Discover it® Cash Back card benefits guide

If you’re looking for a cash back credit card with no annual fee, you’ve likely considered the Discover it® Cash Back. One of the most popular rotating bonus category cards, the Discover it® Cash Back offers 5 percent back on your first $1,500 in spending in bonus categories that rotate each quarter (upon activation; you’ll earn 1 percent back after that).

But cash back isn’t the only benefit of the Discover it® Cash Back. The card also boasts a potentially lucrative welcome bonus, flexible redemption and limited fees, charging no annual or foreign transaction fees and no fee or penalty APR on your first late payment (you’ll face an up to $41 fee for all late payments after that).

Here’s a closer look at the card’s offerings and how you can make the most of them.

Discover it® Cash Back card benefits

One of the most obvious benefits of the Discover it® Cash Back is its generous rewards rate in a mix of everyday spending categories. It also stands out for its unique welcome bonus, which matches all the rewards you’ve earned at the end of your first year. The card also boasts a lengthy introductory APR offer and consumer protection tools for cardholders.

Rewards benefits

High earning opportunities

The Discover it® Cash Back offers an impressive rewards rate in several rotating bonus categories. After you activate the quarterly bonus category, you’ll earn 5 percent back on the first $1,500 you spend in that category each quarter, after which the rate drops to 1 percent. You’ll also earn 1 percent back on all other purchases.

The Discover 5 percent cash back calendar outlines the card’s bonus categories each quarter, and they tend to remain relatively consistent from year to year. In the past, the calendar has included the following bonus categories, among many others:

• Grocery stores
• Drug stores
• Gas stations
• Wholesale clubs
• Restaurants
• PayPal
• Walmart.com

While it’s only available in each category for one quarter and is limited to your first $1,500 in purchases, this rate is easily one of the best you can get in many of these bonus categories. Most other cards only offer 2 to 3 percent back in categories like these, so depending on how much you spend, the Discover it Cash Back card’s rewards rate could offer more value despite its quarterly limits.

“I’ve squeezed great value out of the card’s online shopping categories, in particular, in years past,” says Nouri Zarrugh, Senior Credit Cards Editor at Bankrate and longtime Discover it Cash Back cardholder.

Cashback Match

In addition, instead of offering a traditional welcome bonus that requires you to meet a minimum spending requirement, Discover will match all the rewards you earn at the end of your first year with its Cashback Match program.

If you max out the $1,500 limit in your 5 percent cash back categories, you’ll earn $75 cash back per quarter or $300 in cash back per year. With the Cashback Match at the end of the first year, you’ll earn another $300 for a total of $600 back. General purchases also earn 1 percent cash back and can increase the size of your Cashback Match.

Since the Cashback Match is unlimited, the Discover it Cash Back card’s bonus may be more valuable than the bonuses you’ll find on other no-annual-fee cash back cards (typically around $200 with a $500 to $1,500 spend requirement in your first three months).

Flexible redemption

Once you start racking up Discover rewards, you can redeem them in the way that suits you best, including as cash deposited into a bank account, a statement credit, gift cards, charitable donations to select charities or even payments toward Amazon.com and PayPal.com checkout purchases.

You can also redeem rewards for cash back or a statement credit on your account in any amount, even if you only have a few dollars in rewards to burn. Having this kind of flexibility in a rewards program means you’ll never get stuck with rewards you can’t use.

Introductory APR benefits

Another neat benefit of the card is its 0 percent introductory APR. You’ll pay no interest for your first 15 months on both purchases and qualifying balance transfers (after which a 17.74 percent to 27.74 percent variable APR applies). While this is much shorter than the intro APR period you’ll find on dedicated balance transfer and zero-interest cards, it’s impressive for a no-annual-fee cash back card. Many competing cards also only offer a lengthy intro APR on purchases or balance transfers — not both. Using the card strategically, you could not only earn a top-notch cash back rate on purchases, but also pay them off over time while minimizing interest.

The cost of transferring a balance is also relatively low. While the card charges an intro balance transfer fee of 3 percent  — which can increase to 5 percent on future balance transfers on your Discover card (see terms) — this is about as low as balance transfer fees get in today’s market. Many competing cash back and balance transfer cards charge a 5 percent fee right from the start.

Plus, depending on how much debt you need to pay off, a card with a short intro APR period and low balance transfer fee could save you more overall than a card with a high balance transfer fee and longer intro APR period.

Other benefits

No fee for the first late payment

Normally, if you make a late payment on a credit card, you’ll face a late fee, penalty APR or both. With the Discover it Cash Back card, there’s no penalty APR for late payments and no penalty fee for the first time you make a late payment (though Discover charges up to a $41 fee for all late payments after that). This forgiving fee structure may make the card a better fit if you’re still new to credit cards or have had a hard time managing due dates in the past.

“One of the downsides of carrying a wallet full of cards and constantly switching back and forth between them, like I do, is that payment due dates can be tough to juggle,” says Zarrugh. “When I missed my Discover card’s due date (the first and only time), I was so grateful I had a second chance to get things sorted.”

Identity and fraud protection benefits

Like most Discover credit cards, the Discover it Cash Back offers $0 Fraud Liability for unauthorized transactions or purchases, and if your card is lost or stolen, Discover can freeze your card to prevent additional transactions like purchases and cash advances. You can also opt into a service that monitors the dark web and malicious websites for your Social Security number.

Maximizing the Discover it Cash Back

To make the most of the Discover it Cash Back, be sure to activate your 5 percent cash back categories each quarter. Activating categories should only take a few clicks in your Discover online account management page or the Discover app, but you have to do it every quarter to access the full 5 percent rewards rate. You’ll only earn 1 percent back on purchases until you activate your quarterly bonus categories, and you can’t make up for missed rewards if you forget to activate at the beginning of a quarter.

Also keep an eye on the changing Discover it Cash Back calendar and which bonus categories apply in any given month. Note that these categories are announced one quarter at a time, so you’ll have to check in to see what they are throughout the year.

Since the Discover it Cash Back caps bonus rewards each quarter and only offers 1 percent back on other spending, you may want to pair it with another cash back credit card for other purchases. Consider getting a credit card that offers 2 percent cash rewards on everything you buy, such as the Wells Fargo Active Cash® Card.

Finally, remember that this card’s intro APR offer only applies for a limited time and that you’ll have to pay the high variable APR after that. Take advantage of the intro offer if you need to, but make sure your balance is paid down to $0 or close to it before it ends.

The bottom line

Discover it Cash Back benefits are wide and varied, but the biggest perks you’ll get with this card come in the form of the rewards you earn. The card carries one of the best rewards rates you can get in an array of popular spending categories, and that’s especially valuable during your first year thanks to Discover’s Cashback Match offer.

That said, it never hurts to compare other cash back credit cards before you apply. You can also pair up a few different rewards credit cards so you’re earning the optimal amount of cash back for each dollar you spend.