Open the Discover It Credit Card but Rarely Use It!
Yesterday, I talked about the high cash back rates and other benefits of the ShopDiscover portal. In order to access ShopDiscover, however, you need an eligible Discover credit card. That is why I recommend opening the Discover It credit card. You may have seen the ads for the Discover It credit card everywhere from the TV to the subway. And while it’s common to knock on Discover for not being as widely accepted as Visa, MasterCard, etc., the Discover It credit card is actually very good. Some key positives and a couple negatives include the following:
- Access to ShopDiscover portal and great cash back rates when shopping
- 5% cash back on rotating categories every quarter (click to see the 2013 categories)
- 1% cash back on everything else
- Fantastic customer service (in my opinion as good as American Express and you’ll speak to a well-knowledged customer representative in the U.S. rather than one based overseas)
- No annual fee
- No signup bonus
- Discover not as widely accepted as Visa or MasterCard
[Update 11/15/13] The Discover It credit card now offers a $150 signup bonus after you spend $750 within 3 months. This bonus is the largest signup bonus Discover has ever given on the Discover It credit card.
[Update 12/2/13] The Discover It credit card no longer offers a $150 signup bonus. The best signup bonus now is probably through Amazon’s link where you will get a $75 Amazon gift card.
Discover It credit card
Those pros and cons are exactly the reason why I recommend opening the Discover It credit card but rarely ever using it! First of all, the credit card has no annual fee so it doesn’t really hurt you to open it and keep the card open. In fact, the longer you have a card open, the more it helps your credit score even if you rarely use it. Secondly, opening the card will give you access to the lucrative ShopDiscover cash back portal, which will help you save money. Last but not least, the Discover It credit card has rotating 5% cash back categories every quarter. This quarter, the category is home improvement, which isn’t very useful for me personally but in 4Q last year (Oct. to Dec.), for example, the bonus category was online shopping so that was a really good one.
The Discover It credit card does not offer any signup bonus, which makes it not as competitive as many of the other credit cards out there. In addition, it only offers 1% cash back on non-bonus category spending. Several credit cards, which I’ll talk about in future posts, offer 2% cash back on everything so they are the better credit card for non-bonus category spending. Of course, some people don’t want to deal with multiple credit cards so if you enjoy having just the Discover It credit card, 1% cash back is better than nothing!
The Main Point
I highly recommend opening the Discover It credit card but not for the usual reason of getting a big signup bonus or because the card is good for spending. I would open it with the intent of having a no annual fee card that improves my credit score over time and gives me access to the ShopDiscover cash back portal along with 5% cash back on rotating categories every quarter.
Disclaimer: I receive referral credit for some of the links above if you sign up through them, which I appreciate
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