Discover it Miles Credit Card Review

Full Review of Discover it Miles Credit Card

Pros Explained

• Your First-Year Points are Matched: At the end of your first year of owning the card, Discover will automatically match all the miles you've earned—essentially doubling your rewards for that period. For example, if you earn 30,000 miles throughout the year, Discover will match it and increase your rewards balance to 60,000 miles. Few cards without an annual fee offer a bonus are that lucrative.
• Flexible Rewards Redemption Options: Discover offers an unusually wide range of options for redeeming miles. Indeed, this isn’t really a miles card, since all the options involve redemptions of miles for money, at the consistent rate of 1 cent per mile. (Several travel cards allow you to redeem your miles for cash back, but it's often at a lower value.) One travel-focused feature is the ability to directly redeem points to your account to offset travel expenses, including airline flights and hotel stays. Points can otherwise be received as a statement credit, deposited electronically to a bank account, used as cash at select merchants, given as a charitable donation, or converted to a gift card.
• Decent 0% Introductory Offer on Purchases: The card offers a 0% APR on new purchases for the first 15 months following account opening. That’s not an outstanding length of time compared with all such offers, but it nonetheless could be a money-saver, especially if you plan some major purchases soon after you get the card.

Cons Explained

• A Less-Than-Ideal Card for Many Travelers: Save for its absence of a foreign transaction fee, this card has little to offer those who travel a lot and spend big. The Chase Sapphire Preferred card, for example, offers 5 points per dollar spent on travel, 3 points per dollar spent on dining and streaming services, and 1 point per dollar on all other purchases. For a frequent traveler, those richer rewards might soon justify the cost of that card's $95 annual fee. Also, you can't transfer points earned with the Discover It Miles to airlines, hotels, or other companies that have loyalty programs—as you can with the Chase Sapphire Preferred, among other cards. That eliminates the possibility of getting more for your points within those programs, because they might be stretched to deliver greater value. Also, this card, like most others from Discover, falls short on travel-related perks. It joins most no-fee cards in lacking luxury perks found on travel cards with fees, like travel credits, airport lounge access, and free upgrades at hotels. It even lacks some features that are frequently offered by competing cards, such as rental-car insurance coverage, travel insurance, and extended warranty protection. 
• Mediocre Introductory APR Offer for Balance Transfers: Many cards offer an initial period of 0% APR for balances transferred from other cards to your new one. The Discover It Miles, however, offers only to carry transferred balances at 0%; the term for the offer is 15 months from the date of first transfer, as long as the transfer is made by June 10th, 2023. After the intro APR expires, your APR will be 16.49% to 27.49%, based on your creditworthiness. The special rate of 10.99% likely marks a reduction from what you're paying on the other card, since the average credit card APR is 19.07%. But you could still pay thousands in additional interest compared with a 0% APR offer of the same length. And Discover also imposes an intro balance fee of 3% of the amount of each transfer for transfers that post to your account by June 10, 2023 and up to 5% fee for future balance transfers will apply.

The Discover it Miles card is a reasonable fit for those who want an easy-to-use card that pays decent ongoing rewards and delivers a generous bonus, provided you spend heavily on the card in its first year. New cardholders receive double the miles they've earned after 12 months of opening the account, effectively making this card's rewards rate to 3 miles per dollar spent the first year. 

Discover it Miles Credit Card Bonus

This card automatically matches all of the miles you've earned at the end of the first year you own it. There's no requirement for the bonus, and no limit to how much can be earned.

This bonus can be potentially very valuable if you spend even moderately on the card. For example, if you put $2,000 per month on this card, you'd earn 72,000 points total over the course of the year including the bonus. That's a value of $720 when redeemed for travel or cash back.

A comparative downside to the bonus offer is that you won't get a credit to your account until the end of the year. Some other cards, like the Capital One VentureOne, offer cash or points bonuses that you can earn within the first few months of getting the card, and that typically require spending less—no more than a few thousand dollars—than you would with the Discover It Miles to earn the same bonus.  

Rewards Earning Details

You earn unlimited 1.5 miles per dollar on all purchases. Factoring in the match bonus, which doubles those rewards at the end of the first year of account opening, new cardholders can earn an effective rate of 3% during the first year on this card based on the fact that miles are worth 1 cent each. After the first year, the effective rate drops back down to 1.5%.

Rewards Redemption Details

Discover maintains highly flexible options when it comes to how you redeem your miles. Miles can be redeemed at any time for any amount, at a consistent rate of 1 cent per mile, and they never expire.

Like most travel cards, Discover offers the ability to redeem miles for a statement credit to your account, which is often the easiest way to redeem. With travel expenses, you can use your miles to offset eligible charges within 180 days of making them. Qualifying travel purchases include airline tickets, hotel rooms, car rentals, and commuter transportation.

Here's a rundown of all of Discover's redemption options:

• Statement credit: Redeem directly to your account in the form of a statement credit.
• Electronic deposit: Redeem to any bank account you designate.
• Pay at select merchants: Use your cashback to pay at select merchants, including Amazon.com.
  

How to Maximize Your Rewards

To make the most of this card's rewards, it's important to fully take advantage of the unlimited bonus offer during the first year. You can do that by using this card for all of your purchases, from airfare to groceries. At the end of the first year of ownership, Discover will match all of the miles you've racked up. After that, you'll go back to earning 1.5 miles per dollar spent.  

Average Case

If you're the average American consumer, we estimate that you can earn more than 50,000 miles on this card within the first year of account opening. Let's say you use this card to purchase everyday items including food, apparel, fuel, entertainment, and personal care products and services. According to the Bureau of Labor Statistics, you'd spend $13,876 in all of those categories combined over a year.

In addition, let's assume you take one trip per year that costs a total of $1,500, including airfare, hotels, ground transportation, and other miscellaneous expenses.

You would earn a total of 52,566 miles on this card, which would be worth $525.66 when redeemed. Our calculation includes earning 1.5 miles for every purchase you make and the first-year bonus offer. Without the bonus offer, you'd earn 26,283 miles worth $262.83 when redeemed for cash back.

Aspirational Case

Naturally, if you're sufficiently affluent, you could increase earnings even further by using this card for additional vacations or major expenses. For example, let's use the scenario above and say you take a second $1,500 vacation every year. Let's further assume you charge $10,000 to this card for such major expenses as new computers, home appliances, or landscaping.

 That, plus the original spending from our average case, would earn 87,066 miles worth $870.66 during the first year of card ownership. Without the bonus, your earnings would be half that, or $435.33. 

Purchasing more expensive items during the 0% introductory period would provide even more benefit, since you'd effectively be able to finance your larger purchases at no cost while also earning miles. 

Discover it Miles Credit Card's Outstanding Benefits

• No late fee on your first late payment
• No foreign transaction fee
• No penalty APR

Standard Benefits

• Social Security number monitoring
• $0 fraud liability on unauthorized charges
• Overnight card delivery
• 24/7 U.S.-based customer service
• Year-end summary
• Free FICO credit score
• Discover identity alerts and account monitoring
• Freeze it on/off switch (from app) to prevent unauthorized charges

Cardholder Experience

In the 2021 J.D. Power U.S. Credit Card Customer Satisfaction Study, Discover was rated second out of 11 card issuers. It scored 837 which was well above average.

Discover offers U.S.-based customer service, available over the phone, on its website, or through the mobile app. Help is available 24 hours a day at 1-800-DISCOVER or you can contact customer service online, including using the issuer's website to message an agent.

Security Features

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. 

Our Verdict

The generous matching bonus and flexible redemption options make the Discover it Miles a strong choice in a miles-earning card that has no annual fee, at least for its first year. It also allows you to carry new purchases during that year (and a little beyond, to 15 months) without interest, through its 0% APR offer. 

After that initial year, though, its appeal drops. The ongoing rate of 1.5 miles per dollar spent is just average among no-annual-fee cards. For example, despite its lack of a bonus, even average spenders might find better long-term value with the Citi Double cash card, which offers 1% + 1% rewards—1% when you purchase and 1% when you pay off those purchases.