If you want to maximize your rewards, a 5% cash-back card can be a smart addition to your wallet as they often have standard interest rates and no annual fee.
The Discover it® Cash Back is one of three Discover cards that can be activated to earn 5% cash back on the first $1,500 in purchases in rotating categories each quarter, then 1%. Discover's 5% cash-back calendar has previously included everything from grocery stores and drug stores to select streaming services (excludes Walmart and Target purchases). The eligible merchants rotate quarterly, and cardholders must enroll each quarter to receive the benefit at select merchants.
Below, CNBC Select breaks down Discover it Cash Back's rewards and benefits to help you decide if it's right for you.
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Get a 0% intro APR for 15 months on purchases and balance transfers; balance transfer fee applies. Then 17.74% - 26.74% Standard Variable Purchase APR applies, based on credit worthiness
- INTRO OFFER: Unlimited Cashback Match for all new cardmembers. Discover will automatically match all the cash back you've earned at the end of your first year! There's no minimum spending or maximum rewards. You could turn $150 cash back into $300
- Earn 5% cash back on everyday purchases at different places you shop each quarter like grocery stores, restaurants, gas stations, and more, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases
- Redeem cash back for any amount. No annual fee
- Terms and conditions apply
Balance Transaction Fee
3% for the first 15 months; 5% at a promotional APR that Capital One may offer to you at any other time
Welcome bonus
The Discover it® Cash Back card has a unique welcome bonus for new card members in their first year only where Discover automatically matches all the cash back they've earned at the end of their first year. So, if you earn $100 cash back at the end of the first year, Discover will give you an additional $100. There is no limit to how much Discover will match.
Benefits and perks
The Discover it Cash Back is light on benefits, but that's often the case with no annual fee cards. It offers the following perks:
- Free access to your FICO score: You can view a credit scorecard with your FICO credit score and what's impacting it.
- $0 Fraud Liability Guarantee: You're not responsible for unauthorized purchases on your card.
- Social Security number alerts: Discover will notify you if your social security number is found on the dark web or if there are new inquiries or accounts on your Experian credit report.
Consider pairing your card with a Discover bank account
If you want to do all your banking in one place, the Discover® Cashback Debit Checking account offers a debit card that earns 1.00% cash back on up to $3,000 in debit card purchases each month. You can also earn a generous return on your cash with a Discover® Online Savings Account.
Discover® Cashback Debit Checking
Monthly maintenance fee
$0
Minimum deposit to open
$0
Minimum balance
None
Rewards
1% cash back on up to $3,000 in debit card purchases each month. See website for details by clicking "Learn More".
Free ATM network
60,000+ Allpoint® and MoneyPass® ATMs
ATM fee reimbursement
None
Overdraft fee
$0
Mobile check deposit
Yes
Terms apply.
How to earn and redeem Discover it Cash Back rewards
The Discover it Cash Back offers 5% cash back in rotating categories on up to $1,500 in combined purchases after you activate the bonus every quarter; after you reach the limit, it's 1% on all purchases. If you maximize your spending in these categories, you could earn $75 cash back each quarter on top of the unlimited 1% cash back you earn in all the other categories.
Discover releases its 5% cash-back categories at the start of each quarter. Previous categories have included restaurants, drug stores, gas stations, grocery stores, Amazon and more.
The cashback doesn't expire and you can redeem your rewards at any time for statement credits, gift cards, merchandise and more. If there has been no account activity for 18 months, or it is closed, Discover will credit your account or send you a check for the balance.
Rates and fees
There is no annual fee for the Discover it® Cash Back card and it charges no foreign transaction fees. There is a 3% intro balance transfer fee for transfers that posts to your account during the first 15 months that your account is open, up to 5% fee on future balance transfers. There's no fee the first time you pay late; after that, up to $41. Any returned payments will carry a fee of up to $30.
If you plan on carrying a balance, the Discover it® Cash Back offers a 0% intro APR for 15 months from the date of account opening for purchases and balance transfers, then the standard variable purchase APR of 17.74% - 26.74% applies.
Card comparison
Discover it Cash Back Card vs. Wells Fargo Active Cash® Card
The Wells Fargo Active Cash® Card is great if you want simplicity thanks to its flat-rate 2% unlimited cash rewards on purchases and $0 annual fee.
- High, unlimited flat-rate return on purchases
- Intro APR on purchases and qualifying balance transfers
- Lower introductory balance transfer fee
- Up to $600 of cell phone protection against damage or theft (subject to a $25 deductible)
- Charges a 3% foreign transaction fee
- Balance transfer fee increases to 5% of each transfer (minimum $5) after 120 days
- Limited redemption options unless you pair it with a Wells Fargo card that allows point transfers
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Apply Now to take advantage of this offer and learn more about product features, terms and conditions.
- Earn a $100 cash rewards bonus after spending $500 in purchases in the first 3 months.
- Earn unlimited 2% cash rewards on purchases.
- 0% intro APR for 12 months from account opening on purchases and qualifying balance transfers. 18.74%, 24.74%, or 28.74% variable APR thereafter; balance transfers made within 120 days qualify for the intro rate and fee of 3% then a BT fee of up to 5%, min: $5.
- $0 annual fee.
- No categories to track or remember and cash rewards don't expire as long as your account remains open.
- Find tickets to top sports and entertainment events, book travel, make dinner reservations and more with your complimentary 24/7 Visa Signature® Concierge.
- Up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible.
Balance Transfer Fee
3% intro for 120 days from account opening, then up to 5%, min: $5
Foreign Transaction Fee
3%
The Wells Fargo Active Cash® Card also has no annual fee, but a very different rewards structure from the Discover it Cash Back.
It offers a flat 2% cash rewards on your purchases. While that's lower than the up to 5% the Discover it Cash Back can earn, the 2% cash rewards from the Active Cash card applies to eligible purchases and is uncapped. It has a welcome bonus of $100 cash rewards bonus after spending $500 in purchases in the first 3 months, which is a shorter timeframe than the Discover it's bonus, but can potentially be more valuable.
The Wells Fargo Active Cash also comes with some extra protection like up to $600 of cell phone protection (subject to a $25 deductible) and 24/7 roadside dispatch.
Learn more: Wells Fargo Active Cash® Card
Discover it Cash Back Card vs. Chase Freedom Unlimited®
The Chase Freedom Unlimited® is a no-annual-fee card that earns generous cash-back on everyday purchases and a lucrative welcome bonus. Plus, if you pair it with a premium Chase credit card that allows point transfers, you can convert your cash back into flexible travel rewards.
- Users get a high rewards rate and strong welcome bonus
- Purchases and balance transfers receive an intro APR
- No annual fee
- Has a foreign transaction fee
- Few rewarding ongoing benefits
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Earn a $200 Bonus after you spend $500 on purchases in your first 3 months from account opening
- Enjoy 5% cash back on travel purchased through Chase TravelSM, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more; 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and 1.5% on all other purchases.
- No minimum to redeem for cash back. You can use points to redeem for cash through an account statement credit or an electronic deposit into an eligible Chase account located in the United States!
- Enjoy 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 18.24% - 27.74%.
- No annual fee – You won't have to pay an annual fee for all the great features that come with your Freedom Unlimited® card
- Keep tabs on your credit health, Chase Credit Journey helps you monitor your credit with free access to your latest score, alerts, and more.
- Member FDIC
Balance transfer fee
Intro fee of either $5 or 3% of the amount of each transfer, whichever is greater, in the first 60 days. After that, either $5 or 5% of the amount of each transfer, whichever is greater.
Foreign transaction fee
3% of each transaction in U.S. dollars
The Chase Freedom Unlimited® (see rates and fees) could be worth considering if you prefer to enter the Chase Ultimate Rewards ecosystem, which is more valuable for travel rewards.
This card has no annual fee and offers exceptional returns on everyday spending. It earns 5% cash back on travel purchased through Chase Travel℠, 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service and unlimited 1.5% cash back on all other purchases.
If you pair this card with a Chase credit card that offers transfers (such as the Chase Sapphire Preferred® Card (see rates and fees)), you can combine your points and convert the points you earn with the Freedom Unlimited into airline miles and hotel points. This allows you to drastically increase the value of your rewards.
Learn more: Chase Freedom Unlimited®
Compare checking accounts
Is the Discover it Cash Back card right for you?
The Discover it® Cash Back can be a strong choice if you want to earn cash back without paying an annual fee. 5% back in rotating categories is a generous return and the card is even more rewarding once you factor in its welcome bonus.
However, optimizing your quarterly credit card usage can be a lot of work, so it is worth researching beforehand to ensure whether a 5% cash-back credit card is right for you. If you prefer not to deal with rotating bonus categories, activation or quarterly caps, you may want to consider a flat-rate cash-rewards credit card like the Wells Fargo Active Cash® Card or Chase Freedom Unlimited® instead.
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