As a general rule, I don’t sign up for any credit cards without a signup bonus worth at least $500. But the Discover it card is one of the rare exceptions.
Discover it has just a $50 signup bonus. You get that as a statement credit soon after you make your first purchase. The real value in this card comes from its Cashback Match. “After the first 12 consecutive billing periods that your new account is open, we will match all of the cash back rewards you’ve earned and apply them to your account in the following one or two billing periods,” the card application says.
The card normally gives 1 percent back on all purchases. 2 percent is decent, but there are other 2% cards out there where you get 2% immediately. Alright, I’ll get to the point: Discover has 5% cash back in rotating categories that change each quarter. This cash back is also doubled for the first year!
For Q4 of 2019, which just started, the 5% categories are Amazon, Target and Walmart.com. The 5% cash back applies to the first $1,500 of spending in those categories. I recently got this card and when the calendar turned to October, I immediately bought $1,500 worth of Amazon gift cards. If you are like me, $1,500 on Amazon goes very quickly during Christmas season. With the double cash back, I’ll get $150 back from Discover.
Discover hasn’t announced its 2020 categories yet, but this year, they were grocery stores in Q1, gas stations, Uber/Lyft in Q2 and restaurants in Q3. So the potential is there for $600 in bonus cash back for the first year you have the card. That’s in addition to 2% percent back on all regular spending.
You can cash out bonus $ directly to your checking account. Discover also lets you redeem for gifts and they often have great deals on them. For example, right now they have a special where it’s just $20 in rewards for a $25 Applebee’s gift card.
The last great thing about this card (but one you obviously need to be careful with), there’s no interest on purchases or balance transfers for 14 months. The length of time for both purchases and transfers is very rare.
There’s no annual fee so this one worth getting and keeping for the long haul. After the first year, though, I would only use it in the 5% categories as you should always be doing better than 1% on everyday purchases.
Apply for the Discover it card here.