Are you looking to get more out of your credit card transactions this year? Interested in more shopping perks, rewards, or cash back? We hear you!
When used responsibly and proactively, credit cards can be great tools for your overall financial well-being and health.
With that said, there are many options available on the market, and it can be difficult to decipher the best card for you.
We’re breaking down the best Discover cards of 2018 and explaining everything you need to know before you sign-up for anything.
Let’s get into it!
What You Need to Know About Picking the Right Credit Card
Confused and overwhelmed by all the credit card options on today’s market? Tired of getting bombarded with different advertisements and mailers promising you the next hottest card.
It does get annoying, and it’s important for you to be a proactive customer when you’re shopping around for your next card.
First of all, there are definitely a few key points you need to consider.
Your Spending Habits
Are you a cautious buyer or a frivolous impulse shopper? Neither is better or worse than the other, but you need to really hone down your intentions for using your credit card.
Are you disciplined enough to pay off the card in full every month? Or, are you okay with carrying a balance? Do you even know the potential downfalls of carrying a balance (high-interest rates, weakened credit scores?)
When you carry plastic, it can feel easy to just “swipe” without actually feeling the financial cost. If you struggle with overspending, it’s important for you to consider your risk tolerance.
The Interest Rate
All credit cards have different interest rates. You can typically locate them on the fine print when looking up any card. It’s called the annual percentage rate or APR.
This can be either a fixed rate or variable rate. Fixed-rate cards let you know the interest rate each month; variable rates can fluctuate depending on the particular company.
Fees and Penalties
It’s not uncommon for credit card companies to charge different fees or penalties for various activities. You may have to pay for balance transfers or cash advances. You may also be stuck with pees for going over your credit limit or paying your bill rate.
If fees concern you, look for cards that have reasonable fees. You may want to consider a card that has a 0% balance transfer for the first year.
Even if you don’t think you’ll carry a balance, you need to thoroughly understand all the limitations, terms, and conditions applicable to each card.
Your credit limit refers to the amount of money the particular credit card company will let you borrow at a given time. This figure will depend on your credit history, and it can be anywhere from a couple of hundred dollars to several tens of thousands of dollars.
No matter your limit, you don’t want to be paying close to the maximum. This can hurt your score, and it can actually penalize you with the credit card company. Make sure you know the credit limit you have when you receive a new card.
Rewards and Incentives
Ah. The good part! Many credit card companies provide lucrative rewards and incentives to honor their customers’ loyalty.
If you’re going to make these purchases anyway, this is certainly a nice perk. Look for rewards that benefit your lifestyle. For example, if you don’t travel very often, you won’t benefit from accruing lots of airline miles.
Just be careful of the common pitfall of unconsciously spending more to rack up different rewards. That’s counterintuitive to good financial sense!
What You Need to Know About Discover
Additionally, Discover offers a variety of exclusive perks to its members including:
- Free FICO credit scores
- Bank accounts with no monthly fees or balance requirements
- High-yield savings accounts
- High-yield Certificates of Deposit
- 100% covered school loans
- Identity alerts
- Quick freezing of your account
- Free overnight card replacement
- 100% U.S-based customer service
They currently offer seven different credit cards, and each of them has wonderful rewards and special features.
Best of all? None of them have those pesky annual fees.
Finally, Discover makes it easy to determine if you’re pre-approved for your credit card request form.
You can go directly to their website and complete a brief form with your name, address, and income. From there, you’ll be able to check your offers and request for a card.
You will need to provide some basic information about whether you’re a student, if you have existing money accounts, and your housing status.
Note that simply checking to see if you’re eligible for pre-qualified offers does not impact your credit score in any way.
1. Discover It Credit Card
Like all Discover cards, there is no annual fee for carrying this one. Now, let’s get into the real exciting perks.
This card has a rotating 5% cash back category. That means you are eligible to earn 5% cash back at different places that you typically shop. These include:
- Gas stations.
- Wholesale clubs like Costco, BJs, or Sam’s Club.
- Grocery stores.
- Home improvement stores like Lowes and Home Depot
- Department stores
You can view the quarterly cashback bonuses on their website, and you can sign up in just a single click.
You’re eligible to earn up to 5% cashback bonuses on up to $1500 of cumulative purchases each quarter. Moreover, you’ll also earn unlimited 1% cash back on all other purchases.
The Discover It card offers one more exclusive perk: all members receive unlimited dollar-for-dollar matches during their first year automatically.
That means you can earn up to 10% on purchases that qualify for the rotating 5% cash back categories.
Rewards do not expire, and you can redeem them at any time at any amount.
You can redeem for direct statement credit cash back, Amazon.com purchase, or for discounted gift cards at major retailers such as TJ MAXX, Bed Bath & Beyond, and Overstock.com. You can also donate your points to make a charitable donation.
The intro purchase APR is 0% for the first 14 months of opening your account, and then the standard purchase rate APR of 13.24% applies. The intro balance transfer APR is also 0% for the first 14 months.
2. Discover It Chrome Gas & Restaurant Card
Did you know that the average American spends 43% of their annual food budget on eating out?
If you enjoy takeouts and restaurants, you may as well make your purchases work for you!
This card generates a cool 2% cash back on all restaurant and gas purchases of up to $1000 each quarter (that’s $4000 per year). It also offers 1% unlimited purchases on all other items and services.
You’ll receive a cashback match on all purchases for the first year, which means that you’re actually getting 4% cash back on each dining or gas-related expense.
Again, if you tend to eat a lot or commute long distances for work, this may be the perfect card for you. You’ll get rewarded for the purchases that you already need to make. Talk about a win-win.
Cash back rewards do not expire. You can redeem your awards in any amount at any time. There are numerous options for redeeming your rewards. These include trading them in for statement credit, cash back to your bank account, discounted gift cards, Amazon.com, and charity.
This card has an intro purchase APR at 0% for 14 months, 0% Balance Transfer APR for 14 months.
Standard purchase APR starts at 13.24% variable to 24.24% variable, based on creditworthiness.
3. The Discover It Secured Credit Card
Never had a credit card? Now is the best time to get started on your journey.
Are you interested in building or rebuilding your credit? Stay away from the debit or prepaid cards – they don’t improve your credit at all.
Secured credit cards work differently than traditional credit cards because they require an upfront, refundable deposit as collateral for your account. If you have poor credit, you are more likely to qualify for a secure card than a traditional one.
With this particular card, you choose the deposit amount (minimum of $200) up to the credit line approved (maximum of $2500). If you pay your balance in full and close your credit card account, Discover refunds your security deposit (which may take up to 2 billing cycles and ten days).
They will also automatically review your credit card account monthly (after the first eight months), to determine whether you are eligible for your security deposit refund.
This card provides several enticing perks including:
- 2% cash back at restaurants and gas stations on up to $1000 in combined purchases each quarter (up to $4000 per year).
- 1% unlimited cash back on all purchases.
- Matched status on all purchases for the first year.
- No annual fee.
- Free FICO credit score updates.
To be eligible for this card, you need to be at least 18 years old, have a legal U.S address and bank account, and have a social security number.
This s a great card for people just looking to get started with building their credit or those looking to rebuild bad credit. This is because they will report to all three major reporting credit bureaus.
4. Discover It Card for College Students
Want to get rewarded for simply having good grades? This is the card for you.
Offering cash back rewards for college, this card offers the unique reward of getting a $20 statement credit each school year your GPA is 3.0 or higher for up to the next five years.
You’ll also be able to participate in the rotating 5% cash back categories, and you’ll be able to achieve unlimited 1% cash back on all other purchases.
Similar to the other credit cards, the Discover It Student Card will match all earned cash back at the end of your first earning year automatically.
You may use your rewards at any time, at any amount, for cash back, Amazon.com purchases, discounted gift cards, and charity purchases.
The intro purchase APR is 0% for six months from the date of account opening, and then the standard purchase APR of 14.24% applies. The balance transfer is 10.99% for six months from the date of first transfer.
5. Discover It Miles Travel Credit Card
Like traveling? Have a bucket list full of exciting an exotic destinations, but don’t like the hefty price tag that often comes with seeing the world?
This credit card offers an exclusive, straightforward way to earn unlimited miles on every dollar you spend. You’ll earn unlimited 1.5 miles per dollar, and the first year, you’ll receive mile for mile matching.
That means if you earned 20,000 miles in the first year, you’ll actually receive 60,000 miles.
You can use your miles card for any travel purchase- meaning it can go towards airlines, hotels, and rental cars.
There are no blackout dates and the rewards never expire. You can fly any airline at any time. All you need to do is redeem your miles in any designated amount to credit the travel purchases from your purchase.
This Discover It Miles card also offers an intro purchase APR at 0% for the first 14 months. Then, the standard purchase APR of 13.24% applies. The intro balance transfer APR is 10.99% for 14 months from the date of the first transfer.
Final Thoughts on Your Next Credit Card
Whether you’re looking to build, rebuild, or just maintain your credit, it’s important to learn how credit cards can help you achieve your financial goals.
At Bonsai Finance, we’re passionate about personal finance and money management. Whether you’re trying to get a bad credit loan, or just learn more about how you can improve your credit score, we can help. Check out our extensive learning center today, and let’s work together to improve your financial health!