Discover it® Miles – Unlimited 1.5x Rewards Card Review: 3% Cash Back During First 12 Months

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Discover it Miles ImageDiscover started with one credit card. Over the years, they expanded to a bunch of different cards. Back in 2013, they nuked all of them and started fresh again with the Discover it. But you know that simplicity never suits large organizations…

So they are growing again, with the addition of the new  Discover it® Miles – Unlimited 1.5x Rewards Card. (Not to be confused with the old Discover Miles card… are you following?) Here are the copy-and-pasted highlights, followed by my commentary:

  • Unlimited 1.5x rewards on every purchase, every day. For every $1 you spend, you earn 1.5x Miles.
  • Get a mile-for-mile match of all the rewards you’ve earned at the end of your first year, automatically.
  • Redeem your rewards in any amount for cash or a travel credit. You’ll always get $1 for every 100 Miles you’ve earned.
  • Get your FICO® Credit Score for free on monthly statements, on mobile and online.
  • 100% U.S. based customer service. Talk to a real person any time.
  • No Annual Fee.
  • See additional Discover it® Miles details

Effectively, this is an ongoing flat 1.5% cash back card with no annual fee and a few added perks. The rewards structure is relatively simple. The card earns 1.5 Miles on all purchases, with no special categories. There is no annual fee. 100 Miles = $1 cash direct deposited into your bank account. You can also redeem at the same value towards any travel purchases, but why bother? As long as you have a bank account, I say go with the cash. So I would call this a flat 1.5% cash back card.

But for the entire first 12 months, you can earn unlimited 3% cash back! The “sign-up bonus” here is that you get double miles at the end of your first year. Since you can convert directly to cash, that means 3% cash back for an entire year. That’s a rare offer, as 3% is probably more than Discover even rakes in through merchant fees. If you put a lot of spending on your credit cards, this can be a big deal.

At 3% back, many bill payment options that charge around 2% fee start looking much better. For example, if you pay estimated taxes to the IRS every quarter like I do and paying by credit card only costs 1.87% (Discover accepted). That means I can get 1.13% back on all my tax payments.

Perks include a $30 inflight WiFi credit and free FICO score every month. They also threw in no foreign transaction fees, and Discover card is pretty well-accepted in Asia (works as UnionPay in China, JCB in Japan). Discover continues other features from its non-Miles card like the free FICO, US-based phone reps, and no late fees on first late payment.

In terms of comparison, recall that I just wrote about the best 2% flat cash back cardsCiti Double Cash and Fidelity American Express. So for the first year this card wins with 3% vs. 2%, but on an ongoing basis you’ll fall behind at 1.5% vs. 2%. Like I said, the 2% cards offer a solid minimum baseline, but there will often be situations where you can beat 2% like this limited-time offer or specific cards with special categories.

If you are comparing against the Capital One Venture Rewards card which is another travel-oriented card that offers 2 “miles” per dollar, the major differences are that it has a $59 annual fee and no $30 inflight WiFi credit. The no annual fee version only offers 1.25 miles per dollar.

Existing Discover cardholder? Discover’s policy in the past had been to only allow one card per person, but now you can have two (i.e. you can have both a Discover it and a Discover it Miles.)

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  1. josefismael says

    Tried applying for this last week when it first came out – was denied because I had too recently applied for the regular IT. Tried to have them transfer the card and they said that wasn’t possible. Any ideas on how I can get in on this?

  2. So, what you’re saying is that if I play my cards right (i.e. don’t cash in any miles for the first 12 months), I can effectively get a card that offers unlimited 6% cash back for the first year?

    I honestly thought I was done with adding new credit cards for awhile, but this might be too good to pass up. Even after the first year it will come in handy on the occasion that I’m buying something that isn’t already covered by one of my other cards.

  3. Any idea if one could convert an old Miles card to this new version?

  4. Suggest to ask the rep to close one and then re-apply. (as the limit is 2).

  5. So with 1.5% back that beats the regular IT card yes? So why would one want the regular IT card now? Does the miles card not work with the 5% back rolling program or something?

  6. Applying for this card only makes sense if you are planning to spend $50,000 in the next 12 months using a Discover credit card (note it is not as commonly accepted as Visa/Mastercard, which makes it even harder to reach that goal). Why $50,000? Because you typically get $500 for a credit card application (hard credit pull). Jonathan shares those offers with us all the time. You get 2% with the Citi card mentioned above. With this new Discover card you get an extra 1%. You need to spend $50,000 with the new Discover card to earn $500 as compared to the Citi card. As one can see after running the math, there is no need to apply for this new Discover card, unless you don’t have a Discover card. It is good to have one for the 5% cash back in rotating categories.

    • I would agree with the idea behind a lot of what you said. I would also add that at 3%, many bill payment options that charge around 2% fee start looking much better. For example, if you pay estimated taxes to the IRS every quarter like I do and paying by credit card only costs 1.87%:

      Then that means I can get 1.13% back on all my tax payments (even overpayments).

      • Just wondering if you’re considering sending 100k or so towards the end of the year?

        • Nah, I think my Discover limit is only between $10k and $15k. Also, legit estimated tax payments need to be spaced out during the year, although I could probably still put on $5k a month. I don’t really play the manufactured spending game myself, I don’t have the youthful energy to go buy a bunch of gift cards from Office Depot all while driving around town looking for a store with inventory. Maybe 10 years ago ;). I just try my best to roll what I already spend into whatever card works best.

      • Jonathan,
        To Nick’s point though, let’s say your IRS tax bill is $5000. If the card has a minimum spend of $5000 to get $500, then you could use that card on your IRS bill, effectively giving you 8.13% percent instead of the 1.13% back.
        I think his point in general is one worth more thought, whether these % back are worth bothering with in light of large signup bonuses.

    • But I already had those $500 cards… ppl cancel those high bonus card and try to apply after cool down period?

      • Jim, absolutely! You apply for 1 or maximum 2 cards every year. And then keep cancelling. This way you just cycle them. By the time you have to re-apply for a card, a couple of years has passed since you cancelled it, and you will get the sign-up bonus again.

  7. Has anyone else tried to convert their existing Discover IT card to the Discover IT Miles card? I’d like to switch – I am very interested in the in-flight Wi-Fi fees credit.

  8. I called Discover and was told that Discover is not allowing conversion of the existing cards to IT Miles at this point. My existing card is IT.

  9. Any cap on the limit other than your credit limit. Whats stopping me from putting $25k a week on the card for a merchant processing service I set up at 1.6% (, and then take my net proceeds and pay it back and then repeat. If you did $25k per week, that could clear $350 per week ((3.0%-1.6%)*$25k), or a net profit of $18k for the year. I would need to front ~$21k to cover the margin lost in the meantime, but that seems like a big amount of tax free money…

    • Discover would probably close your account if you did that much volume from a single merchant account. It’s been tried before. Those that play the “manufactured spending” game quickly learn to stay under the radar.

  10. This is very tempting. I currently have the Citi Double Cash card (because of this website), but could easily switch to Discover for an extra 1% reward. I only hesitate because waiting an entire year to receive it would be agony, and I imagine more companies will take this route and start to offer better cash back. If nothing better comes along in the next few months, I will likely reconsider it.

    Great post!

  11. Can I convert my Discover it to a Discover it Miles? I’d prefer the Discover it Miles card, but don’t want two Discover Cards.

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