Discover offers 4 main credit cards, all with no annual fee. Below is our ranking of the cards, with a few words about each to help you decide if it is right for you:
The Discover it Miles Card is the best Discover credit card for many consumers. Though it is marketed as a travel credit card, it’s really just a simple cash back card.
Here’s how it works: You get 1.5 “Miles” for each dollar you spend with the card. However, those miles are really just points that are worth a penny each. As an example, 10,000 “Miles” = $100 in rewards. You can use your miles/points to offset travel expenses you’ve paid for with the card, but you also can simply take them as cash, making this the equivalent of a 1.5% cash back card.
A nice bonus: At the end of the first year of having the card, all of the “miles” you’ve earned are doubled, which means you actually get a 3% rebate on your first year’s purchases, assuming you hold the card for that long (and we don’t know why you wouldn’t).
Compare with: the best cash back credit cards or “true” travel credit cards.
Discover it Card – Discover’s flagship credit card is a cash back card that gives you a 5% rebate on certain shopping categories (on up to $1500 per quarter in purchases in those categories combined) and 1% on everything else you buy with the card. The 5% categories change each calendar quarter. (See the current 5% category calendar here.)
This card also offers a first-year bonus that effectively doubles all of the rewards you earn in Year 1.
While this card is a favorite “starter” card for people who don’t have much credit history, it’s best as a complementary card if you are seeking good cash-back rewards, because other than the 5% category opportunities, all of your other purchases get you a low 1% rebate. It’s best to pair this with one of the best cash-back cards for everyday use, perhaps a 2% cash back card.
Discover it Chrome – While this cash-back card is marketed as a “Gas and Restaurant” credit card, the rewards are extremely modest, and this card is usually only appealing to people that can’t be approved for a better cash-back card elsewhere due to having a lower credit score. This one gives you 2% cash back on restaurant and gas purchases (on up to $1000 in these purchases per quarter, then the rebate goes down to 1%) and 1% on all other card purchases. Like the cards above, first-year rebates are doubled at the end of 12 months.
Compare this to the best cash back credit cards and/or the best gas credit cards, and you’ll find that getting more than 2% on gas and restaurant purchases is fairly easy to do with other cards.
Discover it Secured Card – For those who need to “build or rebuild” their credit because of past credit problems or lack of a credit history, this is our favorite secured credit card on the market. Why? Because it has the reputation of having the fastest “graduation” path to a standard, unsecured credit card.
Here’s how it works: You put down a refundable security deposit to get the card, and you get a credit limit equal to that deposit. You then use the card like any other credit card, making your payments each month. Your payment does NOT come from the security deposit; you get the security deposit back when you no longer want the card (assuming you’ve paid off your balance). The idea is to establish your ability to handle a credit card by making your payments on time each month — which should lead to having a “regular” credit card that doesn’t require a deposit.
In fact, if you do a good job with this card, Discover may return your security deposit in as little as 7 months and let you continue to use it unsecured.
Offers a rewards program rare for secured cards: get 2% cash back on gas and restaurant purchases (on up to $1000 in these purchases per quarter) and 1% cash back on everything else. Also offers the same doubling of your first-year rewards as a bonus.
No annual fee beyond the refundable security deposit.
Author: Adam Jusko