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Credit Card Reviews

Discover it® Cash Back: Generous Incentives With No Annual Fee

The Discover it® Cash Back card offers some hefty rewards, particularly for new cardholders, making it one of the most valuable everyday cash back cards available.

Pros:

  • 0% intro annual percentage rate (APR) on purchases and balance transfers for 14 months and then an ongoing APR of 14.24% - 25.24% variable APR
  • 5% cash back in rotating quarterly categories on up to $1,500 in purchases each quarter (requires activation)
  • Cash back match at the end of your first year on all cash back earned
  • No annual fee

Cons:

  • May not be accepted in all countries outside of the U.S.
  • Need to activate quarterly for 5% cash back categories
  • Need good to excellent credit to qualify

Experian Review

If you have high expectations for a cash back card, the Discover it® Cash Back is one you need to check out. You can earn meaty rewards—5% cash back on categories that rotate quarterly on up to $1,500 in purchases each time you activate—and a generous new cardholder bonus—all with no annual fee.

Getting the Most From Discover it® 5% Cash Back

To take advantage of the high 5% cash back categories, you must activate online each quarter for everyday spending categories such as grocery stores, gas, restaurants and online retailer Amazon.com. You can activate anytime within the quarter to get your 5% on purchases in that category for the entire period. Discover's 2019 Cashback Bonus Calendar gives you all the details.

Discover it® pays 5% cash back on eligible purchases up to $1,500 per quarter, then 1% after that. You can redeem cash back in any amount, at any time, and rewards never expire. Other redemption options include direct deposits into your bank account, statement credits, donations to select charities, gift cards, e-certificates and shopping on Amazon.com. If you maxed out your rewards each quarter, you'd earn $300 in bonus cash back, plus 1% back on every other purchase.

Cash Back Matched Your First Year

The Discover it® Cash Back provides a compelling incentive for new cardmembers. Discover will match every dollar of cash back you earn at the end of your first year. Signing up for this bonus is not necessary—it's automatic—and there is no limit to how much is matched.

For big planned purchases, such as a home remodeling project, the new cardholder incentive can make this card quite lucrative. Say, for example, you earned $500 cash back in total rewards your first year. Discover will give you another $500 in cash back at the end of your first consecutive 12 months of being a cardholder.

Introductory 0% APR Is Another Way to Save

Another way to maximize your incentives as a new cardholder is to take advantage of the healthy 0% APR for purchases and balance transfers for 14 months. If you want to make a large purchase and pay it off over time, this is a valuable perk. After 14 months, you will pay an ongoing variable APR of 14.24% to 25.24% depending on your creditworthiness, so be sure to pay off your purchase balance before the 14-month period ends. The balance transfer fee is 3% of the amount transferred during the introductory period and then up to 5% after that, which is fairly typical with balance transfer cards.

Keep in mind that it is often better to not make new purchases with a card you're using for balances transfers. Mixing these two activities on one card can make it difficult to see where you stand on both your spending and debt payoff goals. In addition, because there are very specific rules about how interest charges are calculated for balance transfers and purchases after the 14-month 0% period, you could end up paying more interest than you planned.

If a balance transfer is your main objective, take a look at the Discover it® Balance Transfer card. This card has a similar cash back plan, but 18 months at 0% intro APR for balance transfers. At the end of the intro period, you will pay an ongoing variable APR of 14.24% to 25.24%.

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