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Discover it Cash Back Credit Card – 5% Cash Back & Year-One Bonus
February 6, 2025
What Makes the Discover it Cash Back Card Special?
No Annual Fee & 5% Rewards
The Discover it Cash Back Credit Card is famous for its rotating 5% cash-back categories. Each quarter, you earn 5% back on up to $1,500 spent in that quarter’s bonus categories. These categories change every three months – often covering popular spending areas like gas stations, grocery stores, restaurants, or Amazon. All other purchases earn an unlimited 1% back. The kicker? No annual fee, so all the rewards you earn are pure gain.
First-Year “Cashback Match”
Discover doesn’t offer a traditional upfront bonus, but instead promises to match all the cash back you earn in your first year. This unique perk effectively doubles your rewards for year one. For example, if you earned $300 in cash back during year one, Discover will match that, giving you a total of $600 back! It’s like a surprise year-end bonus. This makes the card extremely lucrative in the first 12 months – especially if you maximize those 5% categories each quarter.
0% Intro APR
Another newbie perk is a 0% intro APR for 15 months on purchases and balance transfers. This can help if you have a big purchase to pay off over time. After 15 months, the regular APR kicks in, so plan accordingly. While carrying a balance isn’t ideal, it’s nice to have a lengthy interest-free period as a safety net.
Additional Benefits
The Discover it Cash Back isn’t just about cash rewards. It comes with a few surprising perks that many cardholders appreciate:
- No foreign transaction fees: You won’t pay extra for purchases abroad.
- First late payment forgiveness: If you slip up and pay late once, Discover waives the late fee. Consider it a free pass to learn from. Plus, there’s no penalty APR for that first missed payment.
- Freeze it® on/off switch: Misplaced your card? Discover’s app lets you lock your account instantly, preventing new purchases until you find it. It’s peace of mind at your fingertips.
- Free credit score & alerts: You get free FICO® Credit Score updates, and even Social Security number monitoring for identity threats – a nifty addition for fraud protection.
- Cash at Checkout: Need cash fast? Discover allows getting cash back at checkout (select merchants) with your credit card, with no fees – essentially an ATM alternative.
Kudos Tip: Keeping track of rotating categories can be tricky – one quarter it’s gas stations, next quarter groceries. Tools like Kudos can help by reminding you which card to use for the current 5% category and even suggesting the best card at checkout. It’s like having a cheat sheet for your wallet, so you never miss out on rewards.
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Pros and Cons of the Discover it Cash Back
Pros:
- Big Rewards in Common Categories: 5% back is among the highest cash-back rates around, albeit in specific categories. Over a year, you can earn $300 from category spend if you max out the $1,500 each quarter – and $600 with the first-year match factored in!
- No Annual Fee: Paying $0 to hold this card means every dollar of cash back is true profit. This makes the card an easy long-term keeper – it won’t cost you to hang onto it for occasional use.
- Flexible Redemption: Cash back earned can be redeemed in any amount, any time. You can take it as a statement credit, direct bank deposit, gift cards, or even at Amazon checkout. There’s no minimum redemption, so even $5 is yours to use.
- Intro APR & First-Year Match: The 15-month 0% APR offer is great for big purchases or balance transfers in the short term. And of course, the Cashback Match effectively turbocharges your earning in year one – a feature unique to Discover.
Cons:
- Rotating Categories Require Effort: Earning 5% isn’t automatic on everything – you must activate new categories every quarter and adjust your spending to those categories. It takes a bit of planning. If you forget to activate or your spending doesn’t align with the bonus categories, your rewards may be lower.
- Quarterly Cap: The 5% is superb, but limited to $1,500 per quarter in spending. After hitting that, additional spend in those categories reverts to 1%. For big spenders, a flat 2% cash-back card might earn more once you hit the cap.
- Limited Acceptance Abroad: Discover’s network is widely accepted in the U.S. (99% of places that take credit cards now accept Discover, so domestic use is no problem). But internationally, Discover is less common. Travelers might favor a Visa/Mastercard when outside the U.S., despite no foreign fee on Discover.
- No Traditional Sign-up Bonus: There’s no upfront lump-sum bonus like many cards offer for spending a certain amount in 3 months. The match system means big rewards come later. If you prefer instant gratification, this requires patience.
- Good Credit Required: This isn’t a starter card for those with limited credit. You’ll typically need a good to excellent credit score for approval. If you’re still building credit, you might have to opt for a student or secured version.
How to Maximize Your Cash Back
Plan Around the 5% Categories
Check Discover’s 5% category calendar at the start of each year. For example, 2025’s categories included Grocery Stores and Drugstores in Q1, Restaurants and Gas Stations in Q2, etc. Enroll each quarter. Then use the Discover it for those purchases up to $1,500. If Q3 is “Amazon and Dining,” consider doing your holiday shopping in July on Amazon, or if Q4 is “Groceries and Fitness Clubs,” maybe prepay some grocery gift cards or gym membership to fully utilize the 5%. Essentially, time your big purchases in bonus categories when they earn 5%.
Use Another Card for Non-Category Spending
Since the Discover it gives only 1% on non-bonus purchases, pair it with a good flat-rate cash-back card. That way, you get 5% on category spend and 2% on everything else. Many savvy users employ this strategy. The key is to use the right card for the right purchase. If that sounds like juggling – don’t worry, tools like Kudos can help simplify it.
Redeem Wisely
Fortunately, with Discover it, there’s no complex rewards program to navigate – cash back is straightforward. But make sure you redeem in a way that benefits you most. Cash deposited to your bank or as a statement credit is usually best. Using rewards at Amazon or PayPal checkout is convenient, but it’s essentially the same value as cash, so there’s no special boost there. One cool option: wait until after your Cashback Match posts at the end of year one, then redeem the larger sum for something fun or financially useful. It can feel more impactful when you see a bigger number.
Comparing Discover it Cash Back Credit Card with Other Credit Cards
When considering the Discover it Cash Back Credit Card, it's helpful to compare it with other popular options in the cashback credit card category:
- Annual fee: $0
- Sign-up bonus: Cash bonus after meeting spending requirements
- Key rewards: 5% on travel purchased through Chase Travel℠, 3% on dining and drugstores, 1.5% on all other purchases
- Standout feature: Flexible redemption options including cash back, travel, and gift cards
Capital One Savor Cash Rewards Credit Card:
- Annual fee: $0
- Sign-up bonus: Cash bonus after meeting spending requirements
- Key rewards: 3% on dining, entertainment, popular streaming services, and grocery stores
- Standout feature: No foreign transaction fees
Blue Cash Everyday® Card from American Express (rates & fees):
- Annual fee: $0
- Welcome offer: Cash bonus after meeting spending requirements
- Key rewards: 3% at U.S. supermarkets (up to $6,000 per year, then 1%), 3% cash back up to $6,000 per year, then 1%. Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit or at Amazon.com checkout
- Standout feature: This card offers a generous intro of APR on purchases and balance transfers
Terms apply to American Express benefits and offers. Enrollment may be required for select American Express benefits and offers. Visit americanexpress.com to learn more. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by Amex Assurance Company.
Each card offers unique benefits tailored to different spending habits and preferences. Consider your personal financial goals when choosing the best card for you.
Key Takeaways:
- Discover it Cash Back Credit Card excels in offering rotating cash-back categories
- Chase Freedom Unlimited® offers diverse category bonuses
- Capital One Savor Cash Rewards Credit Card rewards dining and entertainment spending
- Blue Cash Everyday® Card from American Express provides strong rewards on everyday purchases
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Conclusion – Is the Discover it Cash Back Right for You?
The Discover it Cash Back Credit Card is like that friend who gives you great rewards for a bit of effort. If you’re willing to activate categories each quarter and tailor your spending to earn 5% in those areas, this card can deliver outstanding value. It’s especially rewarding in the first year thanks to Discover’s Cashback Match – effectively doubling all your earnings. Even after year one, the ongoing 5% categories make it a keeper in any rewards wallet.
This card is perfect for savvy savers and planners: people who don’t mind marking their calendar or using a tool to remember rotating categories. It might not be the best fit if you prefer set-it-and-forget-it simplicity – a flat-rate 2% card would be easier (albeit with lower rewards on targeted spending). For most, though, the extra effort pays off.
If you enjoy getting maximum cash back on things you buy regularly – and a nice bonus when that year-end match comes through – the Discover it Cash Back is absolutely worth it. And with Kudos by your side, you’ll be armed with the knowledge to make the most of this fantastic card, hassle-free.
FAQ: Discover it Cash Back Credit Card
Do I need a good credit score to get the Discover it Cash Back?
Yes – generally a good FICO credit score is recommended for approval. Excellent credit will give you even better odds. If you’re still building credit, consider Discover’s student Cash Back card or secured card first, then graduate to this one.
What are the current 5% categories and do I have to activate them?
Yes, you must activate each quarter’s categories. The categories change every 3 months. For example, in one recent year Q1 was Grocery Stores, Q2 was Restaurants and Gas Stations, Q3 was Amazon.com and Streaming services, and Q4 was Wholesale Clubs and Grocery. Discover announces the categories in advance for the full year, so you can plan ahead.
How does the first-year Cashback Match work?
Discover will automatically match all cash back you’ve earned at the end of your first year. You don’t have to do anything extra. Example: If you earned $200 in cash back from your purchases, they will add another $200, making it $400 total. This match posts once after your 12th billing cycle – it’s not monthly. It’s a fantastic boost for new cardholders, essentially doubling your first-year rewards.
Can I have both the Discover it Cash Back and Discover it Chrome cards?
Yes. Discover it Chrome is a different version that gives 2% back on gas and dining (up to a limit) instead of rotating 5%. Some people do hold both to cover more bases. There’s no rule against having multiple Discover cards, but you typically need to have one card for a year before applying for another. If you spend heavily in gas and dining year-round, Chrome can complement the rotating categories of the Cash Back card.
Is the Discover it Cash Back worth it if I already have a 2% cash-back card?
Yes, if you don’t mind a little planning. The card can out-earn a 2% card for bonus category spending. For instance, earning 5% instead of 2% on $6,000 worth of annual category purchases means $180 vs. $120 – and with first-year match that becomes $360 vs. $120, a big difference. For other purchases, you can fall back on your 2% card. Many users find the combo of a 5% rotating category card + a flat 2% card covers all bases and maximizes rewards. Since the Discover it Cash Back has no fee, it can only help your rewards strategy as long as you put in a bit of effort to leverage it.
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