I won’t bury the lead. The Discover It credit card is one that everybody should have in their wallet.
You may already have this card, because Discover positions it as a starter card, for people beginning their credit journey. If you don’t yet have it, let me tell you why you should, and even if you do, I’ll tell you about some great features.
No doubt I have a special fondness for the Discover card because it was one of my first credit cards. After working at the quarry all day, I’d use the card to buy me and Barney some beers after work. Of course, back then it was a tough fondness to maintain, because so many places didn’t take Discover. I might as well have been carrying Confederate dollars. But it finally caught on, and I used it to equip my first law firm office before the money started rolling in.
If you are new to credit, rather than getting a secured credit card, give the Discover a try. Discover is pretty good about new accounts. And one very cool thing Discover does is to let you check if you are eligible for the card without doing a credit check. A credit check brings down your credit score a little, so you certainly don’t want that if you are trying to build up your credit score. If you check and are not eligible, then Discover also offers one of the best secured cards, if you need to go that route.
Best Cash Back – The 5% Wunderkind.
Discover offers a variety of cards with different benefits. There is a restaurant and gas card that pays 2% cash back, a travel card offering 1.5x points, and version that pays 1.5% on everything. But other cards offer better rewards, and the only one you should consider is the one that pays 5% on rotating categories. (The one exception being if you are a student, for which Discover’s student card offers the same 5% plus $20 per year for every year you maintain a GPA of 3.0 or better.)
Some people don’t get all that excited about cash back, but I love a sale, and a cash back card is really just a discount card. So long as I don’t run a balance (which would wipe out any savings), why on earth would I pay cash for something when I can get a 5% or even 10% discount by using a credit card? I discuss what I call the “cash tax” in this other article.
Along with the Chase Freedom card, everyone should have the Discover card. Both offer 5% “discounts” on rotating categories, so between the two you are likely to have some of your main spending categories covered. For example, as I write this, between the two cards, I’m earning 5% on Restaurants, PayPal, Amazon, and Whole Foods. Between PayPal and Amazon, that means pretty much all my online shopping comes with a 5% discount. Next quarter, Discover offers 5% on purchases at Target, Walmart, and Amazon. Chase hasn’t announced yet, but the categories will likely be directed at Christmas shopping. Last year, any purchase at a department store earned the 5% discount.
I hear credit card “gurus” who get all giddy about the 4% the AMEX Gold card pays on certain categories, and while it is true that it pays on those categories 365, it also comes at a cost of $250 per year. The Discover card is free, and pays 5% on the specified categories, and 1% on everything else.
But if you don’t have it yet, it gets even better. At the end of the first year, Discover matches all your cash back. So on every purchase during that first year, you will earn either 2% or 10%. If you spend $500 on groceries, that’s $50 back (if that’s a current category). I’ll take a 10% discount any day.
If you really want to wring out every penny, for any purchases that don’t happen to fall into one of the 5% categories, then a good strategy is to supplement the Discover card with something like the Citi Double Cash card, which pays 2%. That’s about the best you can do unless you want to pay an annual fee.
Best Web Portal.
Obviously this is somewhat subjective, but I find Discover’s website to offer the cleanest interface. I actually had to call Bank of America to find the place on their site where I could set my card to automatically pay the balance in full every month, it was so well hidden (by design I suspect).
With the Discover site, a single button marked “Manage” offers the following options:
Report Lost or Stolen Card
Add or Replace a Card
Manage Authorized Users
Activate or Deactivate Card
FICO Credit Scorecard
Built-In Card Benefits
Credit Line Increase
I think Discover was the first to let you freeze your account with a click. So much better than having to call in and cancel your card, only to find it later.
The register travel feature lets you do just that, so you don’t get denied because charges are coming from Iceland all of a sudden. And on that subject, NO FOREIGN TRANSACTION FEES.
Best Free Credit Score.
At this point, I think every credit card provider offers a free credit score, but Discover offers the genuine, accept no imitation FICO Score 8, based on TransUnion data. This is a real FICO score used by real lenders. Many others use the VantageScore 3.0, which is a competitor the three bureaus came up with, but which no one uses. It is also the only one of all my credit cards that pops up a graph, showing how I compare; letting me know that I am King of all I survey.
Best Balance Transfer Deals.
Again, you should never carry a balance, so you should never have the need to transfer a balance, but stuff happens. If you find yourself with a balance on a high interest card, Discover let’s you deal with that toot sweet. Right there on the aforesaid menu, you can do a balance transfer. At the time I am writing this, the menu shows that I can do a balance transfer for a 3% fee and have zero interest for 12 months, or I can pay NOTHING for the balance transfer, and pay 6.99% interest for 18 months. If you need to stop hemorrhaging some insane 28% interest rate on a balance, this is a quick and easy way to do it.
Best for the Zombie Apocalypse.
Discover offers around 140 different designs for your card, so you can show loyalty to your favorite team or passion for your hobby. Me, I’ve ordered a number of different designs over the years, most recently the classy-looking gold card.
But more important than a little variety, Discover apparently has no objection to issuing multiple cards, so I can keep them sprinkled around for emergencies. Don’t tell anyone, but I keep one hidden in my car in case I leave the house without my wallet, and another in my bug out bag in case I have to run from the Zombie hoard.
I read a book once where the apocalypse was still in that early phase, where people haven’t figured out that there are an unusual number of dead people walking around, and the hero quickly buys a 4-wheel drive with a credit card, knowing that’s a bill he’ll never have to pay. I try to be prepared for that scenario.
When you first get the card, you are only offered about nine designs, but don’t despair. Once you have it, you can access all the others.
Best with credit limit increases.
When I was using the Discover card to furnish and equip my new office, Discover generously kept increasing my credit limit. I’m sure it was completely out of kindness, and not in the hope that I would end up running a big fat balance.
Joking aside, though, if a high credit limit is appropriate for your circumstance, Discover seems to be generous in that regard. I know a contractor who pours concrete foundations for new homes. He doesn’t use Discover because he prefers travel points, but he uses a credit card to buy all his concrete, immediately paying it off with the money from the job. He’ll spend $25,000 a pop on concrete. That’s a perfect example of someone who requires a high credit limit, and yet never incurs any debt.
Pull the trigger and get $50!
If I’ve convinced you, and you want to see if you qualify for a Discover card, use this link to go to Discover. This will get you a $50 statement credit, so long as you make a purchase, any purchase, in the first three months. Buy a pack of gum, and that works out to about a billion percent return on investment, give or take. You must use the link to get the 50 bucks. Yes, I get a few shekels too if you get the card, but rest assured that did not taint my review. You get $50 and 10% cash back for the first year if you get the card. What is there to taint?