Discover it Cash Back Review: 5% in Rotating Categories and Double Cashback in First Year

Table of Contents
  1. 5% Cash Back on Rotating Categories
  2. Cash back match for the first year
  3. Flexible redemption options
  4. Useful security tools
  5. Attractive 0% APR introductory offers
  6. Low fees
  7. Who would this card be a good fit for?

Did you know that you could earn 10% cash back on purchases from Amazon.com? It's true.

The Discover it Cash Back credit card offers 5% cash back on rotating bonus categories and 1% cash back for everything else. You'll need to remember to activate those bonus categories each quarter. But once you do that's great value for a card that has no annual fee.

The Discover it Cash Back card doesn't stop there though. Added perks like a cash back match for the first year and a 0% APR period of 14 months help to make it one of the best cash back cards on the market today.

To learn more about what the Discover it Cash Back card has to offer, read on to see our full review.

5% Cash Back on Rotating Categories

The Discover it Cash Back card gives a standard 1% cash back on all purchases. That's fine but it's not what makes this card so interesting. Where cardholders can really ramp up their reward earnings is by taking advantage of the 5% cash back for the first $1,500 in purchases made at bonus categories each quarter.

Here are the 5% bonus categories that are being offered for 2019:

  • Jan-Mar: Grocery Stores, excludes Walmart and Target
  • Apr-Jun: Gas Stations, Uber and Lyft
  • Jul-Sep: Restaurants and Paypal
  • Oct-Dec: Amazon.com, Target & Walmart.com

(so in the holiday shopping season, you can get up to 10% cash back on your Amazon purchases in the first year! the Amazon credit card only gets you 5% and that's if you're an Amazon Prime member)

It's important to understand that cardmembers don't automatically earn the 5% cash back at bonus-category stores. Instead, you must activate the bonus each quarter by enrolling. You can do that on Discover's website, on Discover's app or by calling customer service.

I'll be honest and say that I'm personally not a big fan of credit card issuers using this “activation” gimmick. It can be confusing to the average customer.

After activating one quarter's bonus, customers may think, “Ok, I've enrolled in the cash back program now, so I'm good to go from now on.” But in reality, you need to enroll again and again each quarter.

Plus, forgetful people like me may struggle with taking full advantage of this system. There have been times that I've missed out on the first month or two of bonus cash back because I didn't remember to enroll in the program for the 32nd time.

If you do decide to get the Discover it Cash Back card, I recommend that you do what I ended up doing and set a reminder on your phone to activate the bonus cash back categories each quarter.

Cash back match for the first year

The Discover it Cash Back card has a killer sign-up bonus for new customers. At the end of your first year with the card, Discover will match the cash back that you accumulated during that time.

How much you can earn will depend completely on your spending patterns. But for the sake of example, if you were to take full advantage of the 5% bonus categories each quarter (on up to $1,500 in purchases), that would earn you $300 in cash back. At the end of the year, Discover would match that $300.

So without even taking the 1% transactions into consideration, you could easily earn $600 in cold, hard cash during your first year with this card.

Flexible redemption options

Redeeming your cash back is easy with the Discover it Cash Back card.

While some cash back cards have reward minimums that you have to reach before you can redeem your rewards, Discover doesn't play these games. You can connect your bank account and can transfer cash back starting at a penny.

But that's not the only way to redeem your cash back. Here are the other redemption options that the Discover it Cash Back card offers:

  • Credit to your account — starting at a penny
  • Charities — starting at a penny
  • Amazon (pay with rewards at checkout) — starting at a penny
  • Gift cards and eGift Certificate — starting at $20

Even though gift card redemptions have a $20 minimum, Discover will add a free $5 to every redemption. And since I'm personally all about free money any way I can get it, I love this option.

Useful security tools

On all their cards, Discover offers several tools to help protect their cardholders' identities and prevent credit card fraud. First, all Discover cardholders can check their actual FICO score any time at www.discover.com/fico.

Next, if you misplace your card, you can immediately “freeze” your account to keep any bad guys from enjoying a spending spree on your behalf. And while this isn't technically a security tool, if you do actually lose your card or have it stolen, Discover will overnight you a new card for free.

Finally, Discover offers free credit monitoring and will alert if you your social security number has been found on any Dark Web site.

Attractive 0% APR introductory offers

The Discover it Cash Back Card offers 14 months of 0% APR from the date of your account opening for both purchases and balance transfers. Balance transfers are charged a one-time transfer fee of 3% of the transfer amount.

Promotional 0% APR periods could help you finance larger purchases interest-free. But you'll want to make sure that you pay off your balance in full before the promotional period ends in order to avoid interest charges.

Low fees

The Discover it Cash Back credit card comes with no annual fee and no foreign transaction fee.

Discover will also waive the late payment fee the first time you pay late. If you're looking for a low-cost credit card, the Discover it Cash Back card is a great choice.

Who would this card be a good fit for?

The Discover it Cash Back card is the ultimate card for cash back strategists. If you're the kind of person that will look forward to activating your bonus categories each quarter and will happily plan your shopping trips around stores that are part of the bonus, you will get tremendous value out of this card.

But if you are more of a “set it and forget it” type of person, then everything listed above may sound more like “work” to you than “fun.” In that case, you may want to choose a card that offers a flat-rate cash back percentage on all purchases.

Also, if your spending tends to lean very heavily towards certain categories like gas or groceries, you may be better off choosing a card that emphasizes cash back for these expenses.

Finally, if you plan to do a lot of travel abroad, the Discover it Cash Back Card may not be a good fit. While Discover has widespread acceptance in the United States, things can get a little spotty overseas.

But if you plan to confine your travels to the United States and you're cool with activating bonus categories each quarter, the Discover it Cash Back card is a fantastic choice.

And since the Discover it Cash Back card charges no annual fee, there's very little downside to at least giving this one a shot!

Discover it Cash Back Card

8.5

Product Rating

8.5/10

Strengths

  • Cashback match for the first year
  • 5% cashback on rotating categories
  • Flexible redemption options
  • Intro offer on purchases & balance transfers
  • No annual fee

Weaknesses

  • 5% categories must be activated each quarter
  • Merchant acceptance of Discover is less widespread than others, esp. internationally

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These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

  1. FI Champion says

    Thanks for the reminder! I had not realized that Amazon was in the rotating categories this month (and next). I signed up for the Discover IT card about 10 months ago…..so I have a couple months left to earn the 10% back on my purchases. I was only getting back 2.5% otherwise, with a different credit card. Just in time for school supply shopping!

  2. N Morrison says

    Re: Discover paying 1% cash back on all purchases. Shouldn’t you have said “up to” 1% because you have to spend your way up to the 1% cash back level each year. I believe the starting rate is 0.25%.

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