Credit Card Review: Miles by Discover
Corporate roadwarriors, leisure travelers and roaming gnomes alike will enjoy the Miles by Discover card. This flexible card lets you rack up miles on all of your purchases and redeem them for credits towards travel. And because it’s a credit, rather than a redemption for a plane ticket, you can choose whichever travel agent, airline or resort you choose. Travel perks begin at just 1,000 miles and can be applied ecumenically – no blackout dates, no restrictions and no advanced booking required. Read the full Miles by Discover Card review below for the full details.
Apply for the Miles by Discover Card now.
Overview: Discover Miles Card
Miles by Discover comes with the same competitive introductory interest rates you’d expect from any Discover Card. After your 6 month interest-free honeymoon is up, you get a variable APR that’s based on your credit rating. Here are the facts:
- 12,000 miles free for your first year
- Earn 1,000 miles each month (must make a purchase)
- 0% introductory APR on purchases for 6 months
- Variable APR between 11.99% and 18.99% after introductory period
- Variable rate based on prime rate plus an amount between 8.74% and 15.74% depending on credit rating
- 0% introductory APR on balance transfers for 6 months
- Standard purchase APR after introductory period
- No annual fee
The figures cited above for APR presumes an excellent credit rating – the numbers are a bit higher for those with lower credit scores.
Redeeming Miles
Redeeming miles can be done in a couple of ways:
- Redeem 10,000 miles for $100 off a travel purchase on your statement. Simply book your flight, hotel, car rental or some other travel expense and then trade in 10,000 miles within 90 days and get $100 credited to your account.
- Trade in 1,000 for a gift card from one of Discover’s partners. Some of these deals can be quite lucrative – as long as you’re willing to put up with the marginal hassle of using a gift card.
- Trade in 5,000 miles for a $25 Discover gift card (can be used anywhere that takes Discover).
- Trade in 5,000 miles for a $25 charitable donation
- Trade in 5,000 miles for $25 in cash (aka deposit to your checking account)
These methods give you a great deal of flexibility. While the greatest rewards are reaped from redeeming for travel, as you can see, you also have a host of perks that can be earned towards everyday purchases.
Unrestricted Travel
As mentioned above, there aren’t any restrictions on where, when or through whom you travel when applying your Miles by Discover Card credit. All that’s required of you is to pay with your Miles card when you book and apply your 10,000 miles for a $100 account credit. There’s no limit to the miles you can accumulate and they won’t expire unless your card is inactive.
Double Miles
You’ll get double miles for all of your travel and restaurant purchases up to $3,000 each year. After that, you’ll get 1 mile for every dollar you spend. You can also get double miles by shopping online through Discover’s website by visiting ShopDiscover.com. There are a few travel related vendors, such as Carnival, which make earning double miles pretty easy even after you’ve broken the $3,000 mark.
The Nitty Gritty
Of course, there are some things you should keep in mind when using your Miles by Discover Card. For one, you’ll be paying a 2% foreign transaction fee for every purchase you make outside the U.S. – something that’s important to note for those who will obviously be traveling often. Watch for this fee to go up if credit cards start feeling the squeeze from the new CARD Act.
Currently, there’s a $15 charge for over-the-limit transactions on balances under $500 and $39 for those over $500. But come February 2010, there are no more over-the-limit fees (you’ll probably just be denied).
Also note that you can’t redeem any of your miles if your account is delinquent. Nothing surprising there. But more important to note is that your APR will immediately bump up to the default rate, regardless of any promotional period.
Notice also that, as pointed out above, your free 12,000 miles in your first year are spread out over 12 months. So you won’t be able to instantly cash in on a $100 credit – but if you’re patient, it’s free money.
All in all, the Miles by Discover Card is a pretty good deal. The variable interest rate (which isn’t restricted by the new CARD Act, by the way) is kind of a bummer, but as long as you pay off your entire balance each month, it’s a non-issue. But for responsible card users who want to earn some rewards without any restrictions, the Miles by Discover Card is a good way to go.
Apply for the Miles by Discover Card now.
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