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Part 1: Discover it® Card : Review of Benefits

Picture of Item Reviewed

Editor's Rating:
Intro Purchase APR Regular APR Intro Balance Transfer Annual Fee Credit Needed
N.A. $0 Excellent Credit
Feature Summary
    • 0% intro APR on balance transfers for 18 months-then a variable purchase APR applies, currently 10.99% - 22.99%. A 3% fee applies to each transferred balance.
    • 0% intro APR on purchases for 6 months. Then the variable purchase APR applies, currently 10.99% - 22.99%.
    • Over 5,000 cardmembers rated 4.8 out of 5 stars* and now Discover "Ranked Highest in Customer Satisfaction with Credit Card Companies in a Tie" by J.D. Power*.
    • 5% cash back for online shopping and department store purchases on up to $1,500 - Oct. through Dec. 2014 when you sign up*. 1% cash back on all other purchases.
    • Free FICO® Credit Score online and on monthly statements.*
    • No annual fee, no late fee for your first late payment - APR won't go up for paying late, no overlimit fee and no foreign transaction fee*.
    • Each Discover purchase is monitored. If it's unusual, you're alerted by e-mail, phone or text-and never responsible for unauthorized Discover card purchases.
    • *See rates, rewards, free FICO® Credit Score terms and other info by clicking "Apply."
Executive Summary - Discover has rebranded their cards in 2012 and this is the result of their efforts - the new it® series. It is an improvement over their previous credit cards (the More series) and I think that this card absolutely rocks. This is a long review and we'll start with a summary of it's key features.

Discover has long been one of the few issuers that focuses on just a few cards. While some issuers have hundreds of cards (those who sign deals with colleges, associations), they have decided to focus only on a few core cards and customer service. It comes then, as no surprise, that they come up on top in the customer service area. But in 2012, they consolidated their credit card portfolio even more by introducing this card. It is a major rebrand and it essentially replaced the "More" card. It has retained the great reward features of it's predecessors but included a couple of nifty ones as well. Before, we look into this card in greater detail, here is a summary of their features.

5% Quarterly Rotating Cash Back Bonus Category - I do not have conclusive proof of this. But I'm pretty sure it was Discover who started the whole concept of a quarterly rotating category before other issuers started copying them. And they have retained this feature for this card. This is how it works. Every quarter, there will be a list of expense categories which will allow you to earn 5% cash back (rather than the usual 1%). By being aware of these categories, you can earn even more cash back.

Earn 1% Cash Back on Purchases - For purchases that are not in the 5% cash back bonus category, you will earn 1% cash back. This is an improvement over the old Discover Cards (which had a tier so that you only started earning 1% cash back after spending $3,000 annual on your card).

Redeeming Points - Discover has added a few new ways that one could redeem the cash back that has been earned. In it's most simple form, you can redeem your cash back for (well) cash back. But now, you have a couple of options of doing it. For example, you can redeem it through the form of the statement credit. That simply means you apply the cash back earnings towards reducing your next bill. You could also have them directly deposited in a bank account.

Aside from getting your cash back, you can also exchange them for merchandise and donate your cash back to certain charities that have partnered with Discover. But perhaps the best value is exchanging the cash back for gift cards. The reason is that you can get a greater value on your gift cards compared to the cash back needed (for certain merchants - it is double the value). We will explore this issue later on.

One interesting option that you will have is that you can redeem your cash back when you shop at This is a feature that more issuers are introducing because I think they realize that we do shop a lot there!

No Late Fee Or Increase In APR and Other Features - The latest features that Discover has introduced is the concept of not charging any late fee the first time you have a late payment. They also promise not to increase your APR in the event of a late payment. This is quite a unique feature that very few other cards give. In fact, the only card we know that has these features is the Citi Simplicity Card. They are also making it easier for consumers to pay by making sure payments are excepted online or over the phone up until midnight (Eastern Time) on the day your payment is due. There is also no over-the-limit fees is you accidentally go over your credit limit.

Like all Discover cards, this one has no foreign transaction fee. This means that if you travel abroad, you avoid the 3% (very typical) fee that most cards will charge because it was made overseas and in a different currency.

US-Based Customer Service - Another key feature is that all their customer service representatives are based in the US. That means that there will be less chance of a misunderstanding due to language barriers.

Now that we've got the key features out of the way, let us take a closer look at how you can earn more cash back with this card starting with their 5% categories.

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Next: 5% Cash Back Bonus Categories »