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Discover it Cash Back: Is it worth it?

Big (but limited) category bonuses and first-year cash match are the big incentives


The Discover it Cash Back card offers plenty of perks for cardholders who know how to utilize rotating categories. Consider pairing it with another, flat-rate card so your earning potential stays high.

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Discover’s most well-known rewards card is the Discover it® Cash Back, which has category bonuses and no annual fee. Whether it makes sense for you, of course, is going to depend on your personal situation and what you value in a rewards card.

What you need to know

Here are the details on the Discover it Cash Back:

  • Annual fee: None.
  • Earning potential: Enroll every quarter to earn 5% cash back on up to $1,500 in purchases in rotating categories (1% thereafter). Unlimited 1% cash back on general purchases.
  • Rewards redemption: Redeem cash back at any time.
  • Extra perks: Cash back match at the end of your first year, free FICO credit score, no penalty for first late payment (up to $40 thereafter and free Social Security number alerts).

It’s important to note that since Discover offers rotating categories, you need to activate them each quarter. This quarter, you can receive 5% cash back at restaurants and when you use PayPal. The categories for the next quarter, which begins in October, are, and Activation will begin Aug. 1 for the final quarter of 2021.

If you do the math, you can see that if you spend $1,500 on those categories, you can earn $75 in rewards per quarter (or $300 a year). You receive an additional 1% back on all other purchases.

Since 1% back isn’t very high, however, the real earning potential on this card (and others like it) is in the 5% back categories. That’s what sets it apart from other rewards cards.

In addition, as an extra perk, Discover matches the cash back you earn at the end of the first year of card ownership. That effectively doubles your cash back for charges in the first year, allowing you to bring in $600 in the first year on bonus purchases alone.

Two’s company

Discover it Cash Back is the best deal for people who can maximize the 5% back in the bonus categories. There are other cards available that give cash back with no limits on charges, but the cash back rates on those aren’t as high.

For instance, the Citi® Double Cash Card gives unlimited 2% back – 1% on general purchases and then 1% when you pay off those purchases. That could be superior if you regularly pay off your card each month.

Another option is to pair the Discover it Cash Back with the Double Cash Card or one similar to it. If you already use flat rate credit cards, this could be beneficial for you. You could use the Discover card for the bonus categories and once you hit the $1,500 quarterly limit, start using a card that gives you more than 1 percent on all other purchases.

There is value in the Discover it Cash Back and no-annual-fee cards like it that have big (but limited) bonuses on rotating categories. But you’ll have to judge if it is the appropriate card for you.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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