Comparing the Discover it Miles vs. Discover it Cash

Dan MillerFebruary 6, 2020
On a similar note...
On a similar note...

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A variety of credit cards fall under their Discover brand, including student cards, secured credit cards and business cards. Those considering the Discover it® Miles may also have their eyes on the Discover it® Cash Back. Here are the pros and cons of each card to help you decide which one might be right for you.

Common features of Discover it® Miles and Discover it® Cash Back

The Discover it® Miles and Discover it® Cash Back share a lot of similarities. Neither card has an annual fee or a foreign transaction fee, and rewards earned on both cards get doubled during the first year.

Both cards also offer $0 fraud liability, the ability to freeze your account at any time and U.S.-based customer service.

Discover it® Miles

While the Discover it® Cash Back and Discover it® Miles are quite similar, the main difference is how you earn and redeem your rewards.

The Discover it® Miles has the simpler of the two earning structures. It earns 1.5 miles per $1 spent on everything; no need to worry about category bonuses.

On both of these cards, Discover will double your rewards for the first year, meaning that you’ll actually earn 3 miles per $1 spent the first year. That makes this one of the most attractive cards out there, especially when compared to a 2% cash back card like the Citi® Double Cash Card – 18 month BT offer.

On the redeeming miles side, it gets a little bit more complicated. There are two different ways that you can redeem the miles that you earn with the Discover it® Miles card. The first option is to use them as a statement credit for travel purchases made within the last 180 days.

The other option is to redeem miles for cash as an electronic deposit to your bank account.

Discover it® Cash Back

The earning structure of the Discover it® Cash Back is slightly more involved. The Discover it® Cash Back earns 1% on all purchases, but also has rotating bonus categories where you can earn 5% in rewards on the first $1,500 in purchases made for the quarter. Any purchases over $1,500 only earn 1%. You must opt in to the program.

Again, rewards are doubled during the first year, meaning you can earn 10% cash back in the rotating quarterly bonus categories.

The rotating bonus categories for 2020 are as follows:

  • January - March: Grocery stores, Walgreens and CVS.

  • April - June: Gas stations, Uber, Lyft and wholesale clubs.

  • July - September: Restaurants and PayPal.

  • October - December: Amazon.com, Walmart.com and Target.com.

You can see that these 5% bonus categories are not at obscure niche retailers, so if you spend enough you could easily max out the 5%.

On the redemption side, you can redeem rewards in any amount as a statement credit or an electronic deposit to your bank account. You can also donate cash back rewards to charity or use them to pay at select merchants. Buying gift cards or e-certificates is also an option, though you must have a minimum of $20 in rewards.

Which card is best?

If you are trying to decide between the Discover it® Miles and Discover it® Cash Back, there are a couple of different factors to consider.

Their redemption structures are fairly similar. In both cases you can transfer rewards to your bank account or statement credit (though the Discover it® Miles statement credit is limited to travel purchases).

The real differentiator comes from their earning ability. To decide between these two cards, you’ll want to decide how much you are likely to spend each year and how much of that will be in the rotating bonus categories. Let’s look through a couple of different scenarios that might help you decide. In each scenario we'll ignore the fact that your rewards for the first year are doubled, since that is a feature of both cards.

$10,000 non-bonus category spending per year

The Discover it® Cash Back earns $100 and Discover it® Miles earns $150.

Winner: Discover it® Miles.

$10,000/year spent + maximizing bonus categories each quarter ($1,500 spent each quarter)

The Discover it® Cash Back earns $400 and Discover it® Miles $150.

Winner: Discover it® Cash Back.

The breakeven point for $10,000 in yearly spend comes when you spend just $1,250 in the quarterly bonus categories. In that case, the Discover it® Cash Back would earn you more rewards.

If you don’t think you would spend that much in the bonus categories or if you prefer a simpler earning structure, go for the Discover it® Miles.

How to Maximize Your Rewards

You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2020, including those best for:

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