Your ultimate guide to Discover cards
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Editor’s note: This post has been updated with the latest credit card information. It was originally published on Oct 20, 2019. This page includes information about Discover products that are not currently available on The Points Guy and may be out of date.
Between a smaller portfolio and fewer premium credit card offerings, Discover doesn’t get the same attention as the big three card issuers, American Express, Chase and Citi. But if you’ve blown through your 5/24 slots with Chase, are a big spender looking for cash back or are working to build or repair your credit score, Discover might be a great choice. We’ll take a look at everything you need to know before applying for a Discover card, as well as the top cards from the issuer.
Best Discover cards of 2020
- Discover it Cash Back: Best for rotating bonus categories
- Discover it Miles: Best for everyday spending
- Discover it Chrome: Best for gas purchases
- Discover it Business Card: Best for businesses
Comparing the best Discover credit cards
|Credit card||Earning rate|
|Discover it Cash Back||Enroll each quarter to earn 5% back on your first $1,500 in purchases in rotating quarterly bonus categories, 1% on all other purchases|
|Discover it Miles||1.5x miles (1.5%) on all purchases|
|Discover it Chrome||2% back on your first $1,000 each quarter in combined purchases at gas stations and restaurants, 1% on all other purchases|
|Discover it Business Card||1.5% back on all purchases|
Before you apply
Whether it’s Chase’s 5/24 rule or Amex’s once-per-lifetime bonus policy, each card issuer has its own rules surrounding new applications, and Discover is no different. As Doctor of Credit reports, you can have a maximum of two Discover cards, and your first account has to be open for at least a year before you can apply for a second. You can also only have one student card.
Referral bonuses are a great way to earn extra rewards when you help your friends and family pick out a new credit card. The Discover it Miles card offers a $100 statement credit each for you and your approved referral (after he or she makes any purchase in the first three months), up to $500 per calendar year. All other Discover cards — Discover it Cash Back, Discover it Student Cash Back, Discover it chrome, Discover it Student chrome and Discover More Card — award a $50 referral statement credit, also up to $500 per calendar year. Both deals are good through Dec. 31, 2020, although they’ve been extended for multiple years now.
Discover will also let you product-change to a different card, with the exception of the Discover it Miles card. Unlike with other issuers, there doesn’t appear to be a minimum time your account must be open before you can product-change.
Discover credit cards
Before we talk about the differences between the various Discover it cards, let’s talk about their similarities. None of the Discover it cards charge an annual fee or foreign transaction fees, which isn’t something you can always take for granted. More often than not, cards without annual fees charge foreign transaction fees, while those with an annual fee don’t. This makes Discover a solid option for earning rewards at home and abroad without any type of financial commitment on your part.
All the Discover it cards also offer a similar introductory offer. Instead of a fixed amount of points or money after spending a certain amount, Discover will match all your cash back or miles earned during your first 12 months of card membership. This makes any bonus categories twice as valuable for that first year.
Discover it Cash Back
This card functions similarly to the popular Chase Freedom, in that it earns 5% back on your first $1,500 in purchases at rotating quarterly categories (upon enrollment). The current 2020 Q1 categories are Grocery stores, Walgreens and CVS.
If you max out the $1,500 bonus category each quarter, you’ll earn $300 on the year, though Discover will match the cash back you earn in your first year (so that’s $600 back). After that, the card earns 1% on all other purchases.
With no redemption minimums to worry about, you can cash out your rewards at any time and get that money working for you again.
Discover also offers two other versions of the Discover it card with identical earning structures. One is the Discover it Student Cash Back, which has one additional perk worth mentioning. For every school year that your GPA is 3.0 or higher (up to five years), you can receive a $20 statement credit as a good grade reward. While that’s not a ton of money, if you’re a student it might be reason enough to pick the student version over the standard Discover it Cash Back card.
The other is the NHL Discover it. You’ll get access to the same 5% quarterly rotating categories (on your first $1,500 in purchases each quarter you enroll; then 1%) and first year cash-back match, and for no additional cost you can get the logo of your favorite NHL team on the card.
Discover it Miles
This card earns an unlimited 1.5x “miles” on all purchases made, although don’t let the name fool you. These aren’t transferable miles like you’d earn with certain Chase or Amex cards; instead, they can be redeemed as a fixed-value travel eraser. Miles are worth 1 cent apiece.
You can redeem your miles for any travel purchase made on the card in the last 180 days. The terms and conditions list the following as eligible travel purchases:
- Airline tickets
- Hotel rooms
- Car rentals
- Travel agents
- Online travel sites
- Commuter transportation
Discover it chrome
The Discover it chrome card is not especially competitive for those with established credit, as it only offers 2% at gas stations and restaurants on your first combined $1,000 spent each quarter, then 1% on all other purchases. That doesn’t compare favorably to a card like the American Express® Gold Card, which offers 4x on dining worldwide, worth 8% back based on TPG’s valuations, but that card has a $250 annual fee (see rates and fees) compared to no annual fee on the Discover it chrome card.
Again, Discover offers two different cards that use this same earning structure which might be more useful to certain target audiences. The first is the Discover it Student chrome, which offers the same $20 statement credit each school year your GPA is 3.0 or higher; for up to the next 5 years, as the Discover it Student Cash Back and might be well-suited to students with less established credit histories.
The other version is the Discover it Secured, which is another great strategy to build credit, whether you’re young and just starting out or looking to move on from some dings to your credit report. After you’re approved and given a maximum possible credit line, you’ll pay a refundable security deposit as collateral. Your card’s credit limit will then equal the amount you chose to pay for the deposit. This allows Discover to issue a full credit card (not a debit or prepaid card) to people with less-than-perfect credit while minimizing risk.
Discover it Business Card
This no-annual-fee, no-frills business card offers an unlimited 1.5% cash back on all purchases, which Discover will match at the end of your first year. That’s not all that exciting by itself, but high-spending businesses can use the first-year cash-back match to essentially earn 3% back on all their purchases without spending any extra time or effort on their card strategies. Discover also offers a number of management tools that businesses will appreciate, such as free employee cards and the ability to easily download transactions into Quicken, QuickBooks and Excel.
Comparing cash-back cards
When looking at most cash-back cards, the first thing you’ll want to do is sit down with an estimate of your yearly spending and make sure that you’ll earn enough rewards to offset the annual fee. Unlike frequent flyer miles or credit card points, where the exact value of your rewards changes based on how you choose to use them, cash is always worth the same amount.
Thankfully this isn’t an issue with Discover cards, as none of them charge annual fees. Even better, none of them charge foreign transaction fees, which is a rare combination. This means you can use your Discover cards to continue racking up rewards abroad, though you’ll want to keep an eye on the various bonus categories to make sure you’re using the most rewarding card for each transaction.
How to decide between earning cash back and transferable points
Any time you apply for a new credit card, it’s important to understand how it fits into your broader strategy. When it comes to deciding between earning airline miles or cash back, there are two important facts to be aware of. The first is that, with few exceptions, miles are going to be worth more than the equivalent amount of cash back. I’ll take 1 mile per dollar over 1% cash back any day, on just about every airline I fly with. The other fact is that miles take more effort to redeem well (and really at all), and your time is worth something, too.
If you’re willing to put time into studying airline award charts and learning the ins and outs of transferable points, you can get a much higher return on your spending pursuing those rewards, especially for long-haul premium cabin travel. But if you’re looking for simplicity, cash back might be a better option.
Of course it doesn’t have to be one or the other — there’s room for both cards in a comprehensive award strategy. No matter how hard we try to keep our travel free using points and miles, there will be some expenses that simply require cash including taxes (on award tickets, or resort fees at hotels), tours, food and drink and other expenses that your points can’t easily cover. Having some cash-back rewards at your disposal can help you keep your out-of-pocket costs as low as possible when traveling.
With no cash or points sign-up bonuses, Discover cards probably shouldn’t be the first cards you add to your wallet. That being said, for people with poor or limited credit histories, the various student and secured cards Discover offers can be a great stepping stone to more rewarding transferable points cards.
Experienced players can get great value here as well. Since there’s no cap on the first year cash-back match, high-spending individuals and businesses can score an incredible return on bonus categories and everyday spending without jumping through as many hoops as some other cards require.
For rates and fees of the Amex Gold, click here.
Featured photo by The Points Guy.
WELCOME OFFER: 60,000 Points
TPG'S BONUS VALUATION*: $1,200
CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners
*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.
- Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®
- 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 60,000 points are worth $750 toward travel
- Get unlimited deliveries with a $0 delivery fee and reduced service fees on orders over $12 for a minimum of one year on qualifying food purchases with DashPass, DoorDash's subscription service. Activate by 12/31/21.
- Earn 5X points on Lyft rides through March 2022. That’s 3X points in addition to the 2X points you already earn on travel.