Chase Freedom vs. Discover it

Which card is best for you?

Chase Freedom vs. Discover it

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If you don’t mind keeping tabs on a list of bonus categories that rotate quarterly, 5 percent cash back cards, such as the Chase Freedom and the Discover it, can be a helpful addition to your wallet. A favorite among rewards enthusiasts, 5 percent cash back cards allow you to temporarily supersize your rewards earnings on purchases you’re already likely to make, such as gas, restaurants and groceries. Power users also like to pair them with other high-yield rewards cards to earn as much as possible from their spending.

The Chase Freedom card and the Discover it card are two of the best-known 5 percent cash back cards. But the cards are so similar, it can be tough to tell them apart. Both cards offer 5 percent cash back on the first $1,500 you spend on whatever spending category is earning a bonus that quarter and an unlimited 1 percent cash back on everything else. Neither card charges an annual fee and they both offer an attractive sign-up bonus. In addition, both cards offer 0 percent APRs on purchases and balance transfers for well over a year.

A closer look at the cards, though, reveals some subtle differences. The Discover it card, for example, potentially offers a much larger sign-up bonus if you use it for the majority of your purchases. However, you must wait a year to get it. Meanwhile, the Chase Freedom card offers more flexibility in how you use it: A significant number of retailers don’t accept Discover cards, but they do accept Visa.

Deciding which card is best for you depends, in part, on what you want to get out of your credit card and how you plan to use it. Here’s what else we found when comparing the two cards: 

Chase Freedom versus Discover it

  Chase Freedom card
Chase Freedom card
Discover it card
Discover it card
Rewards rate
  • 5 percent cash back on rotating categories ($1,500 in purchases per quarter)
  • 1 percent cash back on general purchases
  • 5 percent cash back on rotating categories ($1,500 in purchases per quarter)
  • 1 percent cash back on general purchases
Sign-up bonus
  • $150 when you spend $500 in the first 3 months
  • 100% match of your cash back at the end of the card’s first year
Annual fee
$0 $0
Estimated yearly rewards value (for someone who spends $15,900) $239 $243
Pros
  • Good sign-up bonus for a no annual fee card
  • Generous 5% cash back rate for bonus categories
  • Bonus categories are broad and typically include popular spending categories, such as gas, restaurants and groceries
  • Can combine cash with other Chase card earnings
  • Can also redeem cash for gift cards, merchandise, experiences or travel
  • Cash back doesn’t expire
  • Exceptional sign-up bonus if you regularly spend more than $500 a month
  • Generous 5 percent cash back rate for bonus purchases
  • Bonus categories are broad and typically include popular spending categories, such as gas, restaurants and groceries
  • Can redeem rewards for cash back, gift cards, charity or Amazon.com purchases
  • Lower credit card APR and fees
Cons
  • Must opt in to receive a 5 percent bonus
  • Must track quarterly spending categories
  • You don’t get a rewards bonus when you book travel with Freedom card rewards
  • You can’t transfer your cash back to airline or hotel partners
  • Must opt in to receive a 5 percent bonus
  • Must track quarterly spending categories
  • You must spend a relatively large amount to receive a substantial bonus
  • You can’t transfer your cash back to airline or hotel partners
Who should get this card?
  • Occasional credit card users
  • Frequent travelers
  • Someone who wants just one credit card
  • Rewards maximizers who plan to use the card heavily during the first year
  • Someone who wants to limit credit card charges

Best for someone who wants the largest possible sign-up bonus: Discover it card

The biggest difference between the Chase Freedom and the Discover it cards comes down to their sign-up bonuses. The Freedom card offers an upfront sign-up bonus of $150, which you can earn after just three months. The Discover it card, by contrast, doesn’t offer an initial sign-up bonus. Instead, it matches any rewards you earned by the end of your card’s first year – requiring you to wait for your rewards bonus. But if you have the patience, you could be richly rewarded with a much larger prize.

Consider, for example, if you spent at least $125 per month on a rewards category that earned a 5 percent cash back bonus and spent an additional $1,000 per month on other purchases – you would essentially earn 10 percent cash back on bonus categories and 2 percent cash back on general purchases. That would net you $195 in bonus cash by the end of your card’s first year – $45 more than the bonuses on the Chase Freedom card.

Bonus cash earned on $1,325 monthly spend ($125 spent in 5% bonus categories)

Chase Freedom card Discover it card
Sign-up bonus = $150 (($125 x 5% rotating category bonus) + ($1,000 x 1%)) x 12 months = $195

Or, let’s say you maximized the 5 percent bonus on the Discover it card by spending $500 on its bonus categories each month to reach the $1,500 quarterly cap, while spending an additional $825 per month on other purchases ($1,325 total monthly spend). You would earn $399 in bonus cash by the end of the year – more than twice the value of the bonuses from the Chase Freedom card.

Bonus cash earned on $1,325 monthly spend ($500 spent in 5% bonus categories)

Chase Freedom card Discover it card
Sign-up bonus = $150 (($500 x 5% rotating category bonus) + ($825 x 1%)) x 12 months = $399

Best for occasional credit card users: Chase Freedom card

The sign-up bonus on the Discover it card is clearly larger if you’re a heavy spender or if you use the same card for all or most of your purchases. But what if you’re on a strict budget or only plan to use your cash back card occasionally? In that case, you could be better off with a Chase Freedom card. 

Unlike the Discover it card, the Freedom card doesn’t require much spending to receive a significant bonus. To earn it, you just need to spend $500 in the card’s first three months. That comes out to about $167 a month – which is not a big threshold for such a large bonus. With the Discover it card, by contrast, you would need to spend around $7,500 in the card’s first year to earn $150. If you spend heavily on 5 percent bonus categories, you may be able to get away with spending less. But you would still need to use your card fairly regularly.

If you don’t plan to spend more than a few hundred dollars here and there – or if you plan to devote most of your spending to other rewards cards – you may have trouble spending enough on your Discover it card to claim a substantial bonus.

Minimum monthly spend required to earn $150 bonus cash

Chase Freedom card Discover it card
$167/month (first 3 months only)
$500 spending requirement ÷ 3 months = $167
$250/month
$250 spend x 5% rotating category bonus x 12 months = $150

Best for frequent travelers: Chase Freedom card

There’s another, less direct way the Chase card could edge out the Discover card: You could pair it with a Chase travel card, such as the Chase Sapphire Preferred or the Chase Sapphire Reserve, and convert your cash into miles. If you redeem your miles for travel using the Chase Ultimate Rewards portal, you will earn a 25 percent to 50 percent rewards bonus, depending on the card. That could add up to big savings if you transfer a significant amount.

Imagine, for example, you earned $270 in cash back from your Chase Freedom card. If you transferred that cash to the Chase Sapphire Reserve card and redeemed your miles for travel through Chase Ultimate Rewards, you’d earn a 50 percent bonus and have $405 to spend on a free flight.

If you transferred it to the Chase Sapphire Preferred card and redeemed it for travel, you’d earn a 25 percent bonus and have $338 to spend. And unlike with the Discover it card, you’d earn those bonuses every year you had the card, allowing you to rack up more rewards over time. 

Chase Ultimate Rewards redemption options

Redemption option Point value Value of 27,000 points
Chase Sapphire Preferred travel redemption (25% bonus) 1.25 cents $338
Chase Sapphire Reserve travel redemption (50% bonus) 1.5 cents $405
Statement credit 1 cent $270
Direct deposit 1 cent $270
Gift cards 1 cent $270
Amazon.com purchases 0.8 cent $216
Chase Pay purchases 0.8 cent $216

If you own a qualifying card, such as the Chase Sapphire Preferred or Reserve card, you can also transfer your points on a one-to-one basis to other airlines and hotels, such as United Airlines, Southwest Airlines, Virgin Atlantic, British Airways, Air France, Korean Air, Singapore Airlines, Hyatt, Ritz Carlton, Marriott and IHG. As you can see from our table below, many of Chase’s travel partners offer even more valuable redemption options, allowing you to stretch the value of your points further:

Chase Ultimate Rewards transfer partners

  Point value Value of 27,000 points
British Airways 2.29 cents $618
Singapore Airlines 2.17 cents $586
Southwest Airlines 1.57 cents $424
United Airlines 1.52 $410
Korean Air 1.4 cents $378
Hyatt Gold Passport 1.37 cents $370
Ritz-Carlton 1.22 cents $329
Air France 1 cent $270
Virgin Atlantic 0.8 cent $216
Marriott Rewards 0.8 cent $216
IHG 0.65 cent $176

Comparing bonus categories

Overall, the Chase Freedom and Discover it cards don’t have a lot of daylight between them. Not only are their rewards rates the same, but their bonus categories are nearly identical. Typically, the only significant variation between the cards’ cash back calendars comes down to timing and the specific retailers that earn bonuses. For example, during the fourth quarter of 2017, the Chase Freedom card offers 5 percent back at Walmart and department stores, and the Discover it card offers 5 percent back at Amazon.com and Target.

Chase 5 percent cash back calendar 2017

Winter Spring Summer Holiday
January – March April – June July – September October – December
  • Gas stations
  • Local commuter transportation (not including parking, tolls and Amtrak purchases)
  • Grocery stores
  • Drug stores (not including Walmart and Target purchases
  • Restaurants
  • Movie theaters
  • Walmart
  • Department stores

Discover 5 percent cash back calendar 2017

Winter Spring Summer Holiday
January – March April – June July – September October – December
  • Gas stations
  • Ground transportation
  • Wholesale clubs
  • Home improvement stores
  • Wholesale clubs
  • Restaurants
  • Amazon.com
  • Target

If you don’t feel especially enthusiastic over the Chase Freedom or Discover it cards’ bonus categories, you may want to consider the U.S. Bank Cash+ Visa, which lets you choose which categories you want to earn 2 to 5 percent in every quarter. That way, you aren’t stuck with a 5 percent bonus category you rarely use. 

See related: Chase Freedom vs. Freedom Unlimited: Which card is best for you?, Discover it vs. Discover it Chrome: Which card is best for you?

The editorial content below is based solely on the objective assessment of our writers and is not driven by advertising dollars. However, we do receive compensation when you click on links to products from our partners. Learn more about our advertising policy


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Updated: 10-21-2018