The Discover it® Miles isn’t so much a travel rewards card as a cashback card. Although you can use your miles to pay for travel purchases, you can also convert them to cash at the same rewards rate, which is unusual for these types of cards. The flexibility of the Discover it® Miles makes it an appealing option for those seeking a rewards card without an annual fee.
Discover it® Miles Review: Good, no-annual fee cash back card
As a hybrid type of rewards card, the Discover it® Miles may appeal both to customers looking to accumulate travel rewards and those seeking cash-back. The ability to earn unlimited 1.5 miles per dollar spent on all of your spending is attractive, as you won’t have to deal with signing up for rotating cashback categories to earn the top rate.
Unlimited 1.5% cash back on everything
With the Discover it® Miles, you can earn unlimited 1.5x miles for every dollar spent on all purchases. These miles also never expire as long as the card remains open. This type of rewards structure is unique, as many rewards cards pay bonus miles or points in certain categories but revert to a flat 1% rewards payout on the majority of spending categories.
Although the Discover it® Miles doesn’t offer bonus categories, the unlimited 1.5 miles per dollar rate on everything is an enhancement over many rewards cards. You can use this card to get a better return on day-to-day spending for things like insurance, medical bills or auto repairs that typically don’t earn bonus miles with traditional rewards cards.
Discover it® Miles match for first year
For new cardholders, Discover will automatically match all the miles you’ve earned in the first year. This effectively doubles your earnings rate for the first year to 3.0% in all categories, and this bonus is unlimited. For example, if you spend $20,000 in your first year, you’ll earn 30,000 miles just from your own spending. Discover will then automatically credit you with an additional 30,000 miles, bringing your total haul to 60,000. As miles can be redeemed at a rate of 1 mile = $1, your $20,000 spend will translate into $600 in rewards cash in your first year.
In some ways, this is even better than the traditional sign-up bonus offered by many other cards, as there is no minimum spend requirement on the Discover it® Miles. Rather than having to charge $3,000 or more in the first three months of card ownership, as many travel rewards cards require, you can spread your spending out over the entire year with the Discover it® Miles and still earn a significant bonus.
Flexible redemption options
Since the Discover it® Miles isn’t an airline-specific credit card, you don’t redeem the miles you earn for flight awards. Essentially, you can liquidate those miles at a rate of $0.01 per mile. You have the flexibility to redeem your miles either for a statement credit to offset travel purchases or as cash back. The card advertises this redemption feature as “no blackout dates,” meaning you can “fly any airline, any time,” but in reality the cardholder can simply apply miles to cover airline or other travel purchases made with the card. Still, it makes for an easy way to get “award” flights without having to deal with mileage redemptions and award seats directly with airlines.
ValuePenguin's Verdict: Good for a $0-annual fee card
The Discover it® Miles doesn’t pay the highest rewards rates in the travel card world, nor does it have the highest cashback rates. What it does have is above-average miles-earning potential of 1.5 miles per dollar for all purchases made with the card.
Typically, rewards cards offer bonus miles or points in categories such as hotels, dining and airfare but pay just 1% for other categories. With 1.5 miles per dollar spent on all purchases, the Discover it® Miles can prove rewarding for many day-to-day spend categories. Additionally, the Discover it® Miles has $0 annual fee, which is a rarity among the higher-paying rewards cards. The first-year match on all earned miles makes for an interesting first-year sign-up bonus (this is for new cardmembers only), adding to the attractiveness of the card for at least the first year of card ownership.
Alternatives to the Discover it® Miles
The Discover it® Miles does a good job for a travel rewards card with no annual fee, but it does have competitors in the space. One thing to note is that Discover is not as widely accepted on a global basis as cards from other issuers like Visa and Mastercard. You may want to check on Discover’s website where the card is accepted. Here are three alternative choices that also carry no annual fee and pay some version of cashback rewards.
Discover it® Cash Back
The Discover it® Cash Back is very similar to the Discover it® Miles, but with a gimmick. For most purchases, the card simply acts as a 1% cashback card, which isn’t a great earnings rate. However, every quarter the card offers a generous 5% cash back on a rotating variety of categories on up to $1,500 in purchases when you activate. For 2020, the categories include grocery stores, Walgreens and CVS (January-March), gas stations, Uber, Lyft and wholesale clubs (April-June), restaurants and PayPal (July-September), Amazon.com, Target, and Walmart.com (October-December). As with the Discover it® Miles, the Discover it® Cash Back has no annual fee or foreign transaction fees and offers a first-year match of all of the cash back you’ve earned for new cardmembers.
While not ideal as a primary credit card for daily purchases, the Discover it® Cash Back can provide a nearly unprecedented rate of return for purchases in the quarterly bonus categories.
Capital One® VentureOne® Rewards Credit Card
The Capital One® VentureOne® Rewards Credit Card is a competitor that is very similar to the Discover it® Miles. Both cards earn rewards on every purchase, with no bonus categories. The Capital One® VentureOne® Rewards Credit Card earns at a rate of 1.25 rewards points per $1 spent, which is less than the 1.5 miles per dollar spent offered by the Discover it® Miles. Currently, both cards have no annual fee or foreign transaction fees as well.
In terms of sign-up bonus, the Capital One® VentureOne® Rewards Credit Card offers 20,000 miles after $1,000 of spend on the card in the first three months of ownership. Unlike the Discover it® Miles, the Capital One® VentureOne® Rewards Credit Card offers the ability to transfer miles to 15+ travel partners. Depending on the value you can get out of your mileage redemptions with these airlines, the Capital One® VentureOne® Rewards Credit Card points might prove more valuable.
Chase Freedom Unlimited®
In terms of basic structure, the Chase Freedom Unlimited® is nearly identical to the Discover it® Miles, as the Chase Freedom Unlimited® earns 1.5% cash back on all purchases and the Discover it® Miles earns 1.5 miles per dollar spent. The Chase Freedom Unlimited® also offers a 0% APR on all purchases for the first 15 months (then 16.49% - 25.24% Variable), besting the Discover it® Miles by one month. Additionally, neither card has an annual fee.
The sign-up bonus for the Chase Freedom Unlimited® is a bit different, offering $150 cash back after spending just $500 in the first three months of card ownership. This contrasts with the Discover it® Miles’s first-year matching program for new cardmembers, which can prove more lucrative if you’re a heavy spender.
The information related to the Chase Freedom Unlimited® has been independently collected by ValuePenguin and has not been reviewed or provided by the issuer of this card prior to publication.