This Discover It Cash Back review includes everything you need to know.
We’ll look at the perks:
- Unlimited cash back match
- $0 annual fee
- 5% cash back
- Rewards that never expire
And the cons:
- 5% cash back is limited to rotating quarterly categories
- Must register for the 5% cash back perk every quarter
- $1,500 max per quarter 5% cash back limit
My Discover It cash back review in a nutshell: this Discover card can be a great card for earning 5% cash back on day-to-day purchases *if* your current natural spending habits fall into the quarterly 5% cash back categories. Plus, each quarter is limited to 5% on up to $1,500 qualifying purchases. It’s a good card if you shop on plan and don’t mind making sure to activate your account.
Discover It Cash Back Review – Pros
Unlimited Cash Back Match
Discover offers an unlimited cash back match after the first year of use. This means Discover will match every purchase you make in the first year. Whether the cash back is at the 5% bonus rate or the standard 1% rate, Discover will match the amount at the end of the first year of use. For example, $300 in cash back turns into $600 by year-end. This is one offer that sets Discover apart from other similar credit cards. *This offer is limited to new card members only and may not be available in the future*.
$0 Annual Fee
While many credit cards offer excellent bonuses and ways to earn points, those perks are typically associated with a $95+ annual fee. The Discover It cash back card is an option that offers excellent earning opportunities with a $0 annual fee. Users can make up to $300 a year in just 5% cash back earnings. Not to mention all other spendings outside of the 5% categories earn 1% cash back.
A credit card with no annual fee that makes an adequate base hit earning like the Discover It cash back card can be the best option. Especially for a first-time credit card holder. Because the age of your credit plays into your credit score, it is advantageous to keep the oldest credit card. A $0 annual fee makes that an easy decision.
5% Cash Back: How to Earn, How to Sign Up
One of the biggest perks of the Discover It Cash Back card is the opportunity to earn 5% cash back. Keep in mind this perk only applies to rotating qualifying categories every quarter. Some example qualifying purchases include:
- Grocery stores, drug stores, and select streaming services
- Restaurants and wholesale clubs
Discover releases a variety of qualifying purchases every quarter. Just make sure to read the 5% categories when signing up to make sure the categories align with your current spending habits. All other purchases earn 1% cash back.
Rewards Never Expire
As with all Discover cards, the rewards you earn with the Discover It cash back card never expire. In my review of the Discover It Miles card, I shared a story of finding my original credit card for the first time after a year or so and logging in to find over $100 of rewards waiting for me to use during my next trip.
Discover It Cash Back Review – Cons
5% Cash Back Limits
And now for some of the cons of this card. The qualifying 5% cash back purchases do not include big chains. Keep in mind that this is something that holds true for most high-percentage cash back cards. You have to shop at a stand-alone grocery store, pharmacy, etc. to get the 5% cash back. This oftentimes means going out of your way and altering your normal spending habits to cash in on the perk.
Based on Discover’s current fine print, the 5% offer doesn’t apply to Walmart, Target, convenience stores, wholesale clubs, discount stores, and supercenters. These stores are not eligible for 5% cash back but would earn you the regular 1% cash back.
Cash Back Registry
The other downside of the Discover It cash back card is the fact that users have to register and activate the opportunity to earn 5% cash back. This extra step on top of only non-chain stores qualifying for 5% cash back, makes it even more unlikely for average spenders to actually get the 5% cash back perk.
You can easily sign up for the card and go about your life thinking you’re getting 5% on certain items. However, if you’re not paying attention to the qualifying categories or you forgot to log in and activate the 5% cash back opportunity, you’ll just be earning the regular 1%. These two barriers to earning the 5% cash back perk will reward the detail-oriented person but can trip up those who aren’t looking to pay attention to the details.
5% Cash Back on up to $1,500
The final point we need to discuss in this Discover it cash back review is the $1,500 limit to the 5% cash back perk. 5% is an excellent amount for a $0 annual fee card. The catch with the Discover It cash back card is that it is limited to a max of $1,500 every quarter. This is a standard limitation with similar high-percentage earning cards, but it is something to note nonetheless. Just don’t sign up for the Discover It cash back card and thinks you’re guaranteed 5% cash back on every purchase.
This $1,500 per quarter rule brings the maximum cash back earned per quarter to $75 (5% of $1,500). That’s $300 a year, which is actually a good amount of money to make from just one $0 annual fee cash back card. Just keep in mind that the shopping category criteria will need to be met to max out. This looks like grocery shopping at a local non-chain grocery store instead of Walmart, Costco, or Target.
I’d say this $1,500 limit is reasonable for Discover to levy on this basic card. We can’t expect 5% cash back on all qualifying purchases every month. If you had a credit limit of $5,000 and you maxed it out on qualifying purchases every month, your cash back rewards would be $250 per month and $3,000 a year. That’s not a sustainable model.
Bottom Line: Is the Discover It Cash Back a Good Credit Card?
The Discover It cash back card is a good credit card for the detail-oriented person who doesn’t mind playing by the specific rules of the card to earn up to $300 a year in cash back.
This card is not for someone who wants a hands-off cash back card for the following reasons:
- You must register for the cash back categories every quarter
- You must alter spending habits to get the 5% cash back earnings
Overall, it can be a good card for some people, but I would argue that the Discover It Mile card is the better option.
