Discover it® Business Card review: An easy start for business beginners

If you’re a small-business owner looking for a user-friendly business rewards card, the Discover it® Business Card could be the perfect low-maintenance option.

The Discover business card is one of the rare company cards with no annual fee or foreign transaction fees, and though it lacks the arsenal of rewards and benefits of other premium credit cards, it’s a solid option for startups that don’t have specialized expenses.

Quick highlights

• Rewards rate: Unlimited 1.5 percent cash back on all purchases
• Welcome offer: All cash back earned in the first year is automatically matched
• Annual fee: $0
• Purchase intro APR: 0 percent for 12 months
• Balance transfer intro APR: N/A
• Regular APR: 12.99 percent to 20.99 percent variable APR

Current welcome offer

Like all other Discover credit cards, the Discover it Business Card will match the cash back you earn within your first 12 months.

This sign-up bonus isn’t the typical one that would come with a three-month time frame, but it could be more valuable depending on your spending. For example, the Bank of America® Business Advantage Cash Rewards Mastercard® credit card offers a $300 sign-up bonus after spending $3,000 in combined purchases in your first 90 days, but if you spend more than $1,667 per month, you’ll earn more with Discover’s Cashback Match.

Rewards rate

The Discover small business credit card is an excellent choice if you’re in the market for a streamlined rewards program. In fact, it’s the only Discover credit card that offers flat-rate cash back — possibly the easiest rewards style you’ll find.

How you earn

You’ll earn 1.5 percent cash back per dollar spent on all purchases. Discover may also occasionally send extra promotional offers (terms and limitations may apply) that could add more cash back to your pocket. Fortunately, you can have up to 50 employee cards that will all earn cash back, too.

This is a common flat rewards rate for business and personal cards alike. It’s the best match if your small business expenses fall outside normal bonus categories, such as travel or dining, or if you usually spend beyond bonus category spending caps. That said, you may be able to earn more cash back by considering another card with bonus categories to cover specific purchases. The choice will be dependent on the spending habits and needs of your personal business.

How to redeem

Your main cash back redemption options are either direct deposits to your bank account or a credit card statement credit (both starting at any amount) but you may also put your rewards toward gift cards (starting at $5) or charitable donations (starting at any amount). Cash back can also cover Amazon.com or PayPal purchases at the checkout screen.

Spending cash rewards on gift cards generally isn’t the most flexible rewards method, but Discover makes it a more appealing option since several partner gift cards add extra value to the balance.

Leaving aside the case-by-case monetary value added to gift card redemptions, Discover’s cash back is worth the same as any other card’s 1.5 percent cash back rate: 1.5 cents per dollar spent. Your cash back rewards also retain a 1:1 value when spent at checkout with Amazon.com and PayPal.

The downside to Discover cards, in general, is their bare-bones structures. Unfortunately, other than Discover’s award-winning customer service, there isn’t much to write home about when it comes to cardholder perks. Rather than offering a roster of shopping and travel features like other cards, Discover sells itself on providing ongoing value, solid security and quality customer service.

24/7 U.S.-based customer service

Leading credit card customer service has long been one of Discover’s advantages and has won it the No. 1 ranking for five of the past seven years in the coveted J.D. Power Credit Card Satisfaction Survey. The most recent survey has Discover taking the number two spot, just behind American Express.

Discover’s customer service perks include features like a Free FICO Credit Scorecard, recurring charges dashboard and year-end spending summary.

Account protection

All Discover cards offer standard security features like $0 liability for unauthorized transactions, account alerts and near-instant account locking with “Freeze It” via Discover’s mobile app. Where Discover goes above and beyond is its 24/7 fraud protection service and mobile app.

Instead of just monitoring your account history for fishy activity, Discover scours the deep web for your Social Security number to warn you if your personal data has been compromised. Credit bureaus and other third-party services can do this level of credit monitoring for you too, but Discover is one of the few issuers to throw this layer of security in for free. If there are any signs of fraud, Discover offers free, overnight card replacement.

 Business features

Unfortunately, the Discover it Business Card’s perks for business owners are a bit slim as well. You can easily download and import employee transactions into popular accounting programs (like Quicken, QuickBooks and Excel) from up to 50 free employee cards. The Discover Business Card’s employee cards also earn rewards and you can set specific credit limits to more easily manage employee spending.

The Discover it Business Card’s main draw by far is its low rates and fees. There are no annual, foreign transaction or over-limit fees to worry about with this card. Employee cards don’t carry a fee, either, and you won’t get hit with a penalty APR if you miss a payment deadline (the first late payment fee is waived and goes up to $40 after that).

If you’re just launching your business and you have big expenses on the horizon, the 0 percent introductory purchase APR will keep interest at bay for 12 months. After that, the card carries an ongoing APR of 12.99 percent to 20.99 percent variable, the low end of which is well below the current average interest rate. Unfortunately, the intro APR offer doesn’t cover balance transfers, and the card’s balance transfer fee clocks in slightly high at 5 percent.

Although this card’s perks aren’t very competitive, Discover cards are known for being accessible since they’re open to those with good credit. Since it’s a business card, the Discover it Business requirements call for excellent credit (a FICO score of 740 to 850) to apply. But, if you have sufficient credit and you own and manage 100 percent of a business that is older than one year, the Discover Business Card pre-approval page should show you have solid approval odds.

Another potential drawback worth considering is that Discover uses its own network, which enjoys less international acceptance compared to the two biggest networks, Visa and Mastercard. This factor may not be an issue for many travelers though, but as the February 2020 Nilson Report found that 99 percent of U.S. merchants take Discover, and over 48 million merchants across more than 190 countries also accept it.

If you’re concerned about any of these aspects, here are a few other no annual fee, cash back business cards to consider.

Discover it Business card vs. American Express Blue Business Cash™ Card

The Discover it Business card is fairly competitive alongside other notable business cards like the The American Express Blue Business Cash. Both have no annual fee, which is a nice plus in terms of affordability, but the two start to diverge in a few major ways that may affect which one you’d choose.

The Discover it Business will match all of the cash back you earn at the end of the first year, while the Amex Blue Business Cash does not offer a welcome bonus. Business owners who have a significant amount of total yearly spend may find more value in the Cashback Match offered by the Discover it Business at the end of the first year.

It’s also important to note that you’ll earn a higher rate of cash back with the Amex Blue Business Cash than the Discover it Business, at 2 percent back on all eligible purchases, but this 2 percent earning rate is capped at $50,000 per calendar year. Anything you spend over the $50,000 will earn you only 1 percent cash back, which is lower than the unlimited 1.5 percent flat-rate you’ll earn with the Discover it Business card. Big business budgets that may blow through the $50,000 annual spend may be better off with the Discover it Business.

Discover it Business card vs. Ink Business Unlimited® Credit Card

The Ink Business Unlimited credit card and the Discover it Business are even more competitive head-to-head, as both offer the same unlimited flat rewards rate for no annual fee and similar ongoing variable APRs. The Ink Business could edge out ahead slightly with its welcome offer of $900 bonus cash back when you spend $6,000 in the first 3 months. Unlike the Amex Blue Business Cash, you have more flexibility to use your cash back bonus with the Ink Business Unlimited on more redemption options like direct deposit. Just keep in mind that you’ll have to meet a high required spend in a shorter amount of time to reap the benefit.

You may have a slightly lower barrier of entry with the Ink Business Unlimited, since you can have good to excellent credit to feasibly be approved (a score ranging from 670 to 850 on the FICO scale) whereas you’ll need excellent credit for approval with the Discover it Business (740 to 850 on the FICO scale).

Both cards stack up the same on almost all features outside of the welcome bonus. Your reward earning potential won’t be capped and you’ll earn the same flat-rate of rewards on all purchases, you’ll get an intro APR on purchases with both cards, neither card offers an intro APR on balance transfers and the ongoing APRs on both cards are virtually the same. Your final decision between the two may come down to how soon you want to see your welcome offer come through and what issuer you prefer, Chase or Discover.

Best cards to pair with the Discover it Business Card

The best way to maximize your flat-rate cash back card is to couple it with another credit card that earns cash back in your biggest spending categories. For example, you could use a card like the Bank of America Business Advantage Cash Rewards card to rack up 3 percent cash back on business expenses like office supplies or travel (on up to $50,000 in combined 2 percent and 3 percent categories per year, then 1 percent).

The Business Advantage Cash Rewards card makes an especially good partner for the Discover Business Credit Card since its flexibility compliments the Discover card. You can swap your 3 percent category each month for whichever upcoming overhead cost you expect will be highest.

Overall, the Discover it Business Card is a valuable option if you prefer a straightforward flat-rate rewards card over a higher-maintenance credit card with more perks. Like other Discover cards, the cardholder benefits of the Discover business credit card take a back seat to the low, ongoing rates and fees, security features and customer service.

If your business calls for specialized spending and beefier benefits, a range of other business rewards cards can get you cash back — but possibly at a higher cost.