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SimplyCredit: startup offers new debt-consolidation option

Those wishing to consolidate card debt and minimize interest payments now have a new option to consider. It’s called SimplyCredit, and it combines the worlds of debt-consolidation, auto-payments and even credit building.simplycredit logo

There’s nothing quite like SimplyCredit in the consumer lending industry right now. So we spoke with one of the company’s founders about how it works – and with a credit counselor about how to tell whether it’ll work for you.

How SimplyCredit works

SimplyCredit offers a full-service option but also allows you to use some of its services a la carte and in tandem.

If you go with SimplyCredit’s flagship service, here’s the deal:

  • You’ll apply through SimplyCredit for a credit line, the amount and APR of which will be based on your credit history. These lines of credit are provided by SimplyCredit’s lending partners, with SimplyCredit acting as liaison.
  • If you qualify, SimplyCredit will present you with a single offer via one of its partners. If you accept the terms, you’ll then provide SimplyCredit with the information it needs to transfer your card balances to the new credit line. All data collected about your accounts will be stored securely and not be used for third-party marketing purposes, says SimplyCredit founder and CEO Karthik Sethuraman.
  • You’ll make one monthly payment – with interest – to your SimplyCredit line. SimplyCredit uses a simple-interest model. That means, unlike with credit cards, you won’t pay compound interest. Minimum payments will be that month’s interest charges plus 2 to 3 percent of the principle (at simple interest).

    If you were wondering how SimplyCredit makes money, this is how. While most of the interest will be passed back to the lending partner, says Sethuraman, SimplyCredit will keep a portion.

    What if you have a 0 percent balance transfer deal on one of your cards? Will SimplyCredit roll that into its credit line and charge you interest on it? No, Sethuraman says. Instead, it will make the minimum payment on that card on your behalf (more on that in a moment) and then move any remaining balance over to the SimplyCredit line before the card’s promotional period ends. If you have a card with an interest rate lower than what SimplyCredit gives you, that card also won’t be rolled into your SimplyCredit line.

    “Our payment system is designed to do the right thing for the consumer,” Sethuraman says. “… What is the right thing I would do myself? That’s what I want SimplyCredit to do.”

  • Continue using your credit cards if you wish. You can enroll your cards for auto-payment, meaning SimplyCredit pays off the balances automatically. The information you provide to enroll your cards will be roughly what you’d give to, Sethuraman says. He estimates that most major credit cards will be compatible with its system.

    Here’s where you need to make a decision: You can have your future card balances rolled into your SimplyCredit line and paid off that way. Keep in mind, though, that will involve paying (simple) interest on those balances. Or, you can have SimplyCredit pay off future card balances from your checking account. You can choose between making full payments to your cards, or just the minimum. But, as Sethuraman points out, if you’re trying to minimize interest, you’ll want to set payments to “full.”

    However you do it, payments will be made to your cards about a week before the due date, circumventing interest charges from the card issuer if you select the “full payment” option, Sethuraman says.

    “Essentially, you’re getting your grace period back,” he says.

  • If you don’t have enough between checking and your credit line to cover all your card balances and your monthly payment to SimplyCredit, SimplyCredit will pay your minimum payments (in order of most interest to least interest).

    If you miss your monthly payment to SimplyCredit and become 30 days late, your delinquency will be reported to the credit bureaus (in accordance with the reporting policies of whichever lending partner provides your loan).

    As you near your credit limit, however, expect SimplyCredit to be in touch, Sethuraman says, asking you to devise a plan. SimplyCredit doesn’t charge late fees or penalty interest (and will even eat the late fee if its lending partner charges one).

    “We don’t want to be like another credit card company,” Sethuraman says. “The only way we can make that happen is to have more of a one-one-one discussion.”

SimplyCredit is rolling out its full-service product gradually. If you’re interested, you can reserve a spot in line via its website.

If you don’t want to use SimplyCredit’s credit line, you can sign up for just the auto-payment service, which is free. Within the next couple weeks, the company will be launching a new option that lets you calibrate a payment plan that minimizes interest, or that boosts your credit scores over time.

“We’ve been getting a lot of people saying, ‘Can you just tell me what I should do, even if I don’t want to go through the whole [credit limit] process?'” Sethuraman says.

A more consumer-friendly option?

Sethuraman used to work for FICO, helping major credit card providers manage risk for their lending portfolios. He noticed that, even when issuers reduced their risk, they wouldn’t make their terms more transparent and lenient. His frustration with that fueled the launch of SimplyCredit, he says, – and its business model that includes no late fees, compound interest or penalty interest rates.

In return for the lion’s share of the interest, SimplyCredit urges its lending partners to offer terms in line with its philosophy.

“We want to establish sane credit terms,” he says.

While other options abound for consumers who want to manage debt, the hybrid nature of SimplyCredit (debt consolidation + interest reduction + automatic payments), Sethuraman says, makes the company a more “holistic” option than other debt-reduction tools. Balance transfer cards, he says, land all but the most diligent consumers in a trap of multiple APRs. Debt consolidation loans, meanwhile, don’t offer enough support after the card balances go away.

“The truth is that the balances you wipe away through the use of a personal loan come back on the credit card after six months, a year,” Sethuraman says. “Consumers get these loans, pay off their cards, and six months later, they have to use their card again and the balances come back.”

Things to consider

As with any credit product, you’ll want to make sure SimplyCredit is a good fit for your situation. We asked Bruce McClary, of the National Foundation for Credit Counseling what you should consider before signing up:

  • The interest rate: SimplyCredit’s interest rate may not be the lowest you’d qualify for, McClary says.

    So shop around. First, pull your credit reports and check your FICO scores.

    “Never go to lenders and apply for anything without knowing your score and the details of your credit report,” McClary says

    Then approach lenders directly. “You can ask a lot of questions without initiating the official application process,” McClary says, including which APRs consumers with your credit standing qualify for.

    Finally, narrow your options to a couple lenders and apply. Multiple applications will mean short-term credit damage from inquiries, McClary says, but ensuring you get the lowest APR possible can save you a lot of money, especially if your balances are large.

  • The lender: If you apply with SimplyCredit, research the lending partner offering the loan, McClary suggests. And do the same for any other lender you apply with. “Find out about their reputation,” he says.
  • Your motives: If you’re looking for a service to manage multiple card payments for you and simplify your debt, SimplyCredit may be a good fit, McClary says. But if your debt problems are severe and your finances completely unmanageable, it’s probably not enough, he says.

    “While this service may be helpful for certain individuals, it’s not necessarily for someone in dire straits,” says McClary.

    If that’s you, McClary recommends meeting with a credit counselor to see if a debt management plan or financial coaching is advised.

  • Other options: Before looking into debt consolidation of any kind, look at your budget.

    “Maybe by re-engineering your budget, you can power-pay your debt and get it off the books faster,” McClary says.

  • The risks of outsourcing: While automatic payments and consolidation may prevent you from forgetting to make payments to your many cards, that convenience can cause you to lose touch with your finances, McClary says. So don’t let a streamlined service keep you from regularly reviewing your bank statements and spending.

    “The more you outsource, the more you’re taking your hands off the wheel,” McClary says. “Every individual should have complete knowledge of and hands-on interaction with every financial transaction they make.”

A closer look at American Express’s Serve Cash Back

American Express’s card offerings range from top-tier charge cards for prime customers, to prepaid cards (which often appeal to customers with thin or poor credit). Now it’s offering a new product that combines the appeal of prepaid with the cash-back rewards traditionally associated with credit cards: the Serve Cash Back.Amex serve cash back

However, this card is good fit only for a specific type of consumer. Our review will help you decide if it’s for you.

American Express is a CreditCardForum advertising partner.

The card

Just like the regular Serve card, the Serve Cash Back allows you to add money via cash reloads at retailers, direct deposit, mobile check deposit or a bank account. The cost of reloading depends on the method. For example, cash reloads AmEx’s retail partners is free, while using a third-party reload (widely available at many chain stores) would entail paying that third party’s fee. There are no fees for direct deposit or reloads from a bank account.

The fees

As with the whole Serve line of prepaid cards, the fee schedule on the Serve Cash Back is pretty simple. The only fees you need to worry about are:

  • $2.50 ATM fee per withdrawal at non-network ATMs. American Express charges no ATM fees within the MoneyPass ATM network.
  • Any third-party fees for retail cash reloads.
  • $5.95 monthly fee (no fee in New York, Vermont or Texas). That’s $71.40 per year.
  • 2.7 percent foreign transaction fee

This card’s fees are transparent, but note that annual fee. The regular Serve’s monthly fee is $1 ($0 if you direct-deposit at least $500 that month). That $5.95 monthly fee becomes important when it comes to analyzing the rewards value of the Serve Cash Back.

The rewards

You get 1 percent cash back on all purchases made with the card. To redeem, you’ll log in and apply your rewards balance toward future purchases.

Prepaid cards that offer rewards are rare, and ones that are this flexible are non-existent. PayPal’s prepaid card offers cash back, but only on certain purchases, and you have to opt in to offers to claim be eligible. The Serve Cash back is therefore a unique product.

However, as with all rewards cards, number crunching is advised. The biggest question is usually, “Will this card’s rewards make up for the annual fee?” To that end, we ran the numbers:

  • You will need to spend $595 a month on the card ($7,140 a year) to cancel out the annual fee.
  • You will need to spend at least $495 a month on the card ($5,940 a year) for it to come out ahead of the regular Serve card (with the $1 monthly fee).

Is this card a good choice?

The answer depends on your spending habits — and on less-quantifiable factors. In general, though, the consumers best suited for this card are those who:

  • Can spend enough money on the card: If you put enough spending on this card, you could make up for the annual fee. Say you spend $1,000 a month. You’d earn $45.90 a year in rewards after subtracting out the annual fee.
  • Want a prepaid card and have absolutely no interest in a credit card or bank account: There are plenty of no-annual-fee credit cards that offer more rewards than the Serve Cash Back does. They also offer additional perks, such as extended warranty, rental car insurance coverage and purchase protection that prepaid cards don’t.

    If you’re considering a prepaid card, though, you’ve probably got your reasons. Perhaps you have really bad credit and want the convenience of plastic without the need for a credit check. Prepaid cards also often appeal to those who can’t get — or don’t want — bank accounts or the debit cards tied to them. However, if you spend less than $495 a month (or conduct most of your transactions in cash), consider the regular Serve over the Serve Cash Back. It offers no rewards, but its lower monthly fee could cost you less in the long run.

Trying to build credit? This card won’t help

If your ultimate goal is to build good credit, you’re going to need to think beyond prepaid cards. While a Serve card can serve as a stopgap for convenience and online shopping until you qualify for a good credit card, prepaid cards don’t report to the credit bureaus and therefore won’t help your credit.

To begin bolstering your less-than-perfect credit, check out our listing of credit cards for fair credit. If you’re a student, an issuer may be willing to give you a leg up with a student credit card, even if you have no credit history.

Not a student and have less-than-fair credit? Consider getting a secured card. Your limit will be low, there may be an annual fee (and no rewards), and the perks are, shall we say, streamlined – but secured cards have been the first rung on the credit ladder for many. Check out our list of secured cards.

Updated August 24, 2015

Review: Compare AmEx OPEN cards for your business

If you’re looking for a card for your small business, the cards in the OPEN network from American Express (a CreditCardForum advertising partner) may have piqued your interest.

OPEN encompasses a suite of cards created for business owners. There are about a dozen cards in the program. While the cards’ benefits differ, they all offer OPEN benefits (an assortment of perks specifically for business owners). Amex OPEN logo

Our review will help you understand the OPEN program and pick the specific American Express business card that’s right for your business.

An overview of OPEN

Whichever OPEN card you choose, it will have the following benefits:

  • Access to OPEN Savings: When you make a purchase with a partner company, you’ll get a 5 percent discount (for cash-back cards) or 2 extra Membership Rewards points per dollar spent (for cards earning MR points). Current partners include FedEx, Hertz, HP and Hyatt. If you use your American Express business card with these partners, expect your savings or MR points to be credited automatically.
  • Bookkeeping tools: Through the ReceiptMatch app, you can add receipts and notes to your transactions. You can also sync your online account with QuickBooks, so that you can label your transactions with your QuickBooks tags and send purchase data straight to QuickBooks. Your employees can use ReceiptMatch as well to upload receipt images for purchases made with their employee cards.
  • Ability to appoint an Account Manager: You can assign a business partner or employee the role of Account Manager on your card. Depending on the level of access you allow, the Account Manager can pay the bill, review statements and dispute charges.

Which card should you pick?

The OPEN tools and benefits were designed with small-business owners in mind, which could make any one AmEx’s business offerings a good fit for your business. Yet each of the cards has unique perks and rewards. Use our suggestions below as a guide.

For the new business trying to rein in costs – SimplyCash Business Card

Your new business is guzzling all your money to maintain itself — so it may come as a relief that this card is rewarding but affordable:

  • No annual fee; no annual fee for additional employee cards
  • 5 percent cash back at office supply stores and phone services purchased directly from U.S. service providers
  • 3 percent back from a category of your choice (airfare directly from airlines, hotel rooms directly from hotels, car rentals directly from rental companies, U.S. gas stations, U.S. restaurants, eligible U.S. advertising purchases, U.S. shipping company purchases.
  • 1 percent back on other purchases

This card gives you rewards for some of the mundane but very necessary money-suckers for start-ups (like office supplies and phone service). Because rewards come in the form of cash back, you can funnel them right back into your business instead of bartering for less-tangible things like airline miles. Finally, with no annual fee, you don’t have to worry if the card is too expensive to justify.

For the business owner who wants to farm MR points – The Business Gold Rewards Card

This one is a charge card, so you must pay in full every month. It also has an annual fee of $175 (waived the first year) and a $50 annual fee for the first additional employee card (waived the first year; additional employee cards have no fee). What makes it stand out is that it lets you pad your MR point balance on a variety of common business expenses:

  • 3X points (on up to $100,000 in purchases per year) on one category from the following list: Airfare directly from airlines, eligible U.S. advertising purchases, U.S. gas stations, U.S. shipping, computer and cloud computing purchases from select providers
  • 2X points (on up to $100,000 in purchases per year) on the four remaining categories
  • 1X points on other purchases (and on category purchases after the $100,000 limit has been reached)

If you have time to maximize them, MR points can be incredibly lucrative, especially if you transfer them into AmEx’s airline and hotel partners. If you have large expenses that align with this card’s categories (and maximize those categories), you could earn hundreds of thousands of these points every year and use them for free first-class flights and hotel stays.

For the business owner who needs payment flexibility – The Plum Card

There’s nothing quite like this card on the market right now. It offers a little leeway if you need a little extra time to pay the balance — and rewards you if you pay early. Here’s how it works:

  • If you need more time: You can pay 10 percent of the balance from new activity on your statement (plus whatever amount remains from previous balances) by the payment date and get 60 extra interest-free days to pay the rest.
  • If you pay early: Pay your card bill (at least the minimum) within 10 days of your statement closing date and get a discount of 1.5 percent on the amount paid, which will show up as a statement credit in the following cycle.

The annual fee for this card is $250 (waived the first year), and there’s no fee for additional employee cards.

For businesses with an unpredictable cash flow, this card is simultaneously a lifeline (if you need a little more time to carry a balance without interest) and an incentive to pay early. Plus, for a limited time (until Aug. 24, 2015), you get an additional $200 statement credit for every $10,000 you spend on the card (up to $600 back).

For the business owner who wants rewards but doesn’t want to mess with categories – Blue for Business Card

  • No annual fee (for primary card or employee cards)
  • 1 MR point per dollar on all eligible purchases
  • 2 MR points per dollar spent through American Express Travel
  • 30 percent annual relationship bonus each year. This bonus is equal to 30 percent of eligible purchases charged to your card each year. You’ll receive it automatically within 30 days of your account anniversary. In other words, if you spend $20,000 on the card in a year, you’ll get a 6,000-point bonus.

This card gives you a bonus on all your spending, even if it doesn’t neatly fit into the “business” categories assigned to the cards above. For example, if you own a food truck, you may not be traveling a lot for business or buying office supplies. You’ll still get a 30 percent annual bonus on all the food containers, condiments and ingredients you bought, if you purchase them with this card.

For the business owner who wants to travel in comfort – Business Platinum card

If your business requires lots of travel, this card ($450 annual fee) makes being on the road less of a slog with the following benefits:

  • Lounge access: Complimentary access to the Delta Sky Club, Airspace lounges, Priority Pass Select lounges and Centurion lounges.
  • Reimbursement for TSA Precheck or Global Entry: TSA Precheck ($85) smooths out your passage through TSA, while Global Entry ($100) cuts the line-standing when you return to the U.S. from abroad. Pick one, and get reimbursed for the fees via statement credit.
  • Status at Starwood and rental car companies: Automatically get Gold Preferred Starwood Membership (with benefits like room upgrades and late checkouts), as well as status with Hertz, Avis and National Rental Car (with benefits like upgrades and skipping the lines).
  • Free Wi-Fi: You get complimentary Boingo membership as well as 10 Gogo inflight Internet passes each year.
  • International airline program: When you purchase an eligible business or first class international ticket on a participating airline, you get a second ticket for only the cost of surcharges, fees and taxes. If you want to tack a vacation onto a business trip, this allows you to bring a traveling companion.
  • $200 airline fee credit every year: You can use this toward things that make flying more enjoyable, such as in-flight refreshments and entertainment.

The Business Platinum card isn’t exactly a rewards powerhouse, earning just 1 point per dollar on all eligible purchases and 2 points per dollar through the American Express Travel website. But the perks can help you stay rested and focused on work.

While the American Express OPEN products have a lot to offer, they’re not the only business credit card products out there. Options abound from various issuers with various annual fees, reward structures and benefits.

Making sense of American Express’s Plenti program

The Plenti rewards program from American Express (a CreditCardForum advertising partner) is, as AmEx says, the first of its kind. It combines features of store loyalty programs, card-linked offer programs and traditional credit card rewards into an absolutely sprawling platform.

Uniqueness aside, should you try to cash in on Plenti – or apply for the credit card tied to the program? We took a deep dive into the details and found that Plenti has potential if you can get a grip on all its moving parts.

Program details

There are two layers to Plenti – the rewards program and the Plenti credit card (which can boost your earnings but isn’t required for the program).

Plenti Credit CardPlenti credit card
You don’t have to get this card to join Plenti, but, if you do, you’ll earn 3 Plenti points per dollar at U.S. supermarkets (on up to $6,000 in purchases per year), 2 Plenti points per dollar at U.S. restaurants and 1 Plenti point per dollar spent on all eligible purchases anywhere. The card has no annual fee and comes with the usual benefits befitting a no-fee AmEx: Extended warranty, purchase protection, return protection, secondary rental car insurance coverage and travel accident insurance. It also has an EMV chip.

Plenti program
If you don’t want to get the credit card, you can still join the Plenti program. You just won’t get the boost of points for virtually every dollar spent — and will be limited to earning rewards with the program’s partners only. Sign up online, and you’ll receive a Plenti loyalty card and key tag in the mail. Whenever you make a purchase, you will present your Plenti card at checkout (or insert it into the card reader) and follow the directions. If you’re shopping online, you’ll use your Plenti card number. Points you earn will automatically be deposited into your Plenti account.

The program is vast, but here are the basics:


  • Shopping at Plenti partners: You’ll earn points when shopping at Plenti’s partners, including AT&T, Exxon, Macy’s, Mobil, Nationwide, Rite Aid, Alamo Rent A Car, Direct Energy, Enterprise Rent-A-Car, Hulu, National Car Rental and more (full list here). You can pay however you wish (credit card, debit card, cash), but you will still need to present your Plenti loyalty card. The only exception at this time is if you’re shopping at Macy’s and have linked your Plenti card to your Macy’s credit card, in which case your Macy’s card will suffice.

    The number of points you’ll earn per purchase at partners varies, so check the terms before you shop.

  • Utilizing relationships: You can stack rewards by getting your other credit and loyalty cards involved. For example, at Macy’s, using your Macy’s credit card with your Plenti card gets you 10X the points on the same purchases:
    Plenti Rewards Program at Macy's
    Even better, if you link your Macy’s American Express card, you can get Plenti points by using it outside of Macy’s as well.
  • Claiming bonuses: You can earn extra points by shopping in the Plenti Online Marketplace. You can also find and activate special offers online or within the Plenti app for extra points on certain purchases. Such bonuses generally have to be activated in advance — but in-store signage at some retail partners will guide you to purchases that get you extra Plenti points with no advance activation needed.
  • Transferring Membership Rewards points into Plenti: You can top off your Plenti balance by transferring Membership Rewards points earned on another American Express card into the program (500 MR points gets you 400 Plenti points). We recommend thinking long and hard about this decision, however. For one thing, you’re sacrificing 100 MR points for every 500 you transfer. For another, Membership Rewards points can be transferred directly into various hotel and airline reward programs, a valuable perk that Plenti does not offer.

Using your Plenti points

  • Redeem as you shop: You’ll need a balance of at least 200 points to begin redeeming. Instead of logging in to online banking and cashing in your rewards, you will use them in real time at the point of purchase. Present your Plenti card (or insert it into the card reader) and follow the instructions. If you have enough points, you’ll be prompted to use them for purchase. At Exxon, for example, you might see this:Plenti at Exxon
    As of this time (November 2015), the partners you can redeem points at are At&T, Macy’s, Rite Aid and participating Exxon and Mobil stations. While you can earn points at dozens of partners, the retailers listed above are the only ones you can redeem with. The value of your points depends on where you redeem them, but, according to the Plenti program’s site, they’ll be worth at least 1 cent each. To calculate the value of your Plenti points on a case-by-case basis, use these formulas.

Pros and cons

Depending on your goals, what might be a con to one person might be a pro for you. So instead of a black-and-white pros-and-cons list, here’s a list of things to consider.

  1. Exclusions: All reward programs have exclusions, and Plenti is no exception. One of the most notable is that you generally can’t earn Plenti points when purchasing gift cards at partner retailers. That may be disappointing, as buying gift cards for extra rewards is a favorite strategy for many reward chasers. Certain luxury brands at Macy’s are also not eligible for rewards, which may be disappointing for anyone who just bought a $500 purse.
  2. An abundance of options: You can earn extra Plenti points on things that fall outside traditional credit card rewards programs, including paying your insurance premiums and adding a new line to your wireless service. And then there all those ever-changing, limited-time offers, which can earn you even more. This makes Plenti a robust and flexible program — but chasing all your options might exhaust you. If so, a more consistent cash-back program may be a better fit.
  3. You can use rewards in real time: Cashing in your rewards at the register may be preferable to making time to log into a rewards account and mulling over your options. If you’re the type to let your rewards collect dust for years, Plenti may be the anecdote. However, it can be hard to make sure you’re getting the best value for your points when a line is forming behind you and you have mere seconds to decide if you’d like to redeem your points on the spot.
  4. Specific redemption partners: The partners that allow you to earn points far outnumber the partners that allow you to redeem them. The redemption value (of at least 1 cent per point) isn’t bad – and gasoline, groceries and clothing purchases are exactly the kind of regular expenses for which consumers might welcome a discount. But if you don’t frequently make purchases with one of the redemption partners (Exxon, Mobil, Rite Aid, Macy’s and AT&T), the redemption options may not be convenient for you. American Express could always add more redemption partners in the future, though.
  5. You can keep using your existing cards: You can present your Plenti card or key tag to collect Plenti points – and then pay with any other rewards card and collect its points, too. For example, you might present your Plenti card at Macy’s and collect 1 point for every $10 spent – and then pay with a rewards card offering 5 percent cash back that quarter on department store purchases.

The bottom line

Plenti solves one of the most common problems with rewards – not using them. Due to its real-time, streamlined redemption scheme, you’ll be invited to use your rewards whenever you check out at a partner retailer. The program also doesn’t have to interfere with your existing reward strategies because you can use any credit card for the actual payment. That means you can embrace Plenti’s short-term, instant gratification system without surrendering the long-term strategizing you’re doing with your travel rewards cards, for example.

The Plenti credit card does add some additional value thanks to its bonus categories. Again, though, you run up against the limited options for redeeming rewards; other rewards cards give bonus points for groceries and dining and allow you to redeem for cash. However, with no annual fee, it might be worth using this card at merchants that fall outside your existing rewards cards’ bonus categories.

Time and sanity are also things to consider when it comes to your rewards strategy. Plenti has, well, plenty of options for boosting your earnings. If you’re the type to obsess over squeezing every possible reward point out of ever purchase, Plenti could become a time-consuming hobby.

Discover has added a new member of the ‘it’ family — the Discover it® Miles – Double Miles your first year card, an alternative to the issuer’s existing cash-back cards (which offer 5 percent back or 2 percent back, depending on the card you have). So does this new addition outshine its older siblings (and similar cards on the market)? Read on so you can decide for yourself.

Getting the card

According to a Discover spokesperson, Discover began accepting new applications only for the it Miles card when it was initially released back in February. In other words, you couldn’t product-change from an existing Discover card yet. Whether that is still the case is unclear, but it never hurts to ask. However, if you already have a Discover account and would like to also open the it Miles, keep in mind that you can be the primary cardholder on two Discover cards simultaneously. However, your first account must be open for a minimum of 12 months before you can apply for the second. As these two accounts would be separate, you would have separate rewards balances, not a pooled one.

Benefits and rewards in a nutshell

The card is being marketed to travelers and offers fixed-value “miles,” which you can redeem for a statement credit for recent travel expenses. That puts it in the category of general-purpose travel cards like the Capital One Venture (and Venture One), the Barclaycard Arrival (and Arrival Plus), the BankAmericard Travel Rewards card and the Blue Sky card from American Express (a CreditCardForum advertising partner). You may remember the now-discontinued Miles by Discover card, but this new product is quite different.

Here’s a run-down of the card’s defining features:

  • No annual fee
  • 1.5 miles per dollar spent: Remember, these are generic miles you’ll cash in for statement credits – not miles tied to a specific airline.
  • Double miles after your first year: Following your first 12 consecutive billing periods, you’ll get a bonus equal to all the miles you earned during those billing cycles. Note that this benefit is one-time only – you don’t get it after your first year. There is no cap on the bonus miles you can earn.
  • In-flight Wi-Fi credit: If you purchase Wi-Fi access on a flight with your it Miles card, you’ll get a statement credit to cancel out your purchase within 7 days (up to $30 per year). This benefit renews with every cardholder anniversary.
  • Free FICO score: As with Discover’s other cards, you get free access to your TransUnion FICO score.
  • No foreign transaction fees

How much your miles are worth

Here’s where it gets interesting. For most cards marketed as travel cards, you’re either restricted to redeeming for travel purchases, or you get a better value for you points when you redeem for travel compared to cash back.

For the it Miles card, here’s how it works, according to the card’s terms and conditions:

Discover it Miles redemption

What this boils down to is that you can redeem for statement credits against travel expenses OR for cash back (deposited into an account) and get the same value of 1 cent per mile. Redeeming for statement credits is probably easier and faster. Yet, if you’re willing to link a bank account and wait for the electronic deposit, you don’t have sacrifice value if you want cash.

For reference, the travel expenses eligible for statement credits are: airline tickets, hotels, car rentals, cruises, tour operators, vacation packages (when purchased through airlines, travel agents and travel websites), local transit, ferries, rail tickets, taxis, limos and charter buses.

While some cards have redemption minimums, Discover is more flexible – you can redeem as little as 1 mile at a time.

How it compares

Which card is right for you is a complex decision, and no review will cover all the factors you should weigh. But here are a few things to consider:

Sign-up bonus or lack thereof: The card isn’t advertising any sign-up bonus in the traditional sense right now (as of March 2015). Instead, you get double your miles the first year. How much that will get you depends on how much you spend on the card.

So, on one hand, the it Miles card gives you complete control over how big a bonus you get – if you can concentrate all your spending on the card, you may well end up with a lot of bonus miles.

On the other hand, other cards in the same field might get you a bonus with a lower spending threshold. For example, a card might give you 20,000 bonus miles/points or $200 cash back if you spend $1,000 in the first three months. Cards with annual fees might give you even more. If you spread out your spending across several cards, that type bonus structure may be a better fit, since you can rack up tens of thousands of points for only $1,000 in spending. Plus, with the it Miles card, you have to wait a full year to receive your bonus, so it may not serve your needs you if you were hoping for pile of bonus miles to use on a trip a few months from now.

The Wi-Fi reimbursement: While $30 a year isn’t much, this is a rare perk among no-annual-fee cards. Assuming you’d buy in-flight Wi-Fi anyway, it saves you money. If you wouldn’t, then you’re getting a small luxury for free.

No bonus categories: That’s good or bad, depending on how you look at it. On one hand, you’re getting a steady, competitive rate of return for a no-annual-fee card — 1.5 percent — without having to keep track of categories. That places this card in between the 1.25 percent you get back with the no-fee VentureOne and the 2 percent you get back with the $59-a-year Venture. The BankAmericard Travel Rewards card is probably the most similar, earning 1.5 percent back on everything (plus a 10 percent bonus on points earned if you bank with BofA).

The no-fee Barclaycard Arrival, meanwhile, gets you 1 percent back on most spending and 2 percent back on travel expenses and restaurants. If you spend a lot on travel and dining, those categories can really help you: a $5,000 travel purchase, for example, would get you 10,000 points with the Arrival and only 7,500 with the it Miles card.

And let’s not forget the regular old Discover it card – that gives you 5 percent back on certain rotating categories for up to $1,500 in purchases each quarter. Discover has a reputation for lucrative bonus categories, from gas, to restaurants, to home improvement and more. To put that in perspective, $1,500 in bonus-category purchases would get you $75 with the regular it and $22.50 with the it Miles.

The verdict

This card isn’t a bad fit if you’re looking for a low-maintenance workhorse of a card. For no annual fee, you’re getting a respectable 1.5 percent back with the flexibility of redeeming for travel or cash.

Just remember that the first-year bonus on this card is tied directly to how much you spend and requires you to wait an entire year. If you can funnel a lot of (if not all) you spending through this card for a whole year, its bonus structure may benefit you. If not, consider cards that reward you a surge of points after just a few months if you satisfy the minimum spending threshold.

If you do decide to go for the it Miles card, a good move might be to pair it with the regular Discover it card. That way, you can use the ‘it’ for bonus-category purchases and switch over to the it Miles for everything else.

However, remember that your existing Discover account must be open for 12 months before you can get a second card. So this strategy would work only for those who are willing to wait a year, or who have been Discover cardmembers for a year already. There are also some complexities with having two Discover cards, as your rewards pools remain separate. That’s a hassle for sure, but if you’re redeeming for cash back and statement credits, this may not matter, especially since Discover doesn’t have a redemption minimum.

Right now, there are two offers for the regular Discover it card:

Updated August 6, 2015