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Discover it Cash Back review: Earn 5% cash back for a limited time at grocery stores and Walgreens, CVS

Twenty/20

If you are looking to maximize your rewards, a 5% cash-back card73棋牌 can be a smart addition to your wallet. Oftentimes, they have standard interest rates and no annual fee.

Discover offers four different credit cards that provide 5% cash back on the first $1,500 in purchases made each quarter in select categories (then 1%). Consumers can choose from the following cards: , , and (CNBC Select's pick for best college student cash-back credit card),.

Discover's 5% cash-back calendar for 2020 includes grocery stores, gas stations, select ride-shares, restaurants, PayPal and online shopping sites like Amazon.com and Target.com. These eligible merchants rotate quarterly, and cardholders must enroll each quarter to receive the benefit at select merchants.

Below, CNBC Select breaks down rewards, benefits and fees to help you decide if it's the right card for you.

Discover it® Cash Back
  • Rewards

    73棋牌5% cash back at different places each quarter after you activate bonus categories (on up to $1,500 in purchases, then 1%). Plus, unlimited 1% cash back on all other purchases.

  • Welcome bonus

    At the end of your first year, Discover automatically matches all the cash back you earned

  • Annual fee

    $0

  • Intro APR

    0% for the first 14 months on purchases and balance transfers

  • Regular APR

    13.49% to 24.49% variable on purchases and balance transfers

  • Balance transfer fee

    3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*

  • Foreign transaction fee

    None

  • Credit needed

    73棋牌Excellent/Good

  • *See our methodology, terms apply.

Pros

  • Cash-back program
  • No annual fee
  • No fee charged on purchases made outside the U.S.
  • Generous welcome bonus

Cons

  • Bonus categories must be activated each quarter
  • Cash-back program limits 5% cash-back earnings to $1,500 a quarter
  • Fee charged on balance transfers
  • Estimated rewards earned after 1 year: $696
  • Estimated rewards earned after 5 years: $2,088

Rewards totals incorporate the cash back earned from the welcome bonus

On Discover's secure site

Discover it Cash Back review

  • Rewards
  • Additional benefits
  • Fees
  • Bottom line

Rewards

73棋牌Like the , the offers 5% cash back in rotating categories on up to $1,500 in combined purchases after you activate the bonus every quarter. After you reach the limit, it's 1% on all purchases. If you maximize your spending in these categories, you could earn $75 cash back each quarter on top of the 1% cash back you earn in all the other categories.

Now until March, you can earn 5% cash back at grocery stores (excluding Target and Walmart), Walgreens and CVS. Activation for the next quarter's bonus categories starts Feb. 1, 2020.

This card has a unique welcome bonus where Discover automatically matches all the cash back you earned at the end of your first year. There is no limit to how much Discover will match.

CNBC Select calculated how many rewards the average American can earn if they optimize the way they use their Discover it Cash Back. We worked with the location intelligence firm Esri, who provided us with a sample annual spending budget of $21,852.

The budget includes six main categories: groceries ($5,019), gas ($2,394), dining out ($3,365), travel ($2,154), utilities ($4,959) and general purchases ($3,961).

Here's a breakdown of how much cash back you can roughly earn in each category, annually:

  • Groceries: $100.38
  • Gas: $47.88
  • Dining out: $67.30
  • Travel: $21.54
  • Utilities: $49.59
  • General purchases: $61.31
  • Total: $348

73棋牌Cardholders can earn an estimated $696 in cash back the first year (including the cash back from the welcome bonus) and a total of $2,088 over five years.

The cash back doesn't expire and you can redeem your rewards at any time for statement credits, gift cards, merchandise and more.

Additional benefits

73棋牌The offers a competitive 0% APR for the first 14 months on purchases and balance transfers (then 13.49% to 24.49% variable APR). Its contactless tap-to-pay technology makes it fast and easy to pay at millions of places.

This card also automatically waives your first late payment fee but don't make missing payments a habit. Beyond the additional fees, you risk damaging your credit score and potentially paying a higher penalty interest rate. (Check out CNBC Select's steps you can take to prevent late payments.)

Fees

The Discover it® Cash Back card has no annual fee and no foreign transaction fee73棋牌. There is a 3% intro balance transfer fee and up to 5% fee on future balance transfers (see terms).

Bottom line

Trying to optimize your quarterly credit card usage can be a lot of work, so it is worth it to do the research to make sure a 5% cash-back credit card is right for you.

However, using a cash-back card on a daily basis can save you money, and if you don't mind rotating your rewards each quarter, the may be great for your spending habits.

For other options, CNBC Select's top pick for cash-back card73棋牌, the , offers 2.5% cash back on all purchases (up to $250 in cash back rewards per billing cycle). It does have a $99 annual fee, which is waived the first year.

Never had a credit card before? Here's the best starter card for your wallet

73棋牌. The company's data development team provided the most up-to-date and comprehensive consumer spending data based on the 2018 Consumer Expenditure Surveys from the Bureau of Labor Statistics. You can read more about their methodology .

73棋牌Esri's data team created a sample annual budget of approximately $21,852 in retail spending. This budget is comprised of the most common spending categories, including groceries ($5,019), gas ($2,394), dining out ($3,365), travel ($2,154), utilities ($4,959) and general purchases ($3,961). General purchases include items such as housekeeping supplies, clothing, personal care products, prescription drugs and vitamins, and other vehicle expenses.

CNBC Select used this budget to estimate how much the average consumer would save over the course of a year, two years and five years, assuming they would attempt to maximize their rewards potential by earning all welcome bonuses offered and using the card for all applicable purchases. All rewards total estimations are net the annual fee.

73棋牌While the five-year estimates we've included are derived from a budget similar to the average American's spending, you may earn a higher or lower return depending on your shopping habits.

Information about the Chase Freedom® and Alliant Cashback Visa® Signature Credit Card has been collected independently by CNBC and has not been reviewed or provided by the issuer of the cards prior to publication.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the CNBC Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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