The Discover It Cash Back is a no-fee card which earns at least 5% cash back on certain categories. These categories change every 3 months. Discover used to show each year’s cashback calendar in advance so there aren’t any surprises, but now they announce one month before. It’s fairly easy to plan ahead. Not to be confused with Discover It Miles, this card also earns unlimited 1% cash back on non-category purchases.
FEATURES AT A GLANCE
- No annual fee
- No foreign transaction fees
- 5% cash back on rotating categories ($1,500 quarterly spending limit)
- 1% cash back on everything else
Click here for 2024 categories.
Click here for 2023 categories.
Categories typically look like:
- Q1 Jan-March: Grocery stores plus 1-2 other categories
- Q2 April-June: Gas stations or restaurants, plus another category
- Q3 July-Sept: Restaurants or gas stations, and maybe Paypal or digital wallets
- Q4 Oct-Dec: Amazon.com plus Walmart.com and/or Target.com
SIGN UP BONUS
Discover offers the same bonus for both the Miles and Cash Back cards: they double the cash back you earn in the first 12 months of holding the card. Both cards may have 0% APR for up to 15 months, depending on your credit history.
With this welcome bonus, 5% categories turn into 10% cash back. There’s a $1,500 spending limit per quarter (after crossing the limit, you earn 1% instead of 5%, until the next quarter begins). If you max out each quarter by spending $6,000 in 12 months, you’ll earn at least $600 cash back after 1 year. This effectively makes the sign-up bonus $300 (or $420 compared to a card earning 3% cash back). This doesn’t include the unlimited 2% cash back earned in non-category spending.
You may be able to get an additional cash bonus when applying through a referral link.
OTHER BENEFITS OF THE DISCOVER IT CASH BACK
- No late fee the first time you miss a credit card payment
- View your FICO score at any time
- 100% U.S. based customer service (according to Discover)
- Free online privacy protection and dark web monitoring (Discover tries to upsell identity theft protection for $15/month but these free services are fine for most people)
RESTRICTIONS AND CREDIT SCORE
Recommended credit score: 670+
If you’re not sure whether you’ll be approved, you can check to see if you’re pre-approved.
Although Discover is widely accepted, it doesn’t have the same acceptance rate as Visa or Mastercard, especially overseas. It’s good to have a backup card when traveling. Discover may also limit customers to 2 Discover credit cards.
MAXIMIZING REWARDS WITH DISCOVER
Redeeming points for gift cards (GCs) is the best option. The discounted gift cards effectively raise the value of your cash back. This way, you can get more than 5% back. Discover gives up to a 25% discount on gift cards. For example, a $100 GC for $75 is about 1.33 cpp ($0.0133 per point) which works out to 6.65% cash back. Then a $100 GC for $80 equals 1.25 cpp ($0.0125 per point) which is 6.25% cash back. However, this isn’t guaranteed with every redemption. Discounts may vary, as will one’s choice of gift card brands.
If you spent $6,000 on the Discover It Cash Back in the first year, earning $600 cashback, this could be worth up to $700-800 in gift cards. Most people should easily get at least 5.5% or 6% cash back from Discover.
Discover may give limited discounts at Amazon. They have occasional promotions where you can use 1 or more Discover points for discounts. For this reason, never redeem 100% of your Discover points. You don’t have to pay your balance in full, either—Discover zeroes out your statement if $2 or less is showing. They waive small balances like some other banks.
Discover also has occasional promotions for current cardmembers, but you have to ask via Live Chat. Promotions include 0% APR for 12 months or bonus earn rates. Check every few months to see if anything is available.
ALTERNATIVES TO THE DISCOVER IT CASH BACK
The closest competitor is the Chase Freedom Flex Mastercard. The Flex is a little better since it always earns cash back at drugstores and restaurants, among other perks. Plus, its cash back can be worth a lot more. Then for 5% cash back without waiting for categories to rotate, there’s the Citi Custom Cash Card (CCCC).
Although the 5% categories are great, you’ll need other credit cards to fill in the gaps where you aren’t earning 5%. Aim for 3-5% cash back in every category year-round. In general, Discover It will be useful for at least 3 months of every year, no matter what your credit card setup is.
CONCLUSION
The Discover It Cash Back is a great card for long-term use. It earns 5% (or higher) in useful categories and doesn’t have any fees. Most people will find the card useful. Discover also has mildly interesting tools like the Online Privacy Protection and Dark Web Alerts. It doesn’t have the best short-term sign-up bonus, but it’s decent overall.
The downside is that the 5% categories are constantly changing. And you have to manually enroll your card each quarter to earn the 5%. If you forget to “activate” your card ahead of time, you only earn 1% cash back instead of 5%. Some people aren’t interested in paying such close attention to their credit cards, or they don’t want to juggle multiple cards for optimal cash back rates. The Discover It Cash Back is deceptively simple, but it could still be too much effort for some people. Still, it’s better than Discover It Miles for long-term use.
We rate the Discover It Cash Back card 5 out of 5 stars. ⭐⭐⭐⭐⭐
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Note: This review was last updated in June 2023. Details may have changed since then. Please do your own research where applicable, to ensure you’re getting the best deal. Or contact us directly to take advantage of our personalized consulting services!