Best For Cash Back Category Variety
Discover it® Cash Back
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Cardholders that don’t mind a little elbow grease to make their rewards cards shine will find the Discover it® Cash Back is one of the best no-annual-fee credit cards for low rates and fees, cash back, first-year offers and customer service.
Earning cash back from your credit card is an easy way to save a little bit of money on your usual spending. But, in exchange for a bit more effort than a typical cash back card, the Discover it® Cash Back packs some of the highest rewards rates on various everyday expenses. You can earn 5 percent back on up to $1,500 in rotating category purchases each quarter when you activate the bonus category (then 1 percent) and 1 percent cash back on all other purchases.
Taking the time to activate your categories, track your spending and adjust your spending habits to the quarterly categories can make this card one of the best for each season’s most popular purchases.
Cardholders earn 5 percent cash back on up to $1,500 in purchases each quarter on rotating categories after activation, then 1 percent
Poses some of the lowest rates and fees on the market, including no annual fee, foreign transaction fees, penalty APR or fee on your first late payment (then up to $41)
The Cashback Match program could be the strongest welcome offer among no-annual-fee cash back cards since it essentially doubles all cash back earned at the end of the first year
Offers a solid 15-month 0 percent intro APR on purchases and balance transfers, then 16.74 percent to 27.74 percent variable APR.
Discover’s renowned J.D. Power credit card satisfaction survey track record makes it one of the best issuers for customer service
Rewards can be hit or miss depending on whether your spending aligns with the rotating categories
Cardholders can’t increase the value of rewards by transferring them to other loyalty programs
The rotating category rewards program requires quarterly activation and may be too complex for first-time rewards cardholders
The welcome offer for the Discover it® Cash Back is a bit different from the typical sign-up bonus other cards offer. Discover offers its Cashback Match program, which takes the total amount of cash back you accumulate at the end of your first year and matches it.
With this program, the size of your new cardholder bonus is up to you — the more you use your Discover it® Cash Back card, the bigger your bonus will be. By just maximizing your 5 percent categories’ $1,500 spending cap each quarter after activation, you will stack another $300 on top of the $300 you already earned, then 1 percent. That’s a worthwhile reward for your patience since it’s well above the usual $150 to $200 upfront welcome offer from many other no-annual-fee cash back cards.
Earning cash back with Discover does take a little effort, as you’ll need to keep track of the rotating bonus categories and enroll each quarter, but the bonus cash is well worth it.
You can earn 5 percent back on up to $1,500 in purchases in different categories each quarter based on Discover’s 5 percent cash back calendar. You must activate the bonus each quarter to take advantage of this rate. If you don’t activate a bonus category or exceed the $1,500 cap in a bonus category, you’ll earn just 1 percent cash back on your purchases. You’ll also earn 1 percent back on general purchases outside the quarterly bonus category.
In addition to the end of your first-year cash back match offer and the ongoing rewards, Discover offers a $50 to $100 referral bonus if you refer a friend to select Discover cards, including the Discover it® Cash Back. The maximum referral amount you can earn each year is stated in your referral offer, but, for reference, the total was previously limited to $500 or 10 referrals per year.
You can redeem your Discover rewards for cash back as an electronic direct deposit to your chosen account or as a statement credit to your card balance. You also have the option to use your rewards for gift cards (partner gift cards range from $5 to $200 in increments of $5), charitable donations to select charities or even payments toward Amazon.com.
To designate a method for redeeming cash back, visit your card account or call the customer service line at 1-800-347-2683.
Each cash back “cent” is worth an equivalent of 1 cent when you redeem it. For example, if you spent $1,500 buying gifts for your entire family from Amazon.com during the fourth quarter of 2022 after activating the bonus category, you could have earned $75 cash back on those purchases because they were into one of the 5 percent categories for that quarter (activation required, then 1 percent).
All reward options carry a 1:1 redemption rate, which isn’t always expected when it comes to Amazon.com reward payments and non-cash redemption choices. However, Discover is unique in how its partner gift cards sweeten the deal by adding an extra 5 percent to 20 percent value to the balance (depending on the merchant).
The Discover it® Cash Back's benefits are somewhat light beyond its cash back and minimal fees. If you rely on traditional perks like purchase and travel protections, perhaps consider other options since Discover has trimmed its card features to focus on its signature low-cost reward offerings.
Discover is well-known for its customer service and consistently ranks at or near the top of J.D. Power’s credit card customer satisfaction surveys. In fact, Discover ranked second overall in the most recent 2022 study, having previously won first place five times and tying for the top spot in 2014.
The issuer offers a 24/7 customer service line, free overnight shipping for card replacements and free FICO credit score access on each month’s statement.
If your card is ever lost or stolen, Discover can freeze any new purchases, transfers or cash advances on your account, protecting you from potential identity theft. Remember that some activity will still occur on your card, like prior recurring expenses (such as utility bills), returns, credits, delayed payments, account fees and interest.
If there are ever any unauthorized transactions or purchases on your card, you can rest assured with Discover’s $0 Fraud Liability benefit, meaning that you won’t be held accountable for those transactions.
For people who opt into this benefit, Discover can search the web and notify you if your Social Security number is found on the dark web or any malicious websites, giving you ample time to put protections around your identity.
The Discover it® Cash Back offers new account holders a 0 percent intro APR on purchases and balance transfers for the first 15 months after signing up. Once the intro period is over, the regular variable APR applies and ranges from 16.74 percent to 27.74 percent variable — which could be well below the average current interest rate, even for a low-interest card.
Only a few credit cards minimize their rates and fees to the extent Discover cards have. There’s no annual fee, no penalty APR for late payments and no penalty fee for the first time you make a late payment. Discover charges up to a $41 fee for all late payments after that.
There is also an intro balance transfer fee of 3 percent, up to 5 percent on future balance transfers (see terms). The cash advance APR is currently at 29.74 percent variable. Cash advance fees are either 5 percent of the amount or $10 for each cash advance, whichever is greater.
The Discover it® Cash Back is a frontrunner for first-year value with no annual fee. Thanks to Discover’s reward match offer, all the cash back you earn at the end of your first year is essentially doubled. This feature could make the Discover it® Cash Back card a significantly better option for first-year value than competing cards, depending on how much you spend.
However, keep in mind that you’ll only get 5 percent cash back on up to $6,000 across the whole year, which amounts to $300 back (you’ll earn 5 percent back on up to $1,500 in rotating category purchases each quarter when you activate the bonus category, then 1 percent).
|Benefits and costs||First-year value||Ongoing value (no welcome offers)|
|Yearly rewards*||+$399||+$399 (may change depending on announced quarterly categories and your personal spending)|
|Welcome offers||+$399 (matches first-year rewards)||—|
|Perks (of monetary value)||N/A||N/A|
*Based on our formula used to calculate each card’s average rewards rates and average ongoing rewards value, using Bureau of Labor Statistics spending data and an assumed $15,900 yearly spend over three years ($1,325 per month).
Around the Bankrate office, plenty of Discover it® Cash Back fans have found it valuable well beyond its honeymoon period. Robert Thorpe, one of our expert credit card editors, finds the Discover it® Cash Back fits in with his other credit cards, and he takes advantage of it for the impressive rewards rates on seasonal cash back categories.
I like that the card is versatile. I can sample earning 5 percent cash back in unique areas, such as purchases made with my digital wallet. I can also “rest” my Blue Cash Preferred® Card from American Express for three months and avoid going over that card’s $6,000 annual spending limit at U.S. supermarkets. And, thanks to the Cashback Match, this card effectively lets me earn at least 2 percent cash back for a year on all my general purchases.*
— Robert ThorpeBankrate editor
The Discover it® Cash Back is one of the top rotating category cards thanks to its low-cost terms, but you may earn more rewards and enjoy richer card features by selecting another card.
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Since the Discover it® chrome carries the same welcome offer and low fees, the Discover it® Cash Back versus Discover it® chrome debate boils down to reward consistency. The Discover it® chrome card may be a more manageable choice since you can rely on its 2 percent cash back at gas stations and restaurants, but that rate is limited to $1,000 in combined purchases per quarter across those categories (then 1 percent). All other purchases earn 1 percent, similar to the Discover it® Cash Back.
Although the Discover it® chrome seemingly offers steadier rewards, its categories’ spending cap limits the card’s cash back potential compared to the Discover it® Cash Back. Based on the budget from the first-year versus ongoing value table above, the Discover it® Cash Back would earn $399 per year while the Discover it® chrome card would total $205 per year. Remember that this significant rewards difference also affects your first-year cash back match bonus, meaning the Discover it® chrome card’s welcome offer is worth $194 less. So although the Discover it® chrome appears more reliable, the Discover it® Cash Back is a much more valuable card to have in your wallet.
Among rotating category cards, the Chase Freedom Flex℠ may be the best on the market. Choosing between the Discover it® Cash Back and the Freedom Flex may seem like a no-brainer thanks to the Flex card’s additional year-round 3 to 5 percent back categories, superior benefits (including fantastic travel insurance and World Elite Mastercard perks) and ability to improve reward value toward travel when paired with a Chase Sapphire card. Still, there are a few other elements at play you should consider.
The Freedom Flex has an equivalent 15-month 0 percent intro purchase and balance transfer APR (with an intro balance transfer fee of $5 or 3 percent of the amount of each transfer, whichever is greater in the first 60 days). Still, the Discover it® Cash Back has minimal fees, including a slightly lower interest rate: 16.74 percent to 27.74 percent (variable APR) versus the Freedom Flex’s 19.49 percent to 28.24 percent (variable APR).
Unlike the Freedom Flex, the Discover it® Cash Back doesn’t charge foreign transaction fees, a penalty APR or a first-time late payment fee (up to $41 thereafter). It’s also worth noting that Chase only announces its 5 percent quarterly categories a month or so ahead of time, and in 2023, Discover will do the same. Discover’s Cashback Match offer also has the potential to be a lot more rewarding than the Freedom Flex’s $200 cash sign-up bonus (cardholders must spend $500 within the first three months).
Granted, the Chase Freedom Flex will provide more value for most cardholders — especially if you already have a Chase rewards card. However, the Discover it® Cash Back may be wiser for cardholders wanting lower rates and fees for emergency expenses, more predictable rotating categories or a better-rated customer service experience (Chase ranked fourth in J.D. Power’s latest card satisfaction survey).
Stacking different cards is a great way to ensure you earn the most rewards. While the Discover it® Cash Back earns a fantastic rate on its quarterly categories, there are better options for travel purchases and purchases outside of those seasonal categories.
A top-tier flat-rate rewards card like the Wells Fargo Active Cash® Card would be excellent for covering purchases beyond your rotating categories and their quarterly spending limits since it can earn 2 percent cash rewards on purchases. In the same vein, the Chase Freedom Unlimited® would also be a prime choice for its boosted 1.5 percent cash back flat rate. Its additional unlimited categories can lend some stability for staple purchases outside Discover’s cash back calendar. These categories will rake in 5 percent back on Lyft purchases (through March 2025), 5 percent on travel booked through Chase Ultimate Rewards and 3 percent on dining and drugstore purchases.
Using a flexible travel card, like the Chase Sapphire Preferred® Card, with your Discover card will reward your travel spending and other everyday categories that Discover can’t cover year-round. For a reasonable $95 annual fee, you’ll earn 5X Chase Ultimate Rewards points on travel through Chase’s online portal and on Lyft purchases (Lyft offer through March 2025), plus 3X points on dining (including eligible delivery services), select streaming services and online grocery purchases (excluding Walmart, Target and wholesale clubs). Other travel purchases will net 2X points, while all other purchases get 1X points. What’s more, you can then redeem these points toward travel through Chase Ultimate Rewards for an additional 25 percent value boost.
The Discover it® Cash Back is perfect for people who can adjust their spending to take advantage of Discover’s cash back calendar each quarter. Its high-earning rewards scheme maximizes Discover’s Cashback Match bonus, making it one of the best first-year reward offers for a no-annual-fee card. The Discover it® Cash Back carries perhaps the lowest rates and fees available, and it’s accessible with just a “good” or higher credit score (670+ FICO score).
Although it isn’t the most feature-rich or newcomer-oriented card in its class, the Discover it® Cash Back’s focus on accessibility, affordability and excellent customer service give it all the hallmarks of a great rewards card for those who don’t mind putting in a little elbow grease to make it shine.
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.
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