Escape Card from Discover Review: 25,000 Mile Bonus + Free Primary Rental Car Insurance


The new Escape by Discover® Card is a new travel rewards credit card with some profit potential. Here’s my review and analysis:

25,000 Miles Sign-Up Bonus ($250 credit towards Travel)
You get 1,000 Miles for each month that you make any purchase on this card, up to 25,000 miles. The simplest way to achieve this is to put some sort of automatically recurring charge on this card, like a cell phone or utility bill. But you may not want to use up all 25 months…

Rewards Program – “Unlimited Double Miles”
With this card, you earn two Miles for every dollar spent on any purchase. There is no cap on earning Miles. Now, a “Mile” in this program does not convert directly to any other specific hotel award or airline frequent flier program. I find it is easier to think of them as just “points”, but I’ll stick with the Miles name for now. I called an confirmed that this is the same Miles program that comes with the Miles Card by Discover*. Here are the redemption options:

Travel Credit. The best way to maximize this rewards program by far is to redeem for travel credit. Basically, you get cash, but only towards a travel purchase made with the card. 10,000 Miles = $100.

First, you just book any flight, cruise, vacation package, hotel or car rental – from any website. Then, within 90 days, you just log into your account, select the amount of Miles you want to redeem, and the credit shows up a few days later. The hardest part for me was remembering to use the card when I had travel plans. If redeemed for travel credit in this way, you can view this card as a 2% cash back on everything card.

Cash Option. If you want a direct credit or deposit into your bank account, then the minimum redemption is 5,000 Miles for $25 cash. Since you lose 50% of your potential value this way, I’d avoid this. Gift Cards. A middle ground. For example, 4,000 Miles = $25 Gift Card. 12,000 Miles = $100 Gap or Macy’s Gift Card.

Primary Car Rental Insurance
This is another big draw for me. Most credit cards only offer what is called secondary rental car insurance, which only kicks in after your own personal auto insurance. This means you’ll have to file a claim (likely raising your future rates) and pay your own deductible. In my case, that’s $1,000!

Primary car rental insurance essentially replaces the Collision Damage Waiver (CDW) that costs $10-$20 per day that they try to sell you at the rental car counter. You know, the insurance that you buy so you don’t have to worry about parking lot dings, or them finding some bogus “new scratch” when you return it. You’re covered up to $50,000, and there is no deductible.

More perks:

  • Lost or Damaged Luggage Insurance – Reimbursement for lost or damaged baggage up to $2,500.
  • Travel Delay Insurance – Up to $150 per day of unexpected food and lodging expenses. (My parents could have really used this over the winter holidays. Delta canceled an entire flight and made them wait another 18 hours until the next day to fly out. No compensation was offered!)
  • Trip Cancellation Insurance – Up to $2,500 to travel another time should you become ill and unable to travel.

Conclusion: Annual Fee and Total Value Calculations
The Escape by Discover® Card is meant to be a “premium” travel card, so this card has a $60 annual fee. At a rate of 1,000 miles per month, the intro bonus is worth ~$120 per year if you do the travel credit route. Since the bonus is only good for 25 months, I’d note when they actually charge the annual fee, as I wouldn’t want to pay for the 3rd year.

But if you time things right, you’ll net a ~$60 bonus ($120 minus $60 annual fee) for the first two years (~$120 total), during which you’ll also have two years of free primary car rental insurance.

* The Miles Card by Discover has a similar offer – 12,000 bonus Miles over 12 months. The upside is that there is no annual fee to worry about, but also no double miles and primary insurance. As outlined above, 12,000 miles = $100 Gift Card to various stores, or $100 credit towards travel.

Comments

  1. When the insurance is secondary, the card covers whatever your primary insurance doesn’t. In most cases, this means just your deductible. Of course you are still on the hook when your regular insurance premiums rise.

  2. What travel insurance do they provide? If I remember correctly, I am getting $500k in accident insurance when I book my flights with my platinum Visa card. Do they match this? Otherwise, I would probably just use it for rental cars. Nice find!

    Dima

  3. financePHI says:

    Wow, this sounds great! Almost too good to be true – what are the drawbacks?

  4. I’m weighing all of the different offers right now, and this is ranking the highest on a few comparison sites I’ve visited. I’m just trying to determine if the $60 annual fee is best for the long term. But as long as I use this card, I think it will always pay for itself.

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