Update 2/10: Discover has rolled out free FICO credit scores on all existing Discover cards, no longer just on this Discover it® Card. You get a free FICO score once a month, printed on your statement (online or paper). This is sneaky smart because unless you actually use your Discover card, no statement will be generated and thus you don’t get your free score. The score will be based on your TransUnion credit report, making it similar to Barclaycard. I would still consider converting your existing Discover card to an “It” card (full review below). It’s free and won’t affect your credit score.
(Reminder: Get 5% back in Restaurants and on Movie Purchases in the 1st Quarter of 2014. From January to March 2014, get a 5% Cashback Bonus on up to $1,500 in purchases at restaurants and on movie purchases. 5% rewards start only after activation each quarter and are not retroactive, so sign up now by logging into your account online.)
Scrappy little Discover is trying something bold. They’ve chucked everything and started fresh with only one card – the new Discover it® Card. (Yes, lowercase, don’t ask me why.) No longer promoted are the Discover More, Motiva, Open Road, Escape, and Miles cards.
In fact, you may want to convert your old Discover card to this one. The new card is a definite improvement over the old products, with many positive changes in direct response to the competition. Here are the highlights:
- 5% cash back on rotating categories. My favorite feature. As with the Discover More card, you’ll get 5% cash back from select categories each quarter. From January to March 2014, you’ll get 5% cashback on up to $1,500 in purchases in Restaurants and on Movie Purchases.
- 1% flat cashback on all other purchases. Previous cash back cards had an initial tier that only gave you 0.25% cash back on the first $3,000 in purchases, and then 1% after that. They’ve finally matched competitors and went for 1% flat.
- Late payment forgiveness. There is no late fee for your first late payment, and your APR won’t automatically increase either. You can also pay-by-phone for free, up to midnight Eastern on your due date. We all make mistakes, so this is a nice addition.
- Human. 100% U.S.-based customer service available any time. Guides a free, personalized online tour to help you get the most rewards for how you use your card. Instead of an intentionally-complicated robot phone tree, you can now select at any time to go straight to a human. I’m a little bummed that this has to be touted as a feature, but sadly it is…
- No annual fee, no fee for going over your limit.
- 0% Intro APR* on purchases and balance transfers for 14 months. Then the variable purchase APR applies, currently 10.99% – 22.99%. A fee of 3% applies for each balance transferred.
- No foreign transaction fee. Discover is not accepted very widely in Europe, although it works anywhere you see the Diners Club International Logo. However, it is one of the best cards for Asia, especially China and Japan. You can use your Discover anywhere you see a China Union Pay, JCB, or Diners Club International logo.
- Silly things. Things that shouldn’t matter, but still might. The card arrives via UPS/FedEx mail in a sleek-looking box. The card front is made to look like brushed stainless steel with no raised embossing – your name and card number are only on the back. I wonder where they got that idea?
Is it really a game-changer? Well, no. It’s not quite “one card to rule them all”, but it does combine the good bits from several other popular cards (Chase Sapphire, Chase Freedom, Citi Simplicity) to create a competitive offering. I like the 5% categories that are usually pretty broad and useful.
Discover is still the underdog to American Express/Visa/Mastercard, but it has its own perks. There are bonuses above cash back value for certain gift card redemptions. Their ShopDiscover cashback portal also often has the highest percentages for online shopping merchants, like 10% at Sears, better than eBates and such. Finally, Discover card has a lot of consumer features like return protection and an extended warranty that extends the manufacturer’s warranty for up to an extra year.
Basically, this Discover card is certainly improved and a worthwhile addition to your wallet, although rewards geeks like myself probably won’t it the only card in our wallets.
Existing cardholders. I have not gotten any communication from Discover that my existing cards will be converted to an “it” card automatically. Readers report that if you call them up, they will convert you to the new card manually for free. You get to keep your same card number and thus credit history. Certain people with annual fee miles-type cards or those doing a 0% balance transfer promotion may prefer to stay, but again I think this card is definitely better than the plain Discover and Discover More cards.