Discover it Card Review

About 20 years ago, a small company now known as Discover became a player in the credit card industry by offering a credit card with generous credit limits and no annual fee, which was still uncommon at the time. Then, they upped the ante by offering customers a CashBack Bonus; Discover woud pay customers back a small percentage of every dollar they charged to the card.

Seems like old news. Today, every major bank offers some kind of cash back credit card. But this year, Discover will try to up the ante in the cash back rewards category again with the Discover it Card.

Presumably the Discover it Card will replace the Discover More card — for years Discover’s primary cash back product that paid an unlimited 1 percent cash back on purchases and up to 5 percent back in rotating categories — a model that competitors, like Chase Freedom, would ultimately follow.

But what makes the it Card different? Much is the same. There’s no annual fee, and cardmembers earn 1 percent cash back on most purchases plus 5 percent cash back in categories that change. Where Discover is attempting to differentiate itself is with 24/7 US-based customer service (Remember their clever ads featuring “Peggy”, the not-so-helpful foreign call center rep?) and some more lenient policies, such as no late fee for your first late payment, no overlimit fee, and no penalty APR (an increased interest rate after you make a late payment).

Discover it Card Rewards

The Discover it Card offers:

• 5 percent cash back on up to $1,500 in purchases in categories that change throughout the year like gas, restaurants, and department stores up to the quarterly maximum. (In 2013, the categories, according to Discover, are: Jan-Mar., restaurants and movies; Apr.-Jun., “spring style”; Jul.-Sep.,”summer fun”; Oct.-Dec.,”holiday shopping”.)
• An unlimited 1 percent cash back on all purchases.

Discover it Card Rates and Fees

The Discover it credit card is competitive with its interest rates, too, especially when compared directly to other cash back cards. As with all rewards cards, the regular APR range (based upon each applicant’s creditworthiness) is slightly higher than with a card without rewards):

Another version of the it Card offers an 18-month balance transfer period.

Other Advantages

The Discover it credit card’s rewards program and interest rates by themselves aren’t earth-shattering (in fact, they are almost identical to the outgoing Discover More card.) Discover’s hoping it can woo some new customers away from cards like the Chase Freedom card, BankAmericard cash rewards card, or Capital One Cash Rewards credit card by offering things they don’t (like the guaranteed U.S.-based customer service). Here’s a laundry list:

• 100% U.S. based customer service available any time
• No late fee for your first late payment
• Paying late won’t increase your APR
• No overlimit fee
• No foreign transaction fee
• Pay for millions of items with your rewards at Amazon.com
• Pay your bill ’til midnight (ET) the day it’s due by phone or online
• Choose your payment due date online or by phone
• Lower rate, lower payment or other help after job loss
• Automatic expedited delivery of your new card

Some of these “features” are simply things that any halfway-decent credit card company should do for you, like letting you change your due date or reducing your payment temporarily in the event you lose your job. Others are more helpful.

Eliminating the foreign transaction fee is something higher-end credit cards are doing more and more to please anybody who travels abroad, where the fees of between 2 and 4 percent of each purchase made in another currency can quickly add up. It’s a nice perk, but there’s a catch: Discover’s payment network is much smaller outside the United States than Visa, MasterCard, or even American Express. So this benefit has limited use.

Better features the it Card offer are no overlimit fee, no penalty APR, and the first late fee waived. These features compete directly with the Citi Simplicity Card, which offers even more generous payment terms but doesn’t pay rewards.

Is the Discover it Card right for you?

The bottom line is that the Discover it Card is a solid and versatile all-around credit card. The rewards program is about as solid as you can find without paying an annual fee and the APR range is competitive. If you get in a pinch and have to carry a balance, this wouldn’t be the worst card to use, either, just remember that a few months of carrying a balance at 12 or 20 percent quickly makes the rewards factor pointless — you’re paying more in interest than you earn in rewards.

Learn more or apply for the Discover it Card now

Disclaimer: Discover is a paid advertiser of MoneyUnder30.com. See our disclosures or Discover’s terms and conditions for more information.