The Discover it Balance Transfer is not one of our top-rated balance transfer credit cards. You can review our list of the best balance transfer credit cards for what we think are better options.
Full Review of Discover it Balance Transfer Credit Card
Generous cash back rewards in frequent spending areas
Fairly long 0% APR offer for balance transfers
Double cash back, in effect, for new cardmembers
No penalty APR
The best rewards rates require registration
Limited additional perks
Relatively brief 0% APR offer for new purchases
- Fairly Long 0% APR Offer for Balance Transfers: Like many credit cards, the Discover It Balance Transfer allows you to transfer high-interest debt from other cards to your new one and pay no interest on it for a specified period. This card’s 0% APR period for such a balance transfer is 18 months posted to your account during the eligibility period. That places it in the middle of the range of such offers, between cards that offer a year or 14 months and those that offer 21 months or even two years. There are, however, fees for such transfers—of 3% for those made within a few months of opening the account (the exact length of time varies) and 5% thereafter. While many issuers charge comparable fees, cards are available that charge less, or not at all, for balance transfers. For example, the Chase Slate card waives balance transfer fees on transfers made within 60 days of opening an account. Then, the fee is $5 or 5% of the amount of the transfer, whichever is greater.
- Earn 5% Cash Back: With this card, you can earn 5% cash back on rotating spending categories. The categories change from time to time, and change with each quarter. For 2020, the rotating categories, by quarter, were: groceries; Walgreens and CVS; gas stations, Uber, Lyft and wholesale clubs; restaurants and Paypal; and purchases made at Amazon.com, Target.com, and Walmart.com. (However, there's an inconvenient catch to qualifying for those rates. See Cons.)
- Double Cash Back, In Effect, for New Cardmembers: After your first year as a cardmember, Discover will match all of the cash back you earned during the year. For example, if you earned $500 in cash back rewards, Discover would double it to $1,000. That bonus could essentially deliver an extraordinary 10% cash back on rewards from the rotating categories that earn the already generous 5% cash back rate.
- No Penalty APR: Unlike most cards, the APR doesn't increase to a penalty rate—usually the highest interest rate charged on the card—after you’ve been in arrears on payments for 60 days or more.
- The Best Rewards Rates Require Registration and Are Capped: To earn rewards at the 5% rate, you have to manually activate the spending category each quarter. If you forget to do so, your purchases within that category will only earn 1% cash back, like all other purchases. Having to keep track of, and register for, the activation periods for particular spending categories is an added burden to getting the most from this card.
- There's also a cap of $1,500 on the quarterly spending that’s eligible for the 5% rate, after which remaining spending in the category for the quarter earns the standard 1% cash back. Since the cap is relatively high, though, many households likely won’t exceed it within three months of spending.
- Limited Benefits: Beyond its rewards, the Discover it Balance Transfer credit card has limited perks. Other cards—even those with no annual fees—typically offer a number of robust further benefits, including rental-car insurance coverage, travel insurance, and extended warranty protection. You may want to also carry another card for select purchases where you require these and other extras.
- Relatively Brief 0% APR Offer for New Purchases: With this card, you’ll get 0% APR on purchases for six months after opening an account. While that gives you some time to finance a major purchase without worrying about interest fees, that’s a shorter time period than many other cards offer. For instance, the Citi Simplicity card offers 0% APR on purchases for 12 months, giving you a full year to pay off your charges.
This Card is Best For
Seeks to maximize cash back earnings across spending categories
Resists or refuses an annual fee on principle or due to cost
Tends to pay less than balance in full and so accumulates debt on card
This Discover It Balance Transfer is a strong choice if you want a card with no annual fee that delivers both lucrative rewards on everyday spending and the ability to get a fairly long interest-free period on balances you transfer to the card.
The rewards—of 5% cash back on spending in categories like groceries and gas, and at certain major retailers—can be lucrative, especially given the match on all cash back earned in your first year with the card. However, the 5% rewards go only to shoppers who are well-organized; the categories eligible for the higher rate rotate every month, and you must register every quarter in order to earn it.
Transferred balances can be carried at 0% APR for 18 months, a longer period than with many no-annual-fee cards that offer hefty rewards. There’s a balance-transfer fee, however. You can also enjoy 0% APR on new purchases, but only for the first six months you own the card; be sure you can pay off purchases within that relatively short period before embarking on a spending spree inspired by the interest-free offer.
Discover it Balance Transfer Credit Card Bonus
Discover's bonus works differently than most other offers. With many credit cards, you have to spend a certain amount within the first three months of opening an account to qualify for a bonus.
Discover, however, has no such spending minimum. Instead, the company will automatically match all of the cash back you earned during your first year as a cardmember. If you earned $250 in cash back rewards, Discover will match it, giving you a total of $500 in rewards.
There's no limit on the rewards that are eligible for this doubling up of cash back.
Rewards Earning Details
For a card with no annual fee, the Discover it Balance Transfer card's rewards are generous, albeit selective about the spending that earns the highest cash-back rate. You'll earn 5% cash back on purchases in rotating spending categories, up to $1,500 spent each quarter. That means you can earn up to $75 per quarter at the 5% cash back rate.
As an added perk, you'll earn 1% cash back on all other purchases, with no limit on how much you can earn.
Rewards Redemption Details
You can receive your cash back as a credit to your account, where they can be applied to your balance at any time, or sent electronically to your bank account. There’s also an option to use them directly as payment at certain retailers, including Amazon.com, or to direct them to charities. An additional, potentially lucrative option is to exchange the cash back for a gift card at Discover partners. A bonus of at least $5—it varies by the merchant—is added to the value of the gift card for every $20 you redeem. So redeeming $20 in rewards would yield a gift card that’s valued at $25 or more. Partners include American Eagle, Banana Republic, Gap, L.L. Bean, Bath and Body Works, Omaha Steaks, Old Navy, Black Angus, Foot Locker, Nike, and Under Armour.
You must accrue at least $20 in rewards to redeem them for gift cards. For the other redemption methods, you can redeem rewards when you have earned as little as one cent.
How to Maximize Your Rewards
The best way to get the most value from this card is to use it to max out the 5% cash back categories each quarter, and then use it for all other purchases for the rest of the year—and especially for the first year. That means keeping track of what those categories are, being sure to enroll at the start of each quarter to ensure you will receive them.
Categories that earn the 5% rate may change from year to year, but here’s the list for 2019:
- January to March: Grocery stores
- April to June: Gas stations, Uber, and Lyft and wholesale clubs
- July to September: Restaurants and PayPal
- October to December: Amazon.com, Target.com, and Walmart.com
Because the categories revolve, you can boost benefits by delaying purchases when you can. For example, in 2020, you could put off a major purchase planned for September at Walmart to the next month, when the 5% rate kicks in at that retailer. A graduation dinner planned for late June might be pushed to July, to take advantage of the 5% rate for restaurants in the third quarter of the year.
Some spending eligible for the higher rate cannot be easily delayed, of course, such as groceries and gas. And many people will be hard pressed to reach the spending limit in some quarter’s categories. As examples, $1,500 in spending in three months is about a third more than the average household spends on groceries, nearly twice what they spend in restaurants, and about three times their gasoline expenditures, according to 2018 data from the Bureau of Labor Statistics.
Such figures make high rewards on rotating quarterly categories less lucrative on an annual basis than may first appear. Still, even if you spent just half the limit every quarter, you’d still earn a respectable $150 a year in rewards at the premium rate. Charging to the card the spending of an average household on groceries, eating out, gas, for the other three-quarters of the year, and entertainment expenses for the entire year, would yield a further $135 in rewards at the 1% cash back rate.
That gives you a total of about $300. In the first year, thanks to Discover's cash back match program for new cardmembers, those rewards would be doubled, giving you $600 in rewards at the end of your first year as a cardholder.
If you shop at some of Discover's gift-card partners, you can increase your benefits still more by using your rewards to buy gift cards, at the minimum bonus of 25% of the value. Using even half of your $600 in annual rewards in such a way would boost your benefit by $75, and your total rewards value for the year to $675.
- Free FICO credit score
- Discover identity alerts and account monitoring
- Freeze it on/off switch to prevent unauthorized charges
When it comes to customer satisfaction, Discover leads the pack. In fact, it is the highest ranking card issuer according to the J.D. Power Credit Card Customer Satisfaction study. It has a score of 842, compared with the average of 806 in the survey.
Discover says its customer service is based in the United States. It's available over the phone, on its website, or through the mobile app. Help is available 24 hours a day at 1-800-DISCOVER or contact customer service online.
Discover, as with many other card issuers, allows you to freeze and unfreeze your account as needed and to monitor your credit report online or through the mobile app. The company will notify you if there is suspicious activity, and you’re never responsible for unauthorized charges, which are also standard features.
Fees to Watch Out For
In general, the Discover it Balance Transfer card doesn't come with a lot of fees. However, you should pay attention to its balance-transfer fees if you’re planning on transferring debt from elsewhere to the card.
Its combination of generous cash back rewards in select categories and an introductory 12-month match on all rewards makes the Discover It Balance Transfer card an alluring choice even if you don't plan to use the 0% APR debt-transfer offer for which it's named.
Outstanding rewards can be rare on cards that also offer an ample balance-transfer program, as this card does. You'll get 18 months at 0% APR, giving you plenty of time to pay off high-interest debt. However, its 0% APR offer on new purchases is, at six months, shorter than those of some other balance-transfer cards, and it charges fees on balance transfers, which some other cards do not impose. You may want to shop around for other cards if you're seeking a card with long and inexpensive 0% APR offers on balance transfers and new purchases, and aren’t sure you’ll benefit heavily from the Discover It Balance Transfer's rotating high-rewards categories.
While the absence of a foreign transaction fee is a nice plus, Discover cards have limited acceptability abroad, and the company's card lacks such travel perks as insurance coverage for rental cars. Travelers should consider carrying another card on trips, and especially those outside the U.S.