A couple of days ago I got my Discover It Miles points match for my anniversary. My actual anniversary was in June, but the points match took place in July. For those not well versed in this rewards program, Discover offers 1.5 points per dollar spent. At the end of the first year (and first year only), Discover matches all points to make your effective earn rate 3x (or 3%). As the image below shows, I’ve had a successful year.
The Discover It Miles was hyped up when it launched in early 2015. Major points blogs have seemed to have fallen out of love with this card, but I’m guessing that may be from inferior incentives paid for credit card links. I don’t know that for sure, so it’s just a guess. Even though the card isn’t as high profile as it once was, earning 3x or 3% for any purchase is a very strong rate points or cash back return. When you factor in all of this for a no annual fee rewards card, it’s very compelling.
Before you jump on this card though, you should evaluate your goals and spend. What rewards cards do you currently have in wallet, what do you buy with them, and what is left over for spend on the Discover card? I think many, if not most, people who apply for this card think they may spend more on the card than they actually end up doing. I targeted spend on the card and made it a priority, especially as my renewal date approached.
Those who are hoping to manufacture spend (MS) on the Discover It Miles card might want to think twice as you won’t get the points match until after your first year has been completed. A shutdown midway into your first year might not yield any points at all, even if a CFPB (Consumer Financial Protection Bureau) complaint is issued. To spend and MS the card for 8 or 10 months and then be shutdown would be a dramatic disappointment. All of the spend (organic and non organic) would likely be completely wasted. Also, if you are manufactured spending and your costs are near or over 1%, then that 3% return is not as lucrative as advertised.
Just to earn $1,000 worth of cash back on this card, it will take $33,500 worth of spend. That return could be beat by other rewards cards, especially transactions that go towards meeting minimum spend requirements for new card sign up bonuses. Discover is also pretty notorious for giving out small (under $10k) credit lines, so high spend for many isn’t as that feasible or attractive.
Those seeking to use Discover miles for travel will probably redeem for cheap domestic (and occasional international) airfare. Some other reasons against the card are illustrated on another blog here.
Using and Cashing Out
Discover It Miles can be used for booking travel with no blackout dates, an assortment of gift cards, at Amazon.com, make a charitable donation, deposit or as a statement credit. All of the options have appeal, but with the amount of rewards that I had, I chose to cash out. A great feature of the website is that Discover makes it incredibly simple to use or cash out your rewards. I think it was only 2-3 clicks before my points were sent to my bank of choice as cash back.
Over the past 30 days I’ve applied for 3 rewards cards (but not all at once via an App-o-rama), which is a big change to my scheduled application timing in the past several years. I feel that my new card applications are coming to a close (or at least a long pause) for the next two years, while I wait for some applications to fall off my record. A fall app-o-rama will likely be my last applications for awhile. I have plenty of rewards cards that will keep me busy until I’m back under 5/24.
With that said, I applied for another Discover It Miles Card just after sending my cash back rewards to my bank. In hindsight, I probably should have waited until the funds arrived into my checking account before applying again just to make sure everything was stable. Fortunately though I was approved and with a larger credit line! I plan to keep both cards open but add consolidate almost all of the credit from both cards onto the newest one. I can’t say for sure how much I’ll spend on the new card, but I’m happy with how my first card went.
Could I have done better with the card and earned over more cash back? Yes, but I forgot to mention that I didn’t actually receive the card for 1.5 months after I was approved because of an address error at Discover. However, I’m happy with my recent return based on the time and resources that I put into the card over the past 13 months.