How Good is 3x Back on Everything via Discover It Miles?

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We all (hopefully) know that rewards credit cards are usually amazing for the initial sign-up bonus, and then continue to be pretty great for the ongoing perks they may offer and the bonus category payouts at certain retailers.  If I can earn 3x, 4x, or 5x on some purchases at certain types of stores by using various rewards credit cards then that adds up a heck of a lot faster than a rate of just 1x.

As I outlined here I have about five cards that I usually have in rotation to maximize the majority of my everyday spending.  Other cards come in rotation as I am targeted for a particular offer or as I need to hit a minimum spending requirement, but in general our system has been working pretty well for a while.  However, I think it needs some tweaks this year in order to cut down on the number of annual fees we pay.

Along those lines, there is a new horse in the race for everyday spending dollars via the introduction of the brand new Discover it Miles Credit Card that comes with no annual fee.

This card does not have a sign-up bonus in the traditional sense, but instead it offers double miles for the first year of card membership.  This means that instead of earning 1.5x on all purchases, you will earn 3x on all purchases for the first year.   It will also credit you up to $30 for your in-flight Wi-Fi purchases each year, which isn’t shabby when you remember there is no annual fee.

The “miles” the card earns are worth one cent each, and you can redeem for cash as a electronic deposit to your bank account or for a credit for travel purchases on your statement made within the last 180 days. Travel Purchases include airline tickets, hotel rooms, car rentals, travel agents, online travel sites and commuter transportation.

This means you are earning 3 cents back basically for every dollar you charge on the card, though do keep in mind that the terms state you do not get the doubled miles deposited until the 13th billing cycle.  Still, assuming that doesn’t bother you, let’s think about the value of an annual fee free credit card that awards 3x cash back on everything for the first year.

The main competitors that jump to my mind are the Capital One Quicksilver card that gives 1.5% on everything (+ a $100 bonus after spending $500 in the first 3 months), the Barclaycard Arrival Plus World Elite MasterCard that gives 2x on everything + 10% back when redeemed on travel, the BankAmericard Travel Rewards credit card that gives 1.5% back to use toward travel (+ a 10,000 point bonus after spending $500 in the first 3 months), and the Citi DoubleCash which gives 1% cash back on purchases and another 1% cash back as you pay.  Of those cards the Citi DoubleCash, BankAmericard Travel Rewards Card, and Capital One Quicksilver also have no annual fee.

I cannot think of any card that offers 3x back on everything for a year with no cap with or without an annual fee.  That can be very valuable, especially for big spenders who want a simple system where they aren’t rotating lots of different cards.  A perfect example of how this could work would be for those that want to pay taxes with a credit card.  There is a fee to do this, starting at 1.87% of the transaction.  That fee makes it not really worth it on most credit cards, but if you were earning 3x for the charge, then you are coming out ahead even with the 1.87% fee!

To be clear, I don’t think the Discover it Miles Credit Card is perfect for everyone as many of us would do better focusing on cards that have big sign-up bonuses, but there is a segment out there for which this card would be very good.  That is especially true if you don’t yet have a Discover card and want to access Discover Deals.

When doing the calculations for your own situation also remember that when you are earning say 2x on travel and restaurants via your Chase Sapphire Preferred, or 3x at US supermarkets via your Amex EveryDay Preferred card, those points are potentially worth more than just one cent per point, depending on how you redeem.  In other words, you can still do better on many categories of purchases by using other cards, but the idea of a straight 3x everywhere isn’t too shabby.

Editorial Note: The opinions expressed here are mine and not provided, reviewed, by any bank, card issuer, or other company unless otherwise stated.

Comments

  1. I plan on getting this card after I reach some spend requirements on other cards. The great thing about cash back is that there are never any stranded points. I get to use every last one.vwhen not meeting a minimum spend on another card, here will be my thresholds: for transferable programs and “good” programs (not Delta) that I earn miles in out side of cc spend:
    1x: discover
    1.5x: likely discover, but if I have a specific goal maybe another program.
    2x border line. likely discover, but if I have a specific goal maybe another program. I don’t have a CSP anymore, only an Ink, but if I had CSP I would likely still use it for restaurants.
    3x-5x other program.

  2. Is it possible to have both Discover it and it miles card? I currently have the standard discover card with rotating quarterly bonus, but this new card is really tempting, I’m not sure if I’ll be asked to close one in order to open another.

    • I asked them because I have the Discover IT card. They said you can have the IT and open the IT Miles card. (I know that has been a point of confusion for most since you couldn’t have multiple Discover accounts in the past)

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