The Discover it® Miles card offers a fantastic 3% rewards rate for the first year, and falls to 1.5% each year after that. While the long-term rewards rate is still strong, it's difficult to recommend this no-annual-fee travel rewards credit card when we compare it to the excellent value from a cash back card, such as the 2% Citi Double Cash. The Discover it® Miles card's major drawbacks are lower rewards rate compared to the best cash back credit cards, and relatively limited use of rewards miles. Consumers don’t have any ability to transfer their rewards miles to other loyalty programs, and have specific redemption categories for obtaining maximum savings. Cash back credit cards offer much more flexibility and ease of use, and will be accepted by a larger network of merchants.
The features we like best about the Discover it® Miles
- Rewards miles earned are doubled in a bonus at the end of first year for new cardmembers
- Decent 1.5x miles on all net purchases thereafter
Where we think the Discover it® Miles falls short compared to other cards
- Best use case for rewards limited to statement credits on travel expenses
- 1.5% lower than rewards rate available from the best cash back credit cards
Because of its comparatively lower long-term rewards rate and limited acceptance, we believe most consumers will be better off with a cash back card than with Discover it® Miles. In the first year, cardholders can effectively earn 3% after the Discover it® Miles promotion, but the ongoing rate is 1.5%. The Capital One® Quicksilver® Cash Rewards Credit Card or Citi Double Cash offer 1.5% and 2% back, respectively, on your spending, and are more widely accepted by merchants in the U.S.
We also value flexibility highly - the more options a cardholder has to get good value out of their card, the more we believe that card is worth. In that regard, the Discover it® Miles card isn’t the greatest. Miles earned on the card can be redeemed as statement credit on travel-related credit card spending, or general cash back. Discover considers the following to be “travel-related” purchases: airline tickets, hotel rooms, car rentals, travel agents, online travel sites and commuter transportation. This is a fairly limited range of expenses when compared to other competitors' definition of travel expenses (such as the Barclaycard Arrival World MasterCard’s). While you can redeem the miles for cash back, we do not recommend it. Converting rewards earned through the Discover it® Miles into cash back halves consumers' rewards rate, and only yields 0.75%. Therefore, consumers looking for greater flexibility in their rewards should shop around for cash back credit cards, which will at worst give you 1% back on all purchases.
For individuals set on a travel rewards card with no annual fees, the Discover it® Miles is one of the best no-annual-fee travel credit cards. While it doesn’t offer any signup or spending bonuses like some of its peers do, such as the Barclaycard Arrival World MasterCard, Discover it® Miles’ flat 1.5x miles accumulation rate makes up for this deficit in the long-run. The 1.5% rewards rate on all spending categories makes this card fantastic for anyone who doesn’t want to deal with trying to figure out when is the best time to use their credit card for a purchase. The closest flat rate no-annual-fee travel rewards card is the VentureOne® Rewards Credit Card, which offers a lower rewards rate of 1.25% on travel expenses.
One of the bigger talking points around the Discover it® Miles card is the ‘double miles promotion’. After your first twelve months, Discover will double the miles you’ve earned that year in a one-time promotion and apply them to your account if you are a new cardmember. This will essentially act as if you were receiving 3 miles per $1 spent on all purchases. This promotion may seem like a decent substitute to the card not having any sign on bonus. However, the amount of spending one would have to do for the bonus miles to match the bonuses of other top-notch travel rewards cards is rather high.
|Purchase APR||11.24% - 23.24% Variable*|
How do I earn miles using Discover it® Miles? Generally, Discover it® Miles cardholders will earn 1.5 miles for each $1 spent. This remains constant whether buying groceries or airline tickets. At the end of the first year, however, Discover doubles the miles users earned that year and credits the account as if it had been earning 3 miles per $1. This increased rewards accumulation during the first year is a creative way for Discover it® Miles to make up for the fact that it doesn’t come with any welcome bonuses upfront. Despite this first year promotional rewards rate, the value will not surpass most decent introductory bonuses from competing credit cards unless cardholders spend at least $1,000 per month.
How can I use or redeem Discover it® Miles? Users can redeem the miles earned in one of two ways. They can use the miles as statement credit on travel related expenses made within the last 180 days. Spending 100 miles will offset $1 in travel-related purchases. When redeeming miles into cash back on charges that fall outside of the scope of “travel expenses”, users will receive less value. In this case, 100 miles will translate to just $0.50 of credit card spending on the Discover it® Miles card.
What is the Discover it® Milesrewards rate? Since cardholders generally earn 1.5 miles per $1, we can calculate the rewards rate by considering the following example: charging $1,000 of expenses to the Discover it® Miles credit card earns 1,500 miles. Those miles are worth: 1,500 x $0.01 = $15. Therefore, the rewards rate is $15/$1,000 = 1.5%. If we want to see the rewards rate when redeeming your miles for cash back, we simply substitute the $0.01 per mile to $0.005. This results in a rewards rate of 0.75%. These rates are reflective of long terms rewards. Remember that at the end of your first year, Discover it® Miles grants you a one-time miles increase, resulting in double the rewards rates for spending in that first year.
As with all Discover credit cards, users also have access to their FICO score both online and on their monthly statements. While this used to be a fairly rare feature, more and more financial institutions are beginning to offer it. Staying on top of one’s credit score is an important and fiscally responsible practice. Monitoring one’s credit can, for instance, result in the early detection of identity theft, thus minimizing the damage it can do to us.
Lastly, Discover it® Miles cardholders will not be penalized for their first late payment. While being late usually means an increase in one’s APR, Discover is more forgiving to individuals – at least on their first slip up.
The true worth of a credit card can be best determined when it is contrasted against other available options. Because of this, we profiled some competitors to the Discover it® Miles card below. By seeing how the card stacks up against these other travel credit cards and cash back credit cards, we believe consumers can arrive at a more informed decision as to which option is best for them.
The Citi Double Cash offers cardholders 2% back on all purchases made. The card comes with no other prominent features worth mentioning, as the 2% rewards rate already makes this one of the best credit cards around. While Discover it® Miles cardholders can maximize their first year and earn 3% back on all their purchases, in the long run the Citi Double Cash will provide the better value. Since both cards come with no annual fee, the greatest savings can be found by applying for both cards, and using the Discover it® Miles for the first year on all purchases that would result in a 3% savings, and the Citi Double Cash on all other purchases.
A major advantage of the Citi Double Cash over the Discover it® Miles comes through in flexibility. Discover it® Miles users must use their rewards to offset travel expenses in a limited category in order to get the maximum ongoing rate of 1.5%. On the other hand, the Citi Double Cash provides returns on all purchases, making it better-rounded and simpler to use. With the Citi Double Cash there is no need to redeem points or apply them to items on your credit card statement. Instead, the 2% is simply applied to your monthly bill. Note that to receive 2% back, Citi Double Cash users must pay their bill in full each month. This is a minor drawback, as we always recommend paying one’s balance in full each month as a form of good fiscal responsibility.
The Barclaycard Arrival World MasterCard is the closest competitor to the Discover it® Miles, and one of the best no-annual-fee travel rewards credit cards. It comes with a 2.1% rewards rate on dining and travel purchases, and 1.05% on all other purchases. On top of fantastic rewards rates, it also comes with a hefty spending bonus. If you charge $1,000 to your card within the first 90 days of it being issued, you will receive 20,000 bonus miles, which can be worth up to $200.
The Discover it® Miles credit card will outperform the rewards rate of the Barclaycard Arrival provided that less than half of one’s spending is dining and travel. The only way in which consumers can get a better rewards rate with a no-annual-fee travel rewards card is if they charge close to 50% or more to their credit card on travel and dining expenses. In that case, the Barclaycard Arrival World MasterCard trumps the Discover it® Miles credit card, by having a rewards rate greater than 1.5%. To achieve this, however, one must sacrifice ease of use and make sure spending habits align with these increased returns.
There are a few other features of the Arrival World MasterCard that Discover it® Miles cannot compete with. The signing bonus offers fantastic value early on, which will take Discover it® Miles cardholders several years of moderate spending to overtake. Finally, international acceptance is a factor one cannot ignore. The Discover network is not nearly as widely accepted as MasterCard in most foreign nations. If an individual frequently travels abroad, and would enjoy using their credit card on their travels, the Barclaycard Arrival is the safer bet.
The Barclaycard Arrival Plus World Elite MasterCard is the premium version of the card discussed above. Unlike the Discover it® Miles and Barclaycard Arrival World MasterCard, this credit card costs $89 per year to maintain. What do users get in return? A flat 2.1% rewards rate on all categories and a spending bonus worth up to $500. For a consumer who spends at least $1,000 per month, the Barclaycard Arrival Plus is one of the best travel rewards card around.
We mention ‘$1,000’ per month spending as a barometer of whether this card is the right choice for a consumer. There is no getting around the fact that $89 is a lot of money to pay for a credit card. Therefore, if an individual is paying that much, we think they should ensure that they're getting their money’s worth. This occurs only if their spending is high enough to earn them rewards that make up for that $89 loss. Individuals with low to moderate spending are better off with a no-annual-fee card, such as the Discover it® Miles or the regular Barclaycard Arrival, as they will only serve to earn rewards, with no need to worry about making up any card upkeep costs.
Overall, we believe the average spender will find greater returns on day-to-day purchases with the Discover it® Miles card. The Capital One® VentureOne® Rewards Credit Card works similarly to the way the Discover it® Miles card does. Both cards are no-annual-fee travel rewards credit cards, with no foreign transaction fee.
The rewards rate on the VentureOne® card ranges from 1.25% on travel expenses to as low as 0.625% on other purchases. While the Capital One® VentureOne® Rewards Credit Card doesn’t have rewards rates nearly as good as the Discover it® Miles, it does have a sizable early spend bonus. For spending $1,000 in the first 3 months of receiving your VentureOne® card, you will receive 20,000 miles, worth up to $200 on travel. One would have to spend approximately $1,000 per month during the first year of having their Discover it® Miles card for the ‘double miles promotion’ to come close to the 20,000 point bonus of the VentureOne®.
How do I apply for the Discover it® Miles? You can apply directly online through this link: https://www.discover.com/credit-cards/miles/.
Are there any caps on the Double Miles promotion? No. All miles you earn in your first year will be doubled. The cap is as high as the spending you’re willing to do.
Comments and Questions
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How We Calculate Rewards: ValuePenguin calculates the value of rewards by estimating the dollar value of any points, miles or bonuses earned using the card less any associated annual fees. These estimates here are ValuePenguin's alone, not those of the card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer.