Review: Discover More

As you’re probably aware, when it comes to cash-back credit cards, there are different types. Some cards offer a fixed percentage on whatever you buy. Others offer bonus cash back on certain types of transactions consistently throughout the year. Then there are those offering elevated rewards on certain categories, but the categories change quarterly.

The Discover More Card falls into the final category. To benefit from this card, you’ll need to buy from the right type of merchant at the right time. Here’s the low-down…

Advantages:

• Earn cash back. Receive 1 percent cash back on most purchases, and 5 percent cash back on transactions from bonus spending categories. For example, department store purchases and all online purchases are eligible for the bonus cash back in September, October, and November of 2012.
• Receive a promotional financing offer. New cardholders are eligible to receive a 0 percent APR on purchases and balance transfers for 15 months, but there’s a 3 percent balance transfer fee.
• No annual fee. It’s not just waived the first year: There is never an annual fee.
• No foreign transaction fees. Unlike most credit cards, there is never an additional charge for using your card across international borders. In fact, this charge has been eliminated on all Discover products.

Disadvantages:

• Minimum threshold for decent cash back. The first $3,000 of spending each year is only eligible for a 0.25 percent rate of cash back. That equates to merely $7.50.
• Many purchases are excluded from standard and bonus cash back. In addition to the first $3,000 of annual purchases, transactions at warehouse and discount stores also receive the paltry 0.25 percent cash back.
• Quarterly limit on bonus cash. Cardholders can only earn the 5x bonus cash back on their first $1,500 in purchases from eligible bonus categories each quarter. That means the most you can get from the five percent bonus is $75 per category, per quarter.
• High interest rates. Cardholders who carry a balance incur interest at a rate between 10.99 and 19.99 percent, depending on their creditworthiness. Like most reward cards, these rates are higher than those of other low interest rate cards, so cardholders who carry a balance should forget rewards and focus on finding the lowest interest rates.
• Limited acceptance.

Bottom Line:

Get it if: You want to earn some cash back, and are fine with all the restrictions.

Forget it if: You believe that reward cards should always return at least 1 percent cash back on all purchases.

(Note: While we attempt to be completely objective when reporting on credit cards, this site may be compensated by issuers when a reader applies for a credit card through the links within credit card stories or on our credit card search page.)