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A variety of credit cards fall under the 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.
What the cards have in common
The Discover it® Miles and Discover it® Cash Back share a lot of similarities, like:
Neither card has an annual fee.
Neither card charges foreign transaction fees.
Rewards earned on both cards are higher during the first year.
Both cards offer $0 fraud liability.
You can freeze your account at any time with either card.
Both include U.S.-based customer service.
About the Discover it® Miles credit card
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.
To sweeten the deal for the first year, new cardholders will effectively earn 3 miles per $1 spent instead of 1.5 miles per dollar spent. This program is called Discover Match®, and new cardholders are automatically enrolled.
This makes the card one of the most attractive ones 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.
A statement credit for travel purchases made within the last 180 days.
Cash as an electronic deposit to your bank account.
About the Discover it® Cash Back
The earning structure of the Discover it® Cash Back is more involved. The Discover it® Cash Back earns 1% on all purchases, but also has rotating bonus categories: Once you sign up, 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%. Note that you have to activate these earning rates each quarter.
Similar to the Discover Match® program, new cardholders of the Discover it® Cash Back card earn higher rewards for one year through the Cashback Match™ program. That means new cardholders will effectively get 10% cash back in the rotating quarterly bonus categories for the first year rather than 5%.
The rotating bonus categories for 2021 are as follows:
January - March: Grocery stores, Walgreens and CVS.
April - June: Gas stations, wholesale clubs and select streaming services.
July - September: Restaurants and PayPal.
October - December: Amazon.com, Walmart.com and Target.com.
You can see that these bonus categories are not at obscure niche retailers, so if you spend enough, you could easily max out your earnings.
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 $5 in rewards.
Which card is right for you?
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. Decide how much you're likely to spend each year, particularly in the rotating bonus categories. 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 2021, including those best for:
Flexibility, point transfers and a large bonus: Chase Sapphire Preferred® Card
No annual fee: Bank of America® Travel Rewards credit card
Flat-rate travel rewards: Capital One Venture Rewards Credit Card
Bonus travel rewards and high-end perks: Chase Sapphire Reserve®
Luxury perks: The Platinum Card® from American Express
Business travelers: Ink Business Preferred® Credit Card