Discover made a very bold move in the year 2013 when it suddenly stopped offering all its existing credit card products to the new applicants and replaced them with one single card offering called ‘Discover it’, targeted at all kinds of credit card users! The company has made several feature additions to this card ever since, and has made it one of the most sought-after cards today! There’s also a new Discover it Miles product as well.
Discover it is overall an excellent, no-fee cash back rewards card that offers you an attractive 5% cash back on all your purchases on rotational categories (rotating per quarter), apart from 1% cash back all year round. It falls into the elite category when it comes to introductory offers, as you get amazing intro rates on balance transfers and purchases.
Despite it not having the kind of penetration its main competitors – MasterCard and Visa enjoy, Discover’s network is growing constantly every month and it offers a great deal of flexibility in the way you can use your rewards. Let’s go over the pros and cons of the card.
Attractive rewards and an unmatchable sign-up bonus
With Discover it card you earn 1% cash back on all your purchases throughout the year. Apart from that, Discover selects certain bonus categories every quarter wherein your cash back rewards increase to 5% on a maximum of $1500 spent on products falling in that category. The 5% cashback categories for the year 2016 are:
January to March 2016: Gas and ground transportation
April to June 2016: Restaurants and movies
July to September 2016: Home improvement stores and Amazon.com
October to December 2016: Amazon.com and more
So, if you spend $1700 in total on restaurants and movies between April and June, 2016, your total cash back will be $75 + $2 = $77 (5% of $1500 + 1% of $200).
Discover is presently offering an unmatchable sign-up rewards bonus on its Discover it cards! It doubles up the entire cash back bonus earned in your first year with the card. So, the 5% cash back becomes 10% and the 1% cash back becomes 2% at the end of the first year! However, not everyone may like to wait that long for the sign-up bonus to arrive!
Great introductory rates
Discover it comes in two variants that differ mainly on the introductory APR offer. There’s a regular Discover it card and a Discover it – 18 month balance transfer offer card.
With the regular Discover it card, you get an introductory APR of 0% on all your purchases and balance transfers for the first 12 months. The Discover it – 18 month balance transfer offer card, on the other hand, provides you a 0% APR on your purchases for the initial 6 months and an extended 0% APR on the balance transfers for the first 18 months.
So, you can buy anything you need and pay back the dues at your own pace. You’ll be charged an APR varying between 11.24% and 23.24% after 12 or 6 months respectively. Please note, there’s a 3% fee applicable on balance transfers.
Discover Deals is an online shopping mall run by Discover. You can maximize your cashback percentage by shopping on Discover Deals with your Discover it card. Discover deals has a tie-up with over 200 online retailers and currently offers an extra 5% to 20% cash back on purchases made with them. If you’ve just bought your Discover it card, the year-end cash back doubling offer can make these deals even more attractive. For instance, Papa John and Macy’s currently offer cashbacks of 25% and 10% respectively. With the year-end bonus coming into play, those rates can double-up to a whopping 50% and 20% respectively!
Solid fraud protection
Discover it provides a $0 fraud liability guarantee, ensuring that you never pay for any unauthorized charges on your credit card. All the purchases made with Discover it card are closely monitored by the company and you’re quickly alerted via text, phone call or email in case of any suspicious activity on your account. Every Discover it card has a ‘Freeze It’ feature which freezes your card in case it gets lost or stolen, thus preventing any unwanted charges on it.
U.S.-based customer service
Customer service is high on Discover’s priority list! Any time you have an issue with your Discover it card, you won’t need to wait for long to speak with a human. Discover ensures that you’re put through to a well-trained and well-informed U.S.-based customer service rep at the earliest. Please note, Discover bagged the ‘Highest in Customer Satisfaction Award’ from J.D. Power and Associates in the year 2014, outscoring many popular competitors.
Flexible due dates
You get to choose your own due date and can make the payment by phone or online. This is a huge advantage as it allows you to space out your monthly bills in accordance with your cash flow. Other credit cards have preset due dates which often coincide with your other monthly bills, making it hard for you to handle so many expenses at once.
If all the above pros aren’t enough, Discover also provides you with free access to your FICO score online and on your monthly statements, doesn’t charge any foreign transaction fee or late payment fee (for first late payment) and has a $0 annual fee.
Manual opt-ins to make the most of 5% cash back categories
Although the rotational 5% cash back categories are very popular among the ‘Discover it’ card members, it must be noted that you need to opt-in to the 5% bonus categories every quarter. Furthermore, the condition that you can avail 5% cash back on only up to $1500 spent in the pertinent category may not go down too well with the big ticket spenders.
Keeping track of categories may be difficult for many
As mentioned above, you need to activate the 5% bonus every quarter if you wish to make the most of this benefit. Once activated, you’ll need to keep track of the applicable categories for that quarter. This may not be feasible or convenient for a lot of cardholders.
Discover doesn’t enjoy the kind of acceptance that its main competitors – Visa and Mastercard do. It charges pretty hefty premiums to merchant establishments, the reason why they don’t go with Discover.
If you’re looking for a card product that helps you maximize your cash-back benefits, Discover it, with its 5% and 1% cash back bonus, double-cash-back bonus at the end of the first year, Discover Deal benefits, $0 annual fee and attractive 0% intro APR is hard to overlook! On the other hand, if you want a credit card with quick cash back bonus, flat cash back rate and a wider choice of categories, you may be better off looking at other alternatives available in the marketplace.