Rotating 5% cash back: Discover it Cash Back review

Nov 19, 2019

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The Discover it® Cash Back provides 5% cash back on the first $1,500 in purchases that you make each quarter at select merchants. The eligible merchants rotate quarterly and require enrollment. You’ll earn 1% cash back on all other purchases and the card doesn’t charge an annual fee. There’s no traditional sign-up bonus, but Discover will match all the cash back you’ve earned at the end of your first year. Card Rating*: ⭐⭐⭐

*Card Rating is based on the opinion of TPG’s editors and is not influenced by the card issuer.

Determining how to maximize the points and miles earned by many credit cards can be complicated and time consuming — and doesn’t really help if you don’t travel. For both of these reasons, my parents use credit cards that earn cash back. As they’ve learned, cash back can be complicated to obtain on some cards — but not on the Discover it Cash Back.

The Discover it Cash Back card provides 5% cash back on the first $1,500 in purchases that you make each quarter you enroll at select merchants, which change each quarter. These merchants include gas stations, grocery stores, restaurants and more. Even if you use travel rewards cards for most purchases, you may find value in adding this card to your wallet. Let’s dive into the card’s benefits, earning, redeeming and how it compares to other cards to decide if the Discover it Cash Back card is right for you.

In This Post

Who is this card for?

(Photo by TPG staff)

The Discover it Cash Back card earns cash back in rotating quarterly categories. This means it can be a solid companion to whatever cards you currently carry in your wallet, since it will boost your earnings to 5% in select categories each quarter on the first $1,500 in purchases, without charging an annual fee.

The card is comparable to the Chase Freedom, which may be a better option if you have (or plan to get) a Chase Ultimate Rewards-earning card that allows you to earn Ultimate Rewards points instead of cash back. However, it’s generally easier to get approved for the Discover it Cash Back, so it may be a better choice for customers with weaker credit.

Further reading: TPG beginner’s guide: Everything you need to know about points, miles, airlines and credit cards

Introductory offer

The Discover it Cash Back doesn’t offer a traditional sign-up bonus, but it does offer a few introductory offers to new cardholders. First, Discover will match all the cash back you earn during the first 12 consecutive billing periods that your new account is open. The match occurs at the end of the 12th consecutive billing period, as opposed to throughout your first year.

TPG always recommends paying off your balance in full, and not spending outside your means. But, if you need to make a large purchase or transfer a balance, you may find the Discover it Cash Back’s 0% Intro APR offer useful. The 0% Intro APR offer is for 14 months on purchases and balance transfers, and there’s a decreased 3% intro balance transfer fee (see terms). Then, a 13.49% to 24.49% standard variable APR and up to 5% fee for future balance transfers will apply.

Further reading: The top credit cards with 0% intro APR

Main benefits and perks

The Discover it Cash Back card doesn’t charge any foreign transaction fees. (Photo by TPG staff)

The Discover it Cash Back card has benefits and perks that are well-suited for first-time or less experienced credit card holders. It is simple and straightforward to earn and redeem cash back with this card — but we’ll dedicate later sections of this review to earning and redeeming. In this section, let’s consider the card’s other benefits.

Two of the Discover it Cash Back’s policies — no late fee on your first late payment and the fact that paying late won’t raise your APR — are designed to provide comfort if you make a mistake. Plus, you can pay your bill up to midnight in the Eastern time zone the day it’s due by phone or online, and U.S.-based customer support staff is always available.

Other benefits and perks of the Discover it Cash Back include:

  • No foreign transaction fees
  • Free overnight shipping for card replacement to any U.S. street address at your request
  • Freeze your account in seconds to prevent new purchases with an on/off switch available on both the mobile app and website
  • Free Credit Scorecard with your credit score, number of recent inquiries and more
  • Activate free alerts to know when any new credit card, mortgage, car loan or other account shows up on your credit report
  • Activate free alerts that notify you if your Social Security number is found on any of thousands of Dark Web sites

Further reading: Your ultimate guide to Discover cards

How to earn cash back

Image by Julie Clopper / Getty Images
It’s not too late to earn 5% on Amazon.com purchases through the end of December 2019. (Image by Julie Clopper/Getty Images)

The Discover it Cash Back’s earns 5% cash back at different places each quarter you enroll, like gas stations, grocery stores, restaurants, Amazon.com and more. For example, until the end of December 2019, after enrollment, you’ll earn 5% on up to $1,500 in purchases at Target, Amazon.com and Walmart.com.

Further reading: Discover announces 5% cash-back quarterly categories for 2020

You do need to activate 5% earning before making purchases in the bonus category each quarter — but Discover makes the process easy online, and you can activate up to two months before each quarter begins. You’ll only earn 5% cash back on up to $1,500 in purchases each quarter at eligible merchants, though. Assuming you spend $1,500 on purchases in the 5% categories during a quarter that you activate the bonus, you’ll earn $75 of cash back on these purchases.

You’ll also earn 1% cash back on all other purchases with the Discover it Cash Back. However, you can boost your cash back percentage on other purchases by using another card with better flat-rate earnings or increased earnings in select categories. One example is the Discover it® Miles,  which also matches the cash back you earn during your first year.

Further reading: Why you should get the Discover it Miles

How to redeem cash back

(Photo by Beatrix Boros/Stocksy)
Cash back is easy to redeem with the Discover it Cash Back. (Photo by Beatrix Boros/Stocksy)

Some cards earn cash back rewards but then make it difficult to actually obtain your cash back. This is one place the Discover it Cash Back card excels: there are many options and most will allow you to obtain as little as a penny in cash back.

  • Gift cards or instant eCertificates, starting at $20
  • Charitable donations to select charities, starting at a penny
  • Credit to your account, starting at a penny
  • Electronic deposit into any account you designate, starting at a penny
  • Pay with Cashback Bonus at select merchants, starting at a penny

For all but one of these reception options, your cash back is worth its face value. However, some gift cards may be available with a bonus — so you may be able to find some merchants for which $20 of cash back can get you a $25 or $30 gift card. If you shop with any of these merchants, this will provide the best value. Otherwise, I’d recommend simply redeeming for a credit to your account.

Further reading: How to redeem Discover cash-back rewards

How does the Discover it Cash Back compare?

The Discover it Cash Back offers 5% bonus categories that change each quarter on the first $1,500 in purchases in those categories. This means that it is directly comparable to the Chase Freedom, which also offers 5% bonus categories that change quarterly (activation required) and also doesn’t charge an annual fee. The Chase Freedom has a few benefits that aren’t provided by the Discover it Cash Back such as extended warranty protection, purchase protection, trip cancellation and interruption insurance, and secondary auto rental collision damage waiver.

If you’re looking for a rotating bonus categories card that can become part of a solid Ultimate Rewards points-earning strategy when paired with a Chase Ultimate Rewards-earning card such as the Chase Sapphire Reserve or Chase Sapphire Preferred Card, the Chase Freedom will be a better choice. But, the Discover it Cash Back tends to accept a wider range of credit scores. This makes it a better choice if you have less-than-excellent credit.

Rotating bonus category cards like the Discover it Cash Back and Chase Freedom can complement other cards, but should not be your primary card. You should also have a flat-rate cash back card such as the Citi® Double Cash Card, Chase Freedom Unlimited, Capital One® Quicksilver® Cash Rewards Credit Card, Bank of America® Premium Rewards® Visa® credit card or Discover it® Miles in your wallet, and you may find it useful to have a few other cards that provide useful travel benefits or increased earning in categories you frequently utilize.

If you are a student, you may want to consider the student version of the Discover it Cash Back — the Discover it® Student Cash Back — which provides statement credits for good grades (students get a $20 statement credit each school year — September to August — that they earn a 3.0 GPA or higher, for up to the next five years).

Further reading: The best cash-back credit cards of 2019

Bottom line

The Discover it Cash Back provides 5% cash back on up to $1,500 in purchases each quarter in rotating categories. As the card has no annual fee, it’s a relatively easy choice to add to your wallet for use in these categories each quarter — especially if you’ve already exhausted your Chase 5/24 slots. However, as the potential cash back in these 5% categories is limited to the first $1,500 in purchases each quarter and you’ll only earn 1% cash back on all other purchases, this shouldn’t be your everyday go-to card.

Apply here for the Discover it Cash Back.

Featured image by TPG staff.

Discover it® Miles

Set your own sign-up bonus with the Discover it Miles card. Any rewards you earn in the first year will automatically be matched at the end of the year and you'll earn an unlimited 1.5 miles on all purchases with no annual fee.

Apply Now
More Things to Know
  • Unlimited Bonus: Discover will match all the Miles you've earned at the end of your first year, automatically. For example, if you earn 35,000 Miles, you get 70,000 Miles. That's $700 towards travel! The more you earn, the more you get.
  • Earn unlimited 1.5x Miles for every dollar spent on all purchases - with no annual fee.
  • No Blackout Dates. Simply pay for travel purchases like airlines, hotels, rental cars, and more with your Discover it® Miles card.
  • Miles Pay You Back. Easily redeem Miles as a statement credit for travel purchases. Or get cash.
  • Freeze your account in seconds with an on/off switch either on the mobile app or website to prevent new purchases, cash advances, and balance transfers.
  • Get your free Credit Scorecard with your FICO® Credit Score, number of recent inquiries and more.
  • Get an alert if we find your Social Security number on any of thousands of Dark Web sites.* Activate for free.
  • Rates & Fees
Intro APR on Purchases
0% for 14 months
Regular APR
13.49% - 24.49% Variable
Annual Fee
$0
Balance Transfer Fee
3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*
Recommended Credit
Excellent/Good
Terms and restrictions apply. See rates & fees.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below 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.