Which Is Better: Discover it Cash Back Card or Discover it Miles?

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Now that Discover has introduced the new Discover it Miles card, many folks are wondering whether they should get it over the Discover it Cash Back card.

Which Is Better Discover It Cash Back Card Or Discover It Miles

Which Discover it Card Is Best for You?

Let’s compare both cards.

Discover it Cash Back

Link:   Discover it Cash Back

With the Discover it Cash Back card, you get 1% back on every purchase and 5% back (up to $1,500 in purchases) every 3 months on rotating categories (when you register) with no annual fee.

And you pay NO foreign transaction fees when you use the Discover it Cash Back card outside the US.

Currently, you can get a $100 Amazon digital gift card when you spend $500 in purchases in the 1st 3 months of account opening.

Note:   This offer is for 1st time cardholders and NOT available on the Discover home page.

Which Is Better Discover It Cash Back Card Or Discover It Miles

$100 Amazon Gift Card Sign-Up Bonus on the Discover it Card

Emily and I don’t earn a commission for this card but we always tell you about the best offers because of the mother-in-law rule!

Discover it Miles

Link:   Discover it Miles

Link:   My review of the Discover it Miles card 

You get 1.5 miles (or 1.5% back) on all purchases (doubled the 1st 12 months), up to $30 credit for in-flight Wi-Fi purchases, and pay no annual fee with the Discover it Miles card.

This is a great card because it is the only card that earns effectively unlimited 3% back on everything for the 1st 12 months!

And you can redeem miles against travel purchases made within the past 180 days.

Which Is Better Discover It Cash Back Card Or Discover It Miles

Reimburse Your Hotel Room Costs Using Discover it Miles

Which Discover it Card Is Right for You?

Both cards:

  • Earn cash back, or miles that can be redeemed for cash
  • Have no annual fees
  • Have no foreign transaction fees
  • Give you a free FICO Score

Although, there are a few slight differences between the two cards:

CardSign-up BonusHow You Earn Cash BackDouble Miles - 1st YearUp to $30 Back Each Year for In-Flight Wi-FiRedeem Cash Back for Any Amount, Any TimeRedeem Miles Against Travel PurchasesUse Cash Back at Amazon.comOverlimit FeeFree FICO Credit ScoreAnnual FeeForeign Transaction Fee
Discover It Cash$100 Amazon digital card1% on all purchases; 5% on rotating categories every 3 months (registration required)NoNoYesNoYesNoYes$0$0
Discover It Miles$01.5% on all purchasesYesYesYesYesNoYesYes$0$0
 

But folks who want to earn the most back should get the Discover It Cash Back card.  That’s because each quarter you can earn 5% back (worth $75 back on up to $1,500 in purchases) in the bonus categories.

So if you spend $10,000 a year with your Discover It Cash Back card and maximize your 5% cash back each quarter, you’ll earn $340 back. (Because you get $300 back for spending $1,500 in the 5% bonus categories each quarter.  Plus $40 for earning 1% back on the other $4,000 you spent.)

Which Is Better Discover It Cash Back Card Or Discover It Miles

The Discover it Cash Back Card Is Good for Folks Who Will Take Advantage of the 5X Bonus Categories Each Quarter

Using the same example of spending $10,000, with the Discover it Miles card, you’d get $300 back your 1st year (3% back the 1st year).  But only the regular 1.5% back in the 2nd and subsequent years ($150 cash back in years 2 and onward).

Although, you’ll get less back, the Discover it Miles card is better for folks who don’t like to fuss with remembering the rotating 5% back categories.

And with the Discover it Miles card, you get up to $30 back for in-flight Wi-Fi purchases each card anniversary year.

So if you’re NOT going to maximize the 5% quarterly bonus categories with the Discover it Cash Back card, then the Discover it Miles card might be the better option for you.   Because you get 1.5% back instead of the 1% back with the Discover it Cash Back Card.

Which Is Better Discover It Cash Back Card Or Discover It Miles

The Discover it Miles Card Doubles Your Miles at the End of Your 1st Year, for Effectively 3% Back on All Purchases

Another Alternative

Link:   Chase Freedom

However, I prefer the Chase Freedom over the Discover It Cash Back and Discover It Miles card.

That’s because you can get a $100 sign-up bonus, 5% cash back (or 5X Chase Ultimate Rewards points) rotating bonus categories, and can transfer Chase Ultimate Rewards points to partner airlines and hotels:

 Chase Ultimate Rewards Airline Transfer Partners 
British AirwaysFlying Blue (Air France/KLM)Korean Air
Singapore AirlinesSouthwestUnited Airlines
Virgin Atlantic
 Chase Ultimate Rewards Hotel Transfer Partners 
HyattIHGMarriott
Ritz-Carlton

when have 1 of these cards: Chase Sapphire Preferred, Ink Plus, or Ink Bold.

Or you can use the Chase Freedom as a cash back card if you want.  Plus with no annual fee, it’s a great card to keep to build your relationship with Chase (which has lots of great miles & points cards).

Of course, you could get both a Chase Freedom AND a Discover it card!

But I would NOT recommend trying to get the 2 Discover cards at once.  Because usually banks will only allow you to get 1 new personal card at a time.

Bottom Line

Both the Discover it Cash Back and the Discover it Miles card give you free FICO scores with NO annual fees or foreign transaction fees.

Folks who want the most cash over the long run and will NOT be maximizing their 5% category bonuses should get the Discover it Miles card.  While folks who will maximize their bonuses will likely earn more back with the Discover it Cash Back card.

However, I prefer the Chase Freedom card over both cards.  That’s because you get a better sign-up bonus, earn 5% back on bonus categories each quarter, and earn cash back or Chase Ultimate Rewards points.

And Chase Ultimate Rewards points are transferrable to certain airlines and hotels if you have the Chase Sapphire Preferred, Ink Plus, or Ink Bold.

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11 responses to “Which Is Better: Discover it Cash Back Card or Discover it Miles?

  1. Seems to me that a big spender during year 1 will do substantially better with the miles card due to the doubling of 1.5% and the limit on the 5% on the cash card.

  2. All the bloggers are treating this like a 3% cash back card when it is not. The discover miles card is a travel miles card and ONLY travel expenses are redeemed at 1 mile=.01…if you read the T&C it states ” Redeem Miles: Starting at 1 Mile, you can redeem for cash as a electronic deposit to your bank account or for a credit for Travel Purchases on your statement made within in last 180 days. Travel Purchases include airline tickets, hotel rooms, car rentals, travel agents, online travel sites and commuter transportation.” The cash back they are talking about is a deposit to your bank account for travel expenses within the last 180 days…so buying a bunch of giftcards and hoping for 3% cashback at the end of the year ain’t gonna work.

  3. @Wise2u An excerpt from Discover It Miles info: “How do I Redeem My Miles?
    Visit Discover.com or call 1-800-347-3085 24 hours a day/7 days a week and choose how to redeem your Miles, including.
    Credit to your account for travel purchases-starting at 1 mile.
    Electronic deposit into an account you designate-starting at 1 mile.
    Any way you redeem, 1 Mile is the cash equivalent of 1 penny.”

    It appears that you can redeem for cash according to these terms.

  4. @wise2u Because it is cashback. I have the Miles card. You don’t need to have travel expenses to receive the cash back deposited into your bank account.

    TRAVEL
    Redeem in any amount to credit your travel purchases from the last 180 days.
    CASH
    Redeem at any time for a cash deposit to your bank account

  5. I believe you also have the option for a check or statement credit, just like on the It card.

  6. @wise2u. You’re incorrect. You can redeem for travel or just deposit it into your account

    With no sign up bonus unless your a big spender, I agree the discover it is better than discover miles. After year 1, it’s slightly better than the Capital one Quicksilver. If still go for the Citi DC with a mix of a few other cash back cards to get the most back. That’s just me though.

  7. James Peterson

    3% cashback is great. I’m currently manufacturing $5,000/month worth of spend through Target Redcards. 3% cashback of $5,000 on 1 Redcard is $150/month. I do it through 10 cards, and have been cashing out at over $1,000 per month. I got my cards from redcardresales. I believe they will pop up if you google them.

  8. @Dustin: so you have personally redeemed discover miles points for cash at 1 mile per .01?? with no travel expenses?
    Because every other travel mile card (Barclay arrival, Cap1 Venture, BOA travel) only allow that on travel charges like mentioned in the T&C I copied from the discover app. They all will allow straight cash redemptions, but at .005 per mile…which makes a huge difference!! until you or someone personally verifies that they have done it..(not just read about it on some blog) I find it hard to believe otherwise. I think I will call Discover for clarification tomorrow.

  9. @wise2u this link I pasted tells you what you can redeem for. It comes straight from Discover. You’ll see you can deposit into your checking account at 1 cent per mile. 1 mile = 1 cent

    https://www.discovercard.com/acquisitions/miles/terms.html

  10. wise2u: Yesterday I indeed redeemed my “miles” directly to my bank account at 1c per mile and NONE of my transaction were travel. It makes almost no sense that Discover Miles goes into details about what constitutes a travel expense when it actually gives the same exchange rate on all.
    But that is really what is happening.

  11. @Dustin thanks for the link with a phone number. I called it and talked to a Discover specialist about the specific redemption rates. She stated that cash statement credit or deposit to bank account without a qualifying Travel Category charge would be at the rate of 2 miles per .01
    So this card is exactly like all the other “travel miles” cards I mentioned above.!!
    I guess Milesuser got lucky?!? He’s right it doesn’t make sense that they would go into detail about what constitutes a travel expense when it actually gives the same exchange rate on all.
    If it were a 3% CASHBACK card it would be advertised as such, and for the first year it would crush its competitors. This is just another travel miles card with vague redemption terms that required a phone call to clarify.