Comparing the Discover It Miles vs. Discover It Cash Back card is a short and sweet conversation.
Today we’ll look at how to quickly determine the best card for you based on your spending habits and your needs.
About Discover as a Company
Discover is a digital banking and payment services company headquartered in the U.S., in Riverwoods, IL.
Founded in 1986, Discover prides itself on being customer-centered and operating a 100% U.S. based customer service center.
The few times I have called Discover has always resulted in excellent service with fast response time, accurate answers, and knowledgeable operators. 10/10 experience.
The Main Differences: Discover It Miles vs. Discover It Cash Back
The main difference between the Discover It Miles card and the Discover It Cash Back card is the way points are earned.
- With Discover It Miles, you earn 1.5 miles per $1 spent across the board.
- With Discover It Cash Back, you earn:1% cash back per $1 dollar spent AND
- 5% cash back on select rotating quarterly categories.
On the surface, the Discover It Cash Back card appears to be the winner,
It actually depends on your spending habits, however.
Discover It Miles vs. Discover It Cash Back: Similarities
These cards are surprisingly similar. From the first-year matching bonus to the way you can redeem points, both Discover It Miles and Discover It Cash are identical in benefits aside from how points are earned.
Discover It Miles
- 1.5 miles per dollar spent
- Miles Match in the first year
- $0 annual fee
- Miles can be used to erase travel or for cashback
- Miles never expire
Discover It Cash Back
- 1% cash back per dollar spent
- 5% cash back on select categories
- Cash Back Match in the first year
- $0 annual fee
- Cashback can be used to reimburse any purchase
- Cash Back never expires
Please note that 1.5 miles per dollar are the same as 1.5% per dollar. This brings the base offering per dollar of the Discover It Miles card to 0.5% higher per dollar compared to the Discover It Cash Back card.
Each card delivers double earnings in the first year with a total price matching bonus. So, in the first year, Discover It Miles offers 3% per dollar spent Discover Cash Back offers and 2% – 5%.
The winning card for you boils down to how confident you are in being able to use the Discover It Cash Back card in the rotating 5% categories.
Discover It Cash Back at a Glance
Let’s stick to the main question in comparing the Discover It Miles vs. the Discover It Cash Back card. What is the maximum and projected earning potential for each card?
Cash Back Earning Potential
1% earning on every dollar is a pretty base reimbursement amount for a $0 annual fee card.
The max earning potential for the Discover It Cash Back is 5% cash back on up to $1,500 worth of spending each quarter. This means you can earn up to $75 dollars per quarter and up to $300 a year in 5% cash-back opportunities. 5% is a solid amount for any credit card and especially a $0 annual fee credit card.
The catch is, earning 5% cash back is only applicable to a few select rotating categories every quarter. As a sample, the rotating categories for 2022 included:
- Grocery Stores (stand-alone) and Fitness Club and Gym Memberships
- Gas Stations (stand-alone) and Target
- Restaurants and PayPal
- Amazon and Digital Wallets
Stand-alone grocery stores are merchants selling grocery items that are not chain grocers. Per Discover, “All purchases made at Walmart, Target, convenience stores, wholesale clubs, discount stores, and supercenters are not eligible”. Make sure to read the fine print during each quarter.
Sometimes, Discover does include a chain like Target, however. We can’t overlook this. Also, in December 2022, Amazon was one of the qualifying categories. That is easy to hit during the holiday season. Options like these make spending $1,500 a quarter pretty easy to hit.
And keep in mind that you have to activate your 5% earnings through your Discover portal each quarter. This is as easy as pushing a button, but Discover is banking on some cardholders to forget to activate.
How to Redeem Points
You can redeem cash back earnings in two ways:
- Through direct deposit to your linked bank account
- Through statement credit
These redemption options are easy to do in the Discover App.
Discover It Miles at a Glance
When it comes to deciding what the max earning potential is for the Discover It Miles card, you have to pre-think how much you plan to spend using this card to see how it compares to the Discover It Cash Back card.
Miles Earning Potential
Since the earning amount is not capped on this card like the cash-back card, there are a few more variables in doing a head-to-head comparison.
The formula to figure out max miles rewards would be Total Spending x 1.5 / 100 for your earnings in dollars. If your average spending per month was $3,000, the total earnings would be $45 dollars per month, or $180 a year. With spending $5,000 a month, you would earn $75 a month and $300 a year.
As you can see, earning potential is solely based on your spending habits.
How to Redeem Miles
You can redeem your miles rewards in three ways:
- Through direct deposit to your linked bank account
- Through statement credit
- Through erasing a past travel charge that is within 180 days
Miles never expire and redemption is easy through the Discover App.
Bottom Line: Discover It Miles vs. Discover It Cash
Both of these Discover cards are excellent $0 annual fee cards with good earning potential. The question to answer when deciding between the two is how hands-on you want to be with earning the maximum amount.
Discover It Cash Back requires paying attention to emails or press releases that reveal the quarterly 5% categories. You then have to activate the deal through your app. And finally, you’ll potentially have to switch up where you buy groceries or buy your Christmas gifts, etc. for the given quarter to get the 5% cash back perk.
On the other hand, the Discover It Miles cards give you a straight 1.5% per dollar with no activation or spending changes necessary.
Personally, I prefer the hands-off earning potential of the Discover It Miles card at 1.5% per dollar. I like to shop at the most economic stores available to me. Also, I don’t have a gym membership or a ton of streaming services. On the surface, I think I could potentially max out 2 quarters at the 5% bonus, but it would be difficult with my current spending habits. If you’re into keeping track of categories and potentially switching up your spending habits to earn 5%, the Cash Back card is for you.
If you’d like to sign up for the Discover It Miles card, use my referral code here and get $100 after you’re approved and make one purchase. Yet another perk.
