This article is by Curtis Arnold, CardRatings.com editor-in-chief.
It's not often that a credit card company offers to double its usual rewards on a range of its plastic for an entire year — but that's precisely what Discover is doing for new customers with its current limited-time offer.
How the offer works
Discover's eye-catching offer applies to cash-back cards including:
- Discover it® card-Double Cash Back your first year,
- Discover it®-Double Cash Back your first year,
- Discover it® Chrome-Double Cash Back your first year,
- Discover it® for Students-Double Cash Back your first year,
- Discover it® Chrome for Students-Double Cash Back your first year,
- and even the new NHL® Discover it® Card.
Here's how it works: After the first 12 consecutive billing periods that your new account is open, Discover will double all the cash back rewards you've earned and apply them to your account in the next billing cycle. You've earned rewards when they have posted to your account by the end of the 12th consecutive billing period.
This could easily add up to hundreds of dollars, depending on the card you choose and your spending habits. For example, Discover it® card-New! Double Cash Back your first year ordinarily offers 5 percent cash back in categories that change each quarter (up to the quarterly maximum when you sign up) and 1 percent cash back on all other purchases. These rates are doubled through Discover's offer, the latter with no caps.
And cash means cash. As usual for those Discover products, you can redeem any amount at any time, and take your rewards as a card statement credit or as a direct deposit into your bank account.
How to earn double cash back
Every quarter, Discover publishes on its website a 5% Cashback Calendar featuring details of the categories of shopping that can earn you 5 percent cash back (or, under this offer, you can double your cash back) during that period.
So, for example, clothing stores, department stores and Amazon.com are categories for the current quarter (October 1, 2015, through December 31, 2015).
Discover has yet to announce bonus categories for the upcoming year, but the categories for the first quarter of this year were gas stations and ground transportation. These popular categories are likely to resurface in 2016.
To maximize your rewards, you need to remember three main things:
- You must sign up each quarter on the Discover website or through its call center. If you don't register, you run the risk of missing out on some serious cash-back potential, as you'll only earn 1 percent on all purchases — or double the cash back you've earned under this offer.
- There's a cap on the amount you can spend on purchases in those categories in any one quarter and still earn the bonus rate. You can only earn 5 percent cash back (or double the cash back you've earned with the current offer) up to the quarterly maximum, $1,500, when you sign up. You'll earn 1 percent cash back (or double the cash back you've earned with the current offer) on any purchases over that.
- Schedule your purchases around the bonus cash-back categories for maximum cash-back potential. For example, if you have been putting off a major Amazon.com purchase, such as a new television, you might be in a better financial situation for having waited to buy the item you need since Amazon.com is one of the categories this quarter.
More about it
All the aforementioned Discover it® cards offer similar features:
- No annual fee.
- Other fees are few: no foreign transaction fees, no overlimit fees, no late fee for your first late payment. Better yet, paying late won't increase your APR.
- The new Freeze ItSM on/off switch, which lets you prevent new purchases, cash advances and balance transfers on misplaced cards in seconds by mobile app & online. * Plus get 100% U.S.-based service.
- Free FICO® Credit Score on statements, online and by mobile app.
- 100 percent U.S.-based service any time.
Zero intro APR credit cards
Despite the extremely similar naming strategy, there are a few differences between Discover's cash back credit cards. All offer a zero-percent APR on both new purchases and balance transfers, for varying periods of time. Those more interested in paying off debt might consider Discover it®-Double Cash Back your first year, which provides a zero-percent introductory APR on balance transfers for 18 months (and 6 months for purchases), then a variable purchase APR applies, currently 10.99-22.99 percent, depending on your creditworthiness. Keep in mind that a 3 percent fee applies to each transferred balance.
Students get double rewards too
New customers applying for the Discover it® Chrome for Students card can also enjoy double cash back you've earned, and the five benefits listed above, which apply to all the aforementioned cards. However, the rewards are a little different.
There are no changing bonus shopping categories, and instead students get 2 percent cash back on up to $1,000 in combined purchases at restaurants and gas stations every quarter, and 1 percent cash back on all other purchases. Of course, under the current offer that means double your cash back earned during the first year.
As with the other cards, after the first 12 consecutive billing periods that your new account is open, Discover will double all the cash back rewards you've earned and apply them to your account in the next billing cycle. You've earned rewards when they have posted to your account by the end of the 12th consecutive billing period.
Always shop around
For people with the right needs, spending habits and shopping patterns, Discover's offer could be exceptionally generous. However, it is always a good idea to shop around to find the deal that best suits your spending patterns.
Compare issuers' terms for each card, as they may be similar to the terms the Discover it®-New! Double Cash Back card offers. For example, with the Chase Freedom® card, you can:
- Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate
- Enjoy new 5% categories every 3 months like gas stations, restaurants, and wholesale clubs
- Get unlimited 1% cash back on all other purchases
But with the Chase Freedom® card, you also get a $150 bonus after spending $500 on purchases in your first three months from account-opening.
Then there are cards that don't impose category restrictions on cash back earnings, like the Citi® Double Cash Card – 18 month BT offer, the only card that earns you cash back twice on every purchase with 1 percent cash back when you buy plus 1 percent cash back as you pay for those purchases, whether you pay in full or over time.
Not looking for a cash-back card?
There's no doubt Discover's double cash back offer is worth a look. However, if you find miles more appealing than cash back, you probably should take a look at Discover it® Miles-Double Miles your first year, which is offering double miles at the end of the first year after new cardholders open their accounts. The card regularly offers unlimited 1.5x Miles on every dollar you spend on purchases, so taking Discover up on its current offer means double all the miles you earned in the first year of card membership.
Visit CardRatings.com to learn about these limited time Discover credit card offers and to read a full review of Discover it card®-New! Double Cash Back your first year.
*See rates, rewards, FICO® Credit Score terms & other information.
Curtis Arnold, CardRatings.com founder and editor-in-chief, is a nationally recognized consumer educator and advocate, has been educating consumers about credit cards since 1998. Curtis is the author of “How You Can Profit from Credit Cards: Using Credit to Improve Your Financial Life and Bottom Line” (FT Press, 2008). He is regularly interviewed by respected members of the press.