Blue Sky Vs Discover Escape vs Discover Miles?

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Update – The cards from Discover analyzed here (Miles and Escape) are no longer offered by Discover.

Here is a recent reader question.

I haven’t seen many or any comparison between these three cards.

I currently have a Chase Freedom card through Visa but am looking to get a second card, probably one with a nice return. Here is how I assessed the three:

(1) American Express Blue Sky: Like it because of the absence of an annual fee, the 1.33% return and the consumer protections offered by Amex.

(2) Discover Escape: I also am really attracted to this card for it’s 2% reward (one of the best in the business) but am unsure about the $60 annual fee.

(3) Discover Miles: I didn’t really consider the card until I factored in the $3,000 double miles bonus every year and the fact that it has no annual fee.

Can you provide any other pros/cons and recommendations based on these cards? Right now I am leaning towards Discover Escape but I wasn’t sure how much I would need to spend to really make the annual fee worth the investment.

Seth

Answer – Seth, I think you have clearly spelled out the pros and cons of each card. But let me summaries again.

Blue Sky from American Express(R) – Here are the following pros and cons of the Blue Sky.

  • No annual fee
  • Rebate percentage equal to 1.33%
  • Amex Benefits
  • But it is an Amex and not accepted everywhere

Escape by Discover┬« Card – Here is what I like and dislike about this card.

  • You can earn double miles
  • You can earn extra miles by shopping online (through your account) at Discover’s partners’ website
  • You can redeem miles for gift cards
  • But there is a $60 annual fee
  • Discover is not well accepted internationally

Blue Sky(SM) Preferred from American Express. This card allows you to earn double points for dining, hotel, and car rental purchases. You are also given a $100 allowance for airline baggages! The annual fee is $75. Once again, you can breakdown your spending and figure if this card is better than either the regular Blue Sky or the 2 Discover Cards.

The following is the equation I would use for the Blue Sky Preferred Version to determine if it is better than any of the other cards.

(X minus Hotel + Dining + Car Rental) + (2*(Hotel Spending + Dining + Car Rental)) – (7500 = annual fee equivalent) + (10,000 = $100 baggage allowance).

I hope this will help your decision. The most important factor is how much you spend on the card.

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3 Responses to “Blue Sky Vs Discover Escape vs Discover Miles?”

  1. Seth Says:

    Thank you very much! I did my own analysis too and your math is accurate and the pro/cons of each card are exhaustive.

    To me, one is actually better off with the Escape if he or she never travels or travels minimally because you are earnings the 2x points no matter the expense whereas Miles only allows you to accrue benefits on travel (and I also believe restaurants). I find this ironic because the Escape card is generally considered the more premier travel card from what I have read.

    I also have a few quick follow-up questions:
    (1) Which of the three cards is easiest to get approval?
    (2) What Amex Blue Sky benefits are considered so valuable? Are they primarly travel-related or consumer-related for general shopping?

    Thanks!

  2. Mr Credit Card Says:

    All “blue” cards including the “blue sky” can participate in the blue savings program. (discounts from partner merchants

    http://bluesavings.americanexpress.com/bluesavings/

  3. TFiA Says:

    I’m going to feel awfully silly if I’m wrong about this, but– I do not think the math is correct. The Discover Escape should be represented as 2X-6000 not 2X-3000. Therefore, the break even point between the Escape and Miles card is $9,000, not $6,000 (if you assume a minimum of $3,000 on travel).

    To make it simple, an example of $9,000 total spend ($3,000 of which is on travel):

    Miles: ($3,000 * 2 miles = 6,000 miles) plus ($6,000 * 1 mile = 6,000 miles) for a total of 12,000 miles.

    Escape: ($9,000 * 2 miles = 18,000 miles) minus (6,000 miles**) for a total of 12,000 miles.

    **$60 annual fee = 6,000 miles, since a mile is worth a penny.

    The correct equation for Miles/Escape is:

    (3000 * 2) + (X-3000) = 2X – 6000

    Similarly, the correct equation for Escape/Blue Sky is:

    2X – 6000 = 1.33X

    Interestingly, the break even point here is almost $9,000 too (~$8,955).

    The equation for Miles/Blue Sky is:

    (3000 * 2) + (X-3000) = 1.33X

    The break even here is $9,090.

    For other travel spend (less than $3,000) here is a cheat sheet to save everyone from having to do the math–

    Assuming that $1,000 of the overall spend is on travel, here is the best card per total spend level:

    Up to $3,030: Miles
    $3,030 to $8,955: Blue Sky
    Over $8,955: Escape

    Assuming $2,000 of the overall spend is on travel:

    Up to $6,600: Miles
    $6,600 to $8,000: Blue Sky
    Over $8,000: Escape

    And, as previously discussed, assuming $3,000 of the overall spend is on travel:

    Up to $9,000: Miles
    Over $9,000: Escape

    Interestingly, once your travel spend reaches a minimum of ~$2,955, One of the options from Discover always beats Blue Sky.

    Great idea for an article, by the way.

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