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Discover it®: A 5% Contender?

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Discover it®: A 5% Contender?

The Discover it® 12:12 offers some pretty enticing terms: high rewards, no annual fee and access to a killer bonus mall. But as an everyday card, it’s up against a tough slate of competitors. Let’s examine whether or not this is the right cash-back card for you.

At a glance
Annual fees $0
0% APR promotions 0% on purchases for 12 months and 0% on balance transfers for 12 months, and then the ongoing APR of 10.99% - 22.99% Variable, OR
0% on purchases for 6 months and 0% on balance transfers for 18 months, and then the ongoing APR of 10.99% - 22.99% Variable
Balance transfer fee 3% of the amount transferred
Rewards program Cash back
Signup bonus None
Verdict: It’s a good card, but the 5% cash-back field is very competitive.
Good for:
  • Access to the Discover Deals bonus mall
  • Use during the holiday shopping season
  • People who fit the card’s bonus categories
  • Earning rewards while paying off a small balance
Bad for:
  • Someone who has a large amount of credit card debt
  • Someone looking for a 5% cash-back credit card with different categories
  • Making a big purchase and paying it off over time

In this article:

The Discover it® 12:12 basics
When to use the Discover it® 12:12
Discover it® 12:12 vs.  other cash-back credit cards
Discover it® 12:12 vs. low APR credit cards

The Discover it® 12:12 basics

The Discover it® 12:12 offers 5% cash back in rotating bonus categories, up to $1,500 spent per quarter. Here are the bonus categories for 2015:

  • January – March: Gas and Ground Transportation
  • April – June: Restaurants and Movies
  • July – September: Summer Spruce Up and More
  • October – December: Holiday Shopping and More

There are two versions of the card — one with 0% on purchases for 12 months and 0% on balance transfers for 12 months, and then the ongoing APR of 10.99% - 22.99% Variable; the other with 0% on purchases for 6 months and 0% on balance transfers for 18 months, and then the ongoing APR of 10.99% - 22.99% Variable. Both versions come with:

  • No foreign transaction fee or over-the-limit fee
  • No penalty APR
  • Free FICO score
  • Waived first late-payment fee

Discover it® 12:12Discover it® 6:18
Discover It Credit Card
Apply Now

on Discover's
secure website

Discover it Credit Card
Apply Now

on Discover's
secure website

Signing Promo
5% cash back in categories that change each quarter up to the quarterly maximum when you sign up.5% cash back in categories that change each quarter up to the quarterly maximum when you sign up.
APR
0% on purchases for 12 months and 0% on balance transfers for 12 months, and then the ongoing APR of 10.99% - 22.99% Variable0% on purchases for 6 months and 0% on balance transfers for 18 months, and then the ongoing APR of 10.99% - 22.99% Variable
Annual fee
$0$0
Details
  • 0% intro APR on purchases & balance transfers for 12 months—then a variable purchase APR applies, currently 10.99% – 22.99%. A 3% fee applies to each transferred balance.
  • Exclusive offer: Double all the cash back you've earned at the end of your 1st year—automatically.*
  • 5% cash back in categories that change each quarter like gas, restaurants and more—up to the quarterly maximum when you sign up.* 1% cash back on all other purchases.
  • New Freeze It℠ on/off switch lets you prevent new purchases, cash advances & balance transfers on misplaced cards in seconds by mobile app & online.*
  • Free FICO® Credit Score on statements, online & by mobile app.* And 100% U.S.-based service any time.
  • No annual fee. No overlimit fee. No foreign transaction fee. No late fee on first late payment & paying late won't raise your APR.*
  • Each Discover purchase is monitored. If it's unusual, you're alerted by e-mail, phone or text and never responsible for unauthorized purchases on your Discover card.
  • *See rates, rewards, free FICO® Credit Score terms & other info by clicking “Apply.”
  • 0% intro APR on balance transfers for 18 months—then a variable purchase APR applies, currently 10.99% – 22.99%. A 3% fee applies to each transferred balance.
  • Exclusive offer: Double all the cash back you've earned at the end of your 1st year—automatically.*
  • 5% cash back in categories that change each quarter like gas, restaurants and more—up to the quarterly maximum when you sign up.* 1% cash back on all other purchases.
  • New Freeze It℠ on/off switch lets you prevent new purchases, cash advances & balance transfers on misplaced cards in seconds by mobile app & online.*
  • Free FICO® Credit Score on statements, online & by mobile app.* And 100% U.S.-based service any time.
  • No annual fee. No overlimit fee. No foreign transaction fee. No late fee on first late payment & paying late won't raise your APR.*
  • Each Discover purchase is monitored. If it's unusual, you're alerted by e-mail, phone or text and never responsible for unauthorized purchases on your Discover card.
  • *See rates, rewards, free FICO® Credit Score terms & other info by clicking “Apply.”

Let’s compare Discover it® 12:12 to other cards out there.

When to use the Discover it® 12:12

One of the best things about the Discover it® 12:12 is the Discover Deals online bonus mall, which gives 5 to 20% cash back on popular online retailers, from Apple (5%) to ProFlowers (20%). In our comparison of online rewards malls, Discover trumps Chase’s Ultimate Rewards Mall and Citi’s Bonus Cash Center.

The next-best part of the Discover it® 12:12 is the bonus category for the fourth quarter. Historically, it includes online shopping, so you can get great rewards on all of your holiday gifts. If you stack this on top of Discover Deals promotions, you’ll net even more cash back.

And finally, the Discover it® 12:12 gives you free access to your FICO score and prints it on your monthly statement.

Discover it® 12:12 vs. cash-back credit cards

The Discover it® 12:12 is up against a series of 5% cash back heavyweights — like the Chase Freedom®  and U.S. Bank Cash+™ Visa Signature® Card — as well as some pretty stellar flat rewards rate cards.

Discover it® 12:12 vs. U.S. Bank Cash+™ Visa Signature® Card

If you want to choose your 5% categories, the U.S. Bank Cash+™ Visa Signature® Card is a great option. It offers  5% back on up to $2,000 in spending per quarter in two spending categories of your choice. The available bonus categories change each quarter. It also offers an unlimited 2% back on an everyday purchase category — like gas or groceries — and 1% back on everything else.

The U.S. Bank Cash+™ Visa Signature® Card’s annual fee is $0. It’s a great option if you don’t spend according to Discover’s bonus categories, and would rather choose your own.

Discover it® 12:12 vs. Chase Freedom®

The Chase Freedom® is a bit more traditional. It offers a sign-up bonus: Earn a $100 Bonus after you spend $500 on purchases in your first 3 months from account opening And like the Discover it® 12:12, it has 5% bonus categories that change quarterly. Here’s the 2015 bonus schedule:

Chase Freedom®
Rewards limit 5% rewards capped at $1,500 per quarter
Jan-Mar Grocery stores, movie theaters and Starbucks stores
Apr-Jun Restaurants and more
Jul-Sep Gas stations and more
Oct-Dec Amazon.com and more

 

There’s a case to be made for both the Chase Freedom® and the Discover it® 12:12. In the end, it will come down to your spending habits — think carefully about which bonus category schedule best fits your needs.

If it’s an option, you could get the Chase Freedom® and the Discover it® 12:12. They’ll both come in handy in the 4th quarter for holiday shopping. After that, you’re probably better off leaning on the Chase Freedom® for everyday use and turning to the Discover it® 12:12 for access to Discover Deals.

Discover it® 12:12 vs. Citi®Double Cash Card

Rotating bonus categories can be great, but if you’re looking for a card with a high, ongoing rewards rate, it doesn’t get much better than the Citi®Double Cash Card. You’ll earn 1% cash back on all your purchases, then an additional 1% cash back when you pay them off. This means that if you’re paying your balance in full every month, you can expect to reliably earn cash back at one of the highest levels out there for credit cards, without spending caps.

The Citi®Double Cash Card has an annual fee of $0, no foreign transaction fees and an introductory APR of 0% for 15 months on purchases and balance transfers, and then the ongoing APR of 12.99% - 22.99% Variable .

Discover it® 12:12 vs. low APR credit cards

Discover it® 12:12 vs. Citi Simplicity® Card

If you’re looking for a low-interest credit card, the Discover it® 12:12 isn’t your best option. The card with the longest 0% APR period is the Citi Simplicity® Card, which offers 0% for 21 months on purchases and balance transfers, and then the ongoing APR of 12.99% - 22.99% Variable . It also has no penalty APR and no late fees — ever. The Discover it® 12:12 does earn rewards, while the Citi Simplicity® Card doesn’t, but if you’re going to carry a balance, rewards rate shouldn’t be your focus.

Discover it® 12:12 vs. Chase Slate®

For an affordable balance transfer, the Chase Slate® can’t be beat. It offers 0% Intro APR for 15 months on purchases and balance transfers, and then the ongoing APR of 12.99% - 22.99% Variable. But the best thing about this card is that all balance transfers made in the first 60 days of opening your account are free. By contrast, the Discover it® 12:12 has a 3% transfer rate.

Erin El Issa is a staff writer covering personal finance for NerdWallet. Follow her on Twitter @Erin_Lindsay17 and on Google+.


Image via iStock.

  • BigD

    Hey Nerdwallet, glad you got your act together and are writing articles more professionally. Kudos!

  • disqus_bOdq3A9HUV

    In comparing the It with the Forward, how in the world is some sign up bonus a tie with no sign up bonus??? That literally makes no sense whatsoever. Those 10,000 points can be worth up to $100, depending on how they’re redeemed.

  • http://twitter.com/_ArcTic_FiRe Tom@L

    true. Citi forward’s 10,000 thank you points is equal to $100 signup bonus.

  • stanolshefski

    As of September 2012, the Cii Forward no longer has a cap on points per year.

    • http://www.nerdwallet.com/ NerdWallet

      Hi there,

      The Citi Forward card still shows a 75,000 annual ThankYou Points cap – check out the terms here: https://www.citicards.com/cards/wv/cardDetail.do?screenID=960&contentId=BV46EZG .

      Thanks for using our site!

      • stanolshefski

        I have the card and I can tell you that the terms have changed. Many Fatwallet members are reporting the sme change in terms.

        • http://www.nerdwallet.com/ NerdWallet

          Hey Stan,

          You’re completely right. We obtained a copy of a Citi Forward cardholder agreement, which states:

          Earn at least 1 ThankYou Point for every $1 spent on all eligible purchases.

          Earn, on average, 4 extra points for every $1 you spend when you shop through the ThankYou® Bonus Center, a network of your favorite retailers, at thankyou.com.

          There is no limit to the amount of points you can earn.

          We’ll be sure to update our info on the blog – it’s a shame it’s no longer being offered, but we hope it’ll find its way back soon.

          Thanks again for the tip,
          The Nerds

          • stanolshefski
          • http://www.nerdwallet.com/ NerdWallet

            Hi Stan,

            Unfortunately, the only version available is the one you mentioned here – the college student version. While still a good option for students (you earn 5 points per $1 on fast food and bars, after all), the Citi Forward for Students is a step down from the no-longer-available adult version. It doesn’t earn 5x rewards on bookstores – which means it doesn’t earn 5x rewards on Amazon.

            It’s a shame – the adult Forward used to be one of the better cards out there for urbanites, and we hope it’ll return.

            Cheers,
            Team NerdWallet

          • stanolshefski

            It says bookstores on that page:

            “5 ThankYou Points for every $1 spent on purchases at restaurants (including fast food), bookstores, music stores, video rental stores and movie theaters; 1 ThankYou Point for every $1 spent on all other purchases2″

          • Alex’s Experiences

            Yes it gets the 5x on bookstores, I have a student and a regular (don’t ask…) both get the reward.

  • http://Techderp.net/ Moscato SugarRush

    I know this is a dated post, but it’s missing something really critical

    The biggest advantage the Discover card has, is access to cashdiscover, which by a longshot is the best cashback shopping mall, period.

    The chase freedom does have a nice signup bonus, but in the longrun, if you use shopdiscover, discover can winout.

  • http://www.doctorofcredit.com/ doctorofcredit

    There is a $150 sign up bonus with $750 spend if you use specific links.

  • Hinrg4me

    Note that Discover has a number of options for redeeming $20 cashback for $25 gift cards, like at Bed Bath & Beyond. That can put your 5% earning at an effective 6.25% if you can make use of the gift cards…