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The Chase Freedom® is not currently available to new cardholders. Please visit our list of the best cash-back cards for alternative options.
If you are looking to maximize your rewards, a 5% cash-back card can be a smart addition to your wallet. Oftentimes, they have standard interest rates and no annual fee.
Discover offers four different credit cards that, upon activation, provide 5% cash back in various categories on up to $1,500 in quarterly purchases made each quarter in select categories (then 1%). Consumers can choose from the following cards: Discover it® Cash Back, NHL® Discover it®, Discover it® Balance Transfer and Discover it® Student Cash Back (Select's pick for best college student cash-back credit card).
Discover's 5% cash-back calendar for 2022 includes everything from grocery stores, fitness clubs, gym memberships, gas stations and Target purchases, to restaurants, PayPal, Amazon.com and digital wallets. These eligible merchants rotate quarterly, and cardholders must enroll each quarter to receive the benefit at select merchants.
Below, Select breaks down Discover it Cash Back's rewards and benefits to help you decide if it's the right card for you.
Like the Chase Freedom®, 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 (then 1%). 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 automatically in all the other categories.
Here's the Discover cash-back calendar for 2022:
- January to March (activation closed): Grocery stores and fitness clubs, gym memberships (excludes Walmart and Target purchases)
- April to June (activate now): Gas stations and Target
- July to September (activate starting May 1, 2022): Restaurants and PayPal
- October to December (activate starting Aug. 1, 2022): Amazon.com and digital wallets (digital wallets include Apple Pay, Google Pay, Samsung Pay and Garmin Pay)
This 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. There is no limit to how much Discover will match.
Select calculated how many rewards the average American can earn if they optimize the way they use their Discover it Cash Back. We worked with the location intelligence firm Esri, who provided us with a sample annual spending budget of $22,126.
The budget includes six main categories: groceries ($5,174), gas ($2,218), dining out ($3,675), travel ($2,244), utilities ($4,862) and general purchases ($3,953).
Here's a breakdown of how much cash back you can roughly earn in each category, annually:
- Groceries: $103
- Gas: $44
- Dining out: $73
- Travel: $22
- Utilities: $49
- General purchases: $62
- Total: $353
Cardholders can earn an estimated $707 in cash back the first year (including the cash back from the welcome bonus) and a total of $2,120 over five years.
The cash back doesn't expire and you can redeem your rewards at any time for statement credits, gift cards, merchandise and more.
The Discover it Cash Back offers contactless tap-to-pay technology that makes it fast and easy to pay at millions of places.
Trying to optimize your quarterly credit card usage can be a lot of work, so it is worth it to do the research beforehand to make sure whether a 5% cash-back credit card is right for you.
However, using a cash-back card on a daily basis can save you money. If you don't mind rotating and activating your rewards each quarter, the Discover it Cash Back may be great for your spending habits.
For other options, Select's top pick for cash-back card, the Alliant Cashback Visa® Signature Credit Card, offers 2.5% cash back on all purchases (up to $250 in cash back rewards per billing cycle). It does have a $99 annual fee, which is waived the first year.
Never had a credit card before? Here's the best starter card for your wallet.
To determine which credit cards offer the best value, Select analyzed 234 of the most popular credit cards available in the U.S. We compared each card on a range of features, including rewards, welcome bonus, introductory and standard APR, balance transfer fee and foreign transaction fees, as well as factors such as required credit and customer reviews when available. We also considered additional perks, the application process and how easy it is for the consumer to redeem points.
Select teamed up with location intelligence firm Esri. The company's data development team provided the most up-to-date and comprehensive consumer spending data based on the 2019 Consumer Expenditure Surveys from the Bureau of Labor Statistics. You can read more about their methodology here.
Esri's data team created a sample annual budget of approximately $22,126 in retail spending. The budget includes six main categories: groceries ($5,174), gas ($2,218), dining out ($3,675), travel ($2,244), utilities ($4,862) and general purchases ($3,953). General purchases include items such as housekeeping supplies, clothing, personal care products, prescription drugs and vitamins, and other vehicle expenses.
Select used this budget to estimate how much the average consumer would save over the course of a year, two years and five years, assuming they would attempt to maximize their rewards potential by earning all welcome bonuses offered and using the card for all applicable purchases. All rewards total estimations are net the annual fee.
While the five-year estimates we've included are derived from a budget similar to the average American's spending, you may earn a higher or lower return depending on your shopping habits.
Information about the NHL® Discover it®, Chase Freedom®, Alliant Cashback Visa® Signature Credit Card has been collected independently by Select and has not been reviewed or provided by the issuer of the cards prior to publication.
For rates and fees of the Discover it® Cash Back, click here.
For rates and fees of the Discover it® Student Cash Back, click here.
For rates and fees of the Discover it® Balance Transfer, click here.