Credit Card Review: The New Face of the Discover® More(SM) Card
As part of our weekly credit card review series, we’ll be looking at the Discover® More(SM) Card, which has long been the best cashback card available. With the recent changes to credit card laws, there’s been somewhat of a shakeup in the hierarchy of the best cashback credit cards. Chase Freedom has always been a popular card, but now Discover® More(SM) is looking increasingly attractive.
Apply for the Discover® More(SM) Card now.
What we like about it…
- No annual fee.
- 0% introductory APR.
- 0% balance transfer interest rate for the first 6 months. Excellent route if you’re looking to consolidate your revolving debt and think you can get a handle on it within the promotional period (more on this later).
- 5% cashback bonuses on rotating categories. Even better if you can plan your spending accordingly.
- 1% cashback rewards on all other purchases.
- Up to 20% cashback bonuses for selected bonus partners – lots of options here.
What’s not so great about it…
The biggest letdown about this card: a variable interest rate between 11.99% and 18.99% after March 2010. So, while you can get a 0% APR until then, after that the rate is kind of up to them. Plus, since it’s a variable rate, they can adjust it within that range without notifying you within 45 days and giving you the option to close the account pursuant to the CARD Act. Plus, you’ll pay 3% on balance transfers initiated with your application. As long as you are transferring less than $2,500, it’s still pretty good compared to the previous balance transfer cap of $75.
So how do the cashback rewards work?
There are a couple ways to get cashback with Discover® More(SM).
5% on rotating categories
The 5% cashback rewards are applied to a rotating selection of “popular categories.” The categories rotate every quarter. So, for example, for July through September, the categories could be gas, theme parks and hotels. The next quarter, it might switch to restaurants, grocery stores and movies. Luckily, once you have the card, you can see the upcoming categories for the year. So, if you’re planning a vacation you may want to postpone buying your airline tickets until the months when you get the 5% reward.
5% to 20% on retail purchasers
The most savings can be realized through the Shop Discover website. There, you’ll find a list of merchants that offer cashback bonuses if you make a purchase with your Discover® More(SM) card. The list of Discover More cashback bonus partners is pretty extensive, and if you are willing to do your shopping online, you can save a significant amount.
1% on all other purchases
This is a bit misleading on its face – the 1% cash rebate doesn’t kick in until your spending exceeds $3,000. Up to that point, you get .25% cashback. However, the 1% once you break the $3,000 threshold are unlimited.
Discover® More(SM) Pitfalls
As with all killer deals, you are walking on thin ice during the promotional period. Discover giveth, and Discover taketh away. As soon as you miss a payment during the introductory period, your APR goes to the “Default Rate” which, as of now, is up to 29.99% variable. Talk about the party being over.
Also, the balance transfer APR drops off after 6 months – so if you don’t pay it off before that period, you’ll be charged the standard APR for purchases.
Bottom-line
At the end of the day, though this card has some tasty perks, you still need to practice responsible credit card habits – otherwise this card can end up being just as costly as the one you are fleeing. As always, keep the following pointers in mind:
- You’ll still have to pay the minimum monthly payment – even on your 0% APR balance transfer. Budget for this, because if you miss a payment, then you’ll land yourself with the sky high default rate.
- Chase up on your old credit card until the balance transfer is complete. The process can take anywhere from a couple of days to a couple of weeks. So keep making those payments until you get confirmation both from Discover and your old credit card issuer that the transaction is complete.
- Mark that end of introductory rate date on your calendar. After half a year of 0% purchases, the transition to being charged interest can be jarring. Make sure that you’re prepared for it. Better yet, don’t take the promotional period as license to go nuts. Take it easy and use that time to get your finances under control.
Verdict: An attractive card for balance transfers and perhaps the most lucrative cashback card available in the post-CARD Act era. But follow those rules to a T! Otherwise the perks get plundered.
Apply for the Discover® More(SM) Card now.
* See the online credit card application for details about terms and conditions. Reasonable efforts are made to maintain accurate information. However all credit card information is presented without warranty. When you click on the “Apply Now” button, you can review the credit card terms and conditions on credit card issuers website.
Related posts:
[...] Credit Card Review: The New Face of the Discover® More(SM) Card … [...]
[...] about how the categories rotate, but for most cards that claim rotating categories, such as the Discover More Card, the categories are picked (seemingly) arbitrarily each quarter and there is a posted schedule when [...]
[...] All of your purchases wind up falling into one of 15 different spending categories. Like Discover More Card, the categories are picked (seemingly) arbitrarily each quarter and there is a posted schedule when [...]