Discover it® Cash Back Review: Earn Rotating 5% in Top Categories

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If you’re the type of person who cycles through the credit cards in your wallet to get the best deal, you can earn some serious cash bonuses by including the Discover it® Cash Back card in your rotation.

This Discover card offers a revolving 5% cash back in various popular spending categories, no annual fees and an introductory APR period for new cardholders.

Plus, Discover will match your first year of cash back earnings dollar-for-dollar after 12 billing cycles. That’s a potentially huge bonus if you make this your everyday spender.

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Team Clark has spent time reviewing the cash back rewards credit card market. The Discover it Cash Back card is one of the options we evaluated. We determined that it is one of the best choices due to its combination of 5% cash back bonuses, a double cash bonus on all first-year purchases, no annual fee and an introductory APR offer.

As you’re making your decision on whether the Discover it card is a fit for you, please use Team Clark’s review of the card in conjunction with money expert Clark Howard’s 7 Rules for Using Credit Cards.

What Is the Discover it Cash Back Card?

The Discover it Cash Back card is a cash back rewards card that touts a revolving 5% cash back bonus that changes spending categories approximately every three months.

In addition to the 5% cash back categories, this card also offers 1% cash back on all other purchases. At the end of your first year as a new cardholder, Discover gives a one-time dollar-for-dollar match on the cash back earned during your first 12 billing cycles.

The card carries no annual fee and offers an introductory 0% APR on purchases and balance transfers for the first 14 months of card membership. Afterwards, the variable APR will be 12.24% to 23.24%, based on creditworthiness, along with up to a 5% fee.

Discover it Cash Back: Card Specs and Perks

Before we get too far into whether or not this cash back card is the right choice for you, let’s take a look at some of the perks and drawbacks of the card from the fine print:

Bonuses and Perks

  • Rotating 5% Cash Back Bonus: Discover runs four 5% cash back campaigns per year, each featuring a different spending category. You have to opt in to participate, but Discover will send you an email reminder and it’s as simple as clicking a button on the website. The cash back on these is limited to $1,500 in purchases per period. If you’re going to make the most of this card, you’ll want to make sure you stay on top of enrolling for these every three months. More on this later in the article.
  • Cash Back Match: One of Discover’s top marketing pieces for this card is a real value. You will receive a one-time match of all the cash back you earned after your first year of card membership. This happens automatically, and will come as a cash back credit to your account after the first 12 billing cycles. For example, if you earned $300 in cash back during year one as a card holder, you would qualify for an additional $300 credit. Your card account must remain open to receive this match.
  • Introductory 0% APR: Discover advertises a 0% introductory APR on purchases and balance transfers for the first 14 months of card membership. Afterwards, the variable APR will be 12.24% to 23.24, based on creditworthiness, along with up to a 5% fee.
  • No Annual Fee: This is actually a nice perk for a card that offers regular 5% cash back bonuses. Many of the cards in the cash back space make annual fees a part of the game, which lowers the amount you’re actually saving in the long run.

Cardholder Benefits

  • Free FICO Score: You will receive monthly notification emails when you have a new FICO score available. Your latest score is available on your bill and at any time via your online account or app.
  • $0 Fraud Liability: Discover does not hold cardholders liable for unauthorized purchases.
  • Free Social Security Number Alerts: If you opt in to this program, you can receive a notification if your social security number is spotted on “thousands of Dark Web sites.” This service also includes daily monitoring of your Experian credit report to alert when there is a new account or inquiry created.
  • Free Overnight Shipping on Lost Card Replacements: This is a handy perk, especially if you have a card turn up lost or stolen while traveling. Being able to get a new card the next day could be a trip-saver.

Cardholder Fees

There is no annual fee for being a Discover it cardholder, but you may still incur some fees along the way.


Here’s a quick look at some of the fees you may encounter:

  • Late Fees: These are up to $40 each, but there is no late fee for your first missed payment. It’s also worth noting that your APR will not go up due to paying late. These are a couple of nice acts of forgiveness from Discover.
  • Balance Transfer Fees: The standard rate is 5% of the amount on each transfer, but new cardmembers may be offered an introductory rate at 3% for a period of time.
  • Cash Advance Fees: These are whichever amount is greater between $10 or 5% of the cash advance amount.

How the Discover it 5% Cash Back Program Works

Discover rotates your opportunity to earn 5% cash back to four different categories each year.

These categories typically are announced for an entire year all at once (the 2020 schedule was posted in November 2019, for example). Even though you’ll know the categories in advance, they require some action from you as a cardholder. You’ll have to opt into each category individually.

Here is what you need to know about how the process works:

  • There are four separate cash back bonus offerings each year. They run for three months each and span through all 12 months, so there’s a chance to earn 5% cash back the whole year. Each period has a different spending area of emphasis, such as restaurants or grocery stores.
  • You are not automatically enrolled. That means it will be your responsibility to ensure that you’re getting the 5% cash back by opting into the program each quarter. It’s actually pretty simple. You’ll get reminder emails and it takes one click on the website or app to enroll.
  • These bonuses cap at $1,500 in spending per cash back period. That means the maximum 5% cashback you can earn in a given category is $75. After that, you would return to earning 1% on purchases in that category.
  • These rewards can be redeemed at any time. They are credited to your cash back balance at the end of the term and can be used as statement credits or a means of payment. The cash back rewards do not expire, so you can bank them up for a big purchase if you’d like.

Discover it Cash Back vs. Citi® Double Cash Card – 18 month BT offer: Which Will Earn You More Cash Back?

At this point, you’re probably wondering if signing up for a card that rotates 5% but otherwise gives 1% cash back is any better than using a card with a more stable cash back rate.

The answer to that lies in the amount of money you spend and the types of goods you purchase, but let’s try to put a visual on it.

We’ll use the Citi® Double Cash Card – 18 month BT offer as a good comparison card for this exercise. It carries an automatic 2% cash back bonus for all purchases (1% as you buy, 1% after you pay for those purchases). It’s also one of money expert Clark Howard’s favorites in the cash back category.

Spending Comparison

If you want to compare using these as everyday spending cards for all your purchases, the number you’ll want to keep in mind is 25%.

If you are spending at least 25% of your money in Discover’s 5% cash back category, you are going to come out equal or better than getting 2% from the Citi Double Cash.

For example, if you spend $1,000 with the Citi Double Cash, you’re going to earn $20 in cash back once you pay the balance. Let’s compare that to what you can make when spending $1,000 with the Discover card.


I have created a chart to illustrate spending with the Discover card and how the cash back total is impacted by the percentage you spend in a 5% category.

The first column shows the percentage of $1,000 spending at 5% cash back. For 10%, that would be $100.

The second column shows the amount of cash back earned. The first number is 5% bonus cash back, the second number is the 1% cash back for other purchases and the third number is the total. You’ll notice that 25% of spending at 5% produces a total of $20 cash back, which matches what the Citi card is giving 2% on all purchases.

$1,000 Spending with Discover it Cash Back

% of $1,000 Spending at 5% Cash BackDiscover it Cash Back Earnings
10%$5 + $9 = $14
15%$7.50 + $8.50 = $16
20%$10 + $8 = $18
25%$12.50 + $7.50 = $20
30%$15 + $7 = $22
35%$17.50 + $6.50 = $24
40%$20 + $6 = $26

This table is not the end of the story, though.

Since the Discover 5% promotion is going to be an ever-changing spending category, it’s hard to forecast an individual’s utilization of that bonus from quarter to quarter. And we must remember that Discover caps the 5% cash back bonus at $1,500 in spending for each quarter. Anything beyond that will earn 1% cash back, even though it’s in the special spending category.

For optimal cash back rewards, you could try to utilize both of these cards. You can take advantage of Discover’s 5% categories while also earning 2% on the rest of your purchases with the Citi card.

Note: The numbers in this comparison do not include the one-time cash back match bonus that Discover grants after 12 billing cycles. Make sure you factor that into your equation for year one if you’re doing some math on your own.

Acceptance Rates

One final thing to consider is the acceptance rate for Discover vs. Citi (which processes transactions through Mastercard).

Traditionally there has been a concern about the acceptance rate for Discover, which ranks third in the United States behind Visa and Mastercard as far as locations where it is accepted according to Experian.

However, as of 2020, Discover says it is now accepted by 99% of U.S. merchants that accept credit cards. While the edge in this area still rests with Citi, the gap is not as large as it once was.


Final Thoughts

Are you considering adding the Discover it Cash Back card to your wallet? Let’s review some of the pros and cons of the card before you make your final decision:

Discover it Cash Back: Pros and Cons

Pros Cons
Rotating 5% cash back categories Only 1% cash back on non-featured categories
Double cash back bonus for first year Caps 5% cash back earnings at $1,500 per quarter
No annual fee and introductory APR Discover has lower U.S. merchant acceptance rate than Visa and Mastercard

Bottom Line: The Discover it Cash Back card offers a nice blend of some of the top features you may be looking for in a cash back credit card. It does not have an annual fee, does have an introductory APR period, offers 5% cash back perks and has a cash back bonus match after one year of spending.

While there are likely cards that can match or beat it in one more of those areas, the fact that it is competitive in so many of them makes it a strong option for many people.

Check our review of the top cash back credit cards to make sure you’re picking the right card for you based on your spending habits.

Do you have experience with the Discover it Cash Back card? Let us know how you like it in the comments below!

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