not only delivers both, but it happens to offer some of the best promotions in its class. Granted, Discover cards only pack in minimal features and the card’s six-month 0 percent intro purchase APR (11.99 percent to 22.99 percent variable APR thereafter) is much weaker than that of many other zero-interest credit cards, but the issuer’s focus on value overcomes these two drawbacks to make transferring your balance to Discover a great option.
What are the pros and cons?
- The intro purchase APR is short for a balance transfer card, which works against this card’s rewards spending advantage
- Barebones features outside rewards (which isn’t uncommon for balance transfer cards)
- The rotating category rewards program requires tracking quarterly activation periods and spending limits
A deeper look into the current card offer
- Rewards rate:5 percent cash back after activation on rotating categories each quarter (up to $1,500 in quarterly purchases, then 1 percent), 1 percent for all other purchases
- Welcome offer: Automatic Cashback Match: All cash back earned in the first 12 months will be matched
- Annual fee: $0
- Purchase intro APR: 0 percent for the first six months
- Balance transfer intro APR: 0 percent for the first 18 months
- Regular APR: 11.99 percent to 22.99 percent variable
Potentially the best balance transfer card welcome offer
All cash back you earn within your first 12 months will be matched by Discover, which means all your first-year rewards will essentially be doubled.
Although Discover’s unique Cashback Match offer isn’t the traditional, upfront sign-up bonus you’d find on other no annual fee cards, it’s hard to find a balance transfer card with a first-year cash bonus to begin with. In fact, the only major example is the BankAmericard® credit card, which awards cardholders a $100 statement credit after spending $1,000 in purchases within their first 90 days.
The Discover it Balance Transfer card’s welcome offer will likely be much more rewarding since you’d only need to spend about $167 per month across your 5 percent rotating categories (after activation, then 1 percent) to get that same $100 matched. Maximizing your $1,500 quarterly categories will earn you three times that, $300, that will then be matched at the end of your first year for a total of $600 via cash back match.
Out of Discover’s two cash back structures, the Discover it Balance Transfer shares the same rotating category cash rewards as the issuer’s flagship card, the Discover it® Cash Back. Its unabbreviated rewards rate is certainly impressive for a balance transfer card, but keep in mind that it’ll take a little elbow grease to maximize your rotating categories—which could be hard if you’ve reduced your spending to pay off your balance.
How you earn
You’ll earn 5 percent cash back on each dollar you spend on purchases that fall within your 5 percent rotating categories and all other purchases will earn 1 percent cash back. However, you’ll have to remember to activate your bonus categories each quarter and stay within your bonus categories’ $1,500 quarterly spending limit in order to earn 5 percent. Otherwise, you’ll only earn 1 percent back.
Fortunately, Discover has one of the more predictable issuer calendars since each quarter’s categories typically remain the same year-to-year (for the most part) and are announced the previous year. Currently, you’ll earn the rotating cash back rate on purchases with select online retailers. All three are major merchants, which makes this quarter’s category easy to maximize if you place your grocery orders and holiday shop online.
Here are all of the currently announced rotating categories in Discover’s 2021 Cash Back calendar:
- Q1 (January through March): Grocery stores, Walgreens and CVS
- Q2 (April through June): Gas stations, wholesale clubs and select streaming services
- Q3 (July through September): Restaurants and PayPal
- Q4 (October through December): Amazon.com, Walmart.com and Target.com
How to redeem
Discover provides a good variety of redemption options for your rewards. You can receive cash back in the form of:
- An electronic direct deposit to an eligible bank account
- A statement credit
- A gift card
- A charitable donation
- A payment toward Amazon.com or PayPal.com purchases
There’s no minimum rewards balance you need to redeem and you can redeem at any time, unless you want your rewards as a gift card. Gift cards start at $5 and go up to $200 in value (redeemed in increments of $5), depending on the partner merchant. Your cash back also won’t expire for the life of your account.
How much are the rewards worth?
Like with other cash back programs, your Discover rewards are worth 1 cent per percentage point of the cash back rate. That means you’ll pocket more cents per dollar spent on bonus category purchases and 1 cent per dollar on all other purchases.
However, Discover is one of the rare issuers that makes redeeming for gift cards a more valuable option than cash back in some cases. Depending on the partner, each gift card you redeem for may have 5 percent to 20 percent more value added to the balance. So, if you know you’re going to spend all your cash back at one partner merchant (like a restaurant or retailer on Discover’s gift card catalog), a gift card may stretch your cash rewards a little further.
Other cardholder perks
No-annual-fee cards usually dial back on extra benefits—except for Chase credit cards—but Discover cards are bare-bones even by those standards. Instead, Discover trims the fat in order to focus on value through low costs, account protections and top-notch customer service.
On top of standard security features, like $0 fraud liability for unauthorized purchases and account alerts, Discover’s free Identity Alerts program is a credit monitoring service that scours the dark web for your personal information and Social Security number, and immediately notifies you if your data has been compromised or if there are any fishy changes to your Experian credit report.
That’s pretty comprehensive coverage for a free issuer-based service, which pairs nicely with Discover’s Freeze it in-app feature. Freeze it allows you control to freeze and reactivate your credit card account whenever and for however long you’d like. This lets you act quickly to prevent any new purchases, cash advances and balance transfers without having to call and work it out with the issuer.
Award-winning customer service
Discover’s customer service provides helpful free overnight shipping to replace lost cards, free FICO score access, a year-end spending summary and a recurring charges dashboard, but it’s notable for having 100 percent U.S.-based, 24/7 customer service that consistently ranks above other national issuers. In fact, Discover just ranked second in the recent 2021 J.D. Power U.S. Credit Card Satisfaction Study—behind American Express by just one point on a 1,000-point scale (837 versus 838). Many customers may find their credit card issuers hard to deal with, but Discover has supported its reputation by obtaining the J.D. Power customer satisfaction survey’s top rank for five of the past seven years.
Rates and Fees
If you’re on the hunt for a balance transfer card with enough ongoing value to hold onto after paying your debt, it’s hard to do much better than the Discover it Balance Transfer. You’ll never have to worry about paying an annual fee, penalty APR or a late fee on your first late payment (up to $40 after that). Plus, it’s also an excellent choice if you plan to earn rewards while traveling abroad as it charges no foreign transaction fees.
The card’s 18-month 0 percent intro balance transfer APR is longer than any other Discover card’s, and it’s one of the longest zero-interest periods you’ll find among many reward cards with zero-interest periods (11.99 percent to 22.99 percent variable APR thereafter). You’ll face a 3 percent intro balance transfer fee (up to 5 percent on future transfers, see terms), but that’s a standard rate to expect.
The big drawback is that the Discover it Balance Transfer card’s six-month 0 percent intro APR period for purchases is much shorter than the one it offers for balance transfers. While many balance transfer cards have matching purchase and balance transfer intro APR offers, a shorter purchase intro APR isn’t too big of a deal since it’s the same length as before the card’s relaunch and the 11.99 percent to 22.99 percent (variable) ongoing APR makes up for it. In fact, 11.99 percent is lower than you could get with most balance transfer cards and is far below the current average interest rate.
How the Discover it® Balance Transfer compares to other balance transfer cards
Although the Discover it Balance Transfer has a leg up over many rewards cards with intro APR periods—plus a vast number of balance transfer-oriented cards when it comes to ongoing value—its intro APR lengths may not give you as much breathing room as other cards’ offers may. For example, the newly launched Wells Fargo Reflect℠ Card can shield both your purchases and balance transfers for up to 21 months (then a 12.99 percent to 24.99 percent variable APR), extended from its base 18 months if you continue making minimum payments on time throughout that offer.
Deciding against a card with rewards, a lower interest rate and an upfront first-year cash back offer for another card solely focused on zero-interest may be wiser if you’ll treat your balance transfer card as a temporary steppingstone to clear your card debt. However, the Discover it Balance Transfer and these alternative cards could be better all-around picks if you’d rather have more long-term utility from your next balance transfer card.
Discover it Balance Transfer vs. Citi® Double Cash Card
The Citi Double Cash Card is one of the few credit cards with an 18-month 0 percent intro APR on balance transfers to earn substantial rewards other than the Discover it Balance Transfer. The Double Cash card rakes in up to 2 percent unlimited cash back on all purchases; you’ll get 1 percent when you purchase and another 1 percent once you pay the purchase off. This rewards scheme could make it a wiser option than the Discover it Balance Transfer if rotating categories are a bit too hands-on for you, or if you plan to pair it with other Citi credit cards.
However, the Discover it Balance Transfer card does have a few advantages over the Double Cash. First and foremost, the Citi Double Cash doesn’t offer an intro APR for purchases and its 13.99 percent to 23.99 percent variable APR is a bit higher than the Discover card’s ongoing APR. If you need a longer intro APR for balance transfers and a slightly longer period for purchases (but don’t mind sacrificing rewards to settle your balance), the Citi Simplicity® Card or the Citi® Diamond Preferred® Card may be better choices.
It will also be easier to earn more cash back with the Discover it Balance Transfer card if you plan to maximize your rewards spending after paying off your balance. Based on the $15,900 average yearly spend and Bureau of Labor Statistics data we use to calculate our review scores, the Discover it Balance Transfer card would earn around $399 in annual cash back per year if you were able to make the most of the card’s bonus categories (that’s $300 or $75 per quarter in cash back earned by spending $6,000 on eligible purchases in the card’s rotating bonus categories, plus $99 earned by spending $9,900 on other purchases). The Citi Double Cash Card, meanwhile, would earn $318 if you charged and paid off $15,900 in a year. It’s also worth noting that the Citi Double Cash charges a 3 percent foreign transaction fee if you spend abroad, which will eat into any rewards you’d earn.
Discover it Balance Transfer vs. BankAmericard® credit card
The two biggest reasons to consider the non-rewards-earning BankAmericard over the Discover it Balance Transfer are its lengthier intro APR offers and upfront sign-up bonus. Keeping interest at bay for a year and a half is to be expected for a card designed specifically for balance transfers, but the BankAmericard’s 18-billing cycle 0 percent intro APR on purchases keeps you from worrying about snowballing interest on any further spending while your 0 percent intro balance transfer APR (on transfers made in the first 60 days) for 18 billing cycles shields your consolidated balance. Plus, the BankAmericard’s ongoing 12.99 percent to 22.99 percent (variable) APR is barely higher than the Discover it Balance Transfer card’s interest rate.
Earning a $100 statement credit after putting $1,000 of purchases on the BankAmericard within your first 90 days might be more advantageous for some cardholders than waiting a year for Discover’s potentially higher cash back match payday. A quick $100 credit could cover the 3 percent balance transfer fee (minimum of $10) for cardholders that transferred a balance of $3,333 or less to their BankAmericard.
Best cards to pair with this card
Your primary focus should be paying off your credit card debt after transferring your balance, but there are a few cash back cards worth considering once that’s handled. Discover cards don’t necessarily pair very well with each other, so a card from another issuer with rewards that will cover your biggest expenses outside Discover’s rotating bonus categories would be a smart choice.
A flat-rate cash back card would be an effortless way to earn boosted rewards on all purchases outside Discover’s cash back calendar or your categories’ $1,500 quarterly spending limit. The Wells Fargo Active Cash℠ Card would be excellent for this job since it squeezes unlimited 2 percent cash rewards on purchases.
Bankrate’s Take — Is the Discover it Balance Transfer card worth it?
The Discover it Balance Transfer card is undoubtedly one of the best balance transfer cards on the market.
Since they typically don’t offer much value beyond their lengthy introductory zero-interest periods, balance transfer cards often have a hard time earning their keep after the intro APR ends—but the Discover it Balance Transfer card doesn’t have this problem. It translates beloved rewards from the Discover it Cash Back card into the balance transfer world and shores up that ongoing value with the issuer’s signature low costs and first-year cash back match bonus. Its short six-month intro purchase APR might not be the strongest, but the Discover it Balance Transfer’s well-rounded features make it one of the best options you’ll find for a balance transfer.