Discover it Cash Back review: Maximize rewards with rotating 5% categories

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The Discover it® Cash Back Credit Card is a rare card that adapts to your changing spending habits throughout the year. 

It offers 5% cash back on rotating quarterly categories (up to $1,500 in purchases per quarter) and 1% on all other purchases. Plus, Discover matches all the cash back earned during the first year, doubling the rewards potential for new cardholders.

With no annual fee, a solid intro APR offer, and no foreign transaction fees, the card provides valuable benefits without high costs. 

How the Discover it® Cash Back works

The Discover it Cash Back Credit Card is designed for consumers who want to maximize their rewards without paying an annual fee. Here are the key features:

• Rewards: 5% cash back on rotating quarterly categories (up to $1,500 spent per quarter, activation required) and 1% cash back on all other purchases 
• Cashback match: Discover doubles all rewards earned in the first year
• Annual fee: $0 
• Introductory APR offer: 0% APR on purchases and balance transfers for 15 months, followed by an ongoing APR of 18.24%-28.24%.
• Redemption options: Redeem cash back as a check, gift card, or statement credit, or make purchases through Amazon.com or PayPal
• Additional benefits: Free FICO credit score, no foreign transaction fees, Freeze it® feature to quickly lock your card

Discover it® Cash Back Credit Card rewards

Earning rewards 

One of the standout features of the Discover it® Cash Back Credit Card is its unique rewards structure: 

• 5% cash back (after activation) on rotating quarterly categories (up to $1,500 spent per quarter, then 1%)
• 1% cash back on all other purchases

This structure allows for a maximum of $75 in bonus category earnings per quarter, or $300 per year, on top of the standard 1% back on all other spending. 

Discover's 5% cash back categories change every three months. They often include popular spending areas like restaurants, gas stations, grocery stores, and online retailers. Here’s a look at the 2024 bonus rewards categories.

It's important to note that you must activate the bonus categories each quarter to earn the 5% cash back rate. You can do this through your online account, the Discover mobile app, or by visiting the Discover website.

Redeeming rewards 

Cash back is often simpler than points or miles because you don't need to convert or transfer your rewards to use them.

Cardholders can opt for traditional cash back as a check or statement credit or use their rewards for purchases on Amazon.com or through PayPal. You can also redeem cash back for gift cards from various retailers and restaurants. All options have a 1:1 redemption rate. Discover may also offer promotions where you can get more value for your cash back when redeeming for certain gift cards.

The Discover It Cash Back offers better value for Amazon.com and PayPal purchases than rival cash back cards — for example, Chase offers $0.80 per point for these redemptions.

One advantage of the Discover it® Cash Back card is that your rewards never expire. There are also no minimum redemption amount for direct deposit, check, or statement credit options. This flexibility allows you to redeem your cash back on your schedule, however you want. 

Discover it® Cash Back Credit Card benefits

Sign-up bonus

Many cash back cards offer a traditional sign-up bonus after meeting a minimum spending requirement in the first few months. But the Discover it® Cash Back Credit Card takes a different approach. 

Instead of a one-time bonus, Discover automatically matches all the cash back you earn during your first year as a cardholder through its Cashback Match program.

For example, if you earn $200 in cash back during your first year, Discover will match that $200, giving you a total of $400 in cash back rewards. This unique structure can be lucrative if you maximize your 5% rotating category purchases throughout the year.

While the Cashback Match bonus has the potential to be more valuable than traditional sign-up bonuses, it does require you to wait a full year to receive the bonus. In contrast, most cash back credit cards offer bonuses in the $150 to $200 range after spending a specified amount within the first three months.

Additional perks

Although the Discover it® Cash Back card may not come with an extensive array of perks, it does offer a few valuable benefits:

• Free FICO® credit score: Your credit card statement will include your FICO® Credit Score each month, allowing you to easily track your credit health over time.
• Security features: Discover provides several security benefits, such as free Social Security number monitoring, account activity alerts, and the ability to freeze your card if it's misplaced or stolen using the Freeze it® feature.

Introductory APR offer

The Discover it® Cash Back card offers a 0% APR on purchases and balance transfers for the first 15 months. This can be particularly useful for those planning to make a large purchase or consolidate debt. After the promotional period ends, a variable APR of 18.24% to 28.24% applies.

If you transfer a balance, you’ll have to pay a balance transfer fee. This card has a 3% intro fee (until October 10, 2024) and 5% after (see terms). 

Discover it® Cash Back Credit Card fees & charges

Annual fee

One of the most appealing aspects of the Discover it® Cash Back card is that it does not charge an annual fee, a common feature among cash back credit cards.

Interest rates

The Discover it® Cash Back card offers an introductory 0% APR on purchases and balance transfers for the first 15 months. However, this offer will not last forever. 

Once the introductory period ends, any remaining balances will be subject to a variable APR ranging from 18.24% to 28.24%, depending on your creditworthiness.

While these interest rates may seem high, they align with the industry average. Current credit card interest rates are around 20.71%, according to Red Ventures. 

To avoid interest charges, pay your balance in full each month and take advantage of the introductory APR offer wisely.

Other fees

The Discover it® Cash Back card stands out from many other cash back cards because it does not charge foreign transaction fees. This makes it a good option for those who travel internationally or make purchases from overseas retailers. 

Another noteworthy feature of this card is that it waives the late payment fee for your first missed payment. Discover also never charges a penalty APR, a higher interest rate that some credit card issuers apply after a late payment.

However, it's important to be aware of other potential fees. Cash advances incur a fee of 5% of the advanced amount, with a minimum fee of $10. If a payment is returned due to insufficient funds, you may be charged a returned payment fee of up to $41.

How the Discover it® Cash Back Credit Card compares 

To help you decide whether the Discover it® Cash Back Credit Card is the right choice, it's useful to compare its features with other popular cash back cards. Here’s a closer look.

When deciding which cash back credit card is right for you, consider your spending habits, rewards preferences, and whether you plan to use the card for international transactions.

Who should consider the Discover it® Cash Back Credit Card?

The Discover it® Cash Back Credit Card can be an excellent choice for several types of consumers:

• Strategic spenders who can maximize quarterly bonus categories: If you're willing to keep track of the rotating 5% cash back categories and adjust your spending, you can earn significant rewards. This card is ideal for those who can align their spending with the bonus categories, such as groceries, gas stations, or restaurants. 
• Those looking to save on fees: With no annual fee and no foreign transaction fees, the Discover it® Cash Back card is a cost-effective option. The waived late payment fee for the first missed payment can provide peace of mind for those who occasionally forget to pay on time.
• Those who want to transfer a credit card balance: The intro APR offer on balance transfers can be attractive for those looking to consolidate high-interest debt. By transferring balances to the Discover it® Cash Back card, you can save on interest charges and pay down your debt more efficiently during the promotional period.

Keep in mind the Discover it® Cash Back Credit Card can be paired with other cash back cards to maximize rewards. For example, you could use this card for purchases in the active 5% bonus categories and another card with a higher flat rate or different bonus categories for your other expenses.

How we rated this card 

Every credit card review we publish has undergone a rigorous editorial process to ensure accuracy and objectivity.

We rate all credit cards on a 10-point system, with 10 being the highest possible score and 1 being the lowest possible score. We assess each card across several key factors, weighted based on what our research shows matters most to readers like you. Learn more about our methodology here. 

The bottom line 

The Discover It Cash Back Credit Card is an excellent choice for those who can maximize the rotating bonus categories and appreciate a no-fee card with flexible redemption options. The Cashback Match feature makes it particularly valuable in the first year. 

But for those seeking premium benefits or who prefer a more straightforward rewards structure, better options might be available. The card's strength lies in its high potential rewards and flexibility. 

Editorial disclosure: Opinions expressed are author's alone, not those of any bank, credit card issuer, or other entity. This content has not been reviewed, approved, or otherwise endorsed by any of the entities included in the post.