Are you considering the Discover it card, but don’t think you’ll get much out of the rotating 5 percent categories? Discover recently started offering another version of the ‘it’ card – the Discover it® chrome. Like the original ‘it,’ the chrome has no annual fee.
Just as with the original ‘it’ card, there are two iterations of the chrome: A regular version and a student version. The rewards are the same. The major differences between the regular and student chrome cards are different 0% intro period offers and a different APR range.
Here’s what the cards are offering for new members:
Discover it chrome:
- Your TransUnion FICO score – free every month
- Purchase protection: Eligible purchases made on your Discover card are protected for the first 90 days (for up to $500) if stolen or damaged.
- Extended warranty: You get an extra year on warranties of 36 months or less.
- Return protection: If you’re unhappy with a purchase and the store won’t take it back, Discover might be able to help. Within 90 days of the purchase, Discover will refund qualifying purchases, up to $500.
- Price protection: If you purchase something on your Discover card and find a lower price within 90 days, you’re eligible for reimbursement for the difference, up to $500.
- And more
- $700 per quarter at restaurants
- $300 per quarter on gas
- $0 on home improvements during the second quarter and $0 at retailers that qualify for the ‘it’ card’s holiday shopping category
- $1,500 per quarter on restaurants
- $1,000 on a big home improvement project during Q2
- $600 per quarter on gas and an additional $600 in Q3 for a summer road trip
- $200 on holiday gifts that qualify for the 5 percent bonus on the ‘it’ card in Q4
According to Discover’s media relations department, cardholders can convert from the original 5 percent card to the chrome version (or vice versa) by calling customer service. Read on to learn if the Discover it chrome is a good fit for you – or a good replacement for the original version if you already have it.
New (probably simpler) rewards
The chrome card offers a permanent 2 percent cash back on spending at gas stations and restaurants and 1 percent on everything else. You get the 2 percent rate for the first $1,000 in combined restaurant and gas purchases each quarter. If you exceed that amount, you’ll earn 1 percent for the rest of the quarter.
Same Discover benefits
Discover is known for its generous consumer protection perks. Just like the ‘it’ card, the chrome card offers:
Which version is better?
The best option for you depends on your spending patterns. Start by reviewing the 5 percent categories for the Discover it card. These are subject to change each year, but, they generally follow the same template. Here are the 2014 categories to use as a reference (in the past, the “Holiday Shopping” category has included certain department stores and retailer websites):
As you might notice, there’s some overlap between the ‘it’ card’s 5 percent bonus categories and the chrome card’s 2 percent categories: gas and restaurants. That means these cards might work best as a team. In fact, you don’t necessarily have to choose between them, according to Discover’s media relations department — you can apply for each card separately, and, assuming you qualify, you can have both. If you do, you can switch your spending over to the chrome as soon as you max out the 5 percent cash-back earnings for gas and dining on the regular ‘it.’ As some of our forum users have pointed out, however, there are some complexities in having multiple Discover cards.
Assuming you don’t want two Discover cards, you’ll need to do some math. Your results will vary, but, generally speaking, low spenders who don’t make use of the other categories may come out ahead with the chrome card. But many people (especially those who can make even a little use of the quarterly categories) will come out ahead with the regular ‘it’ card.
Here’s how the numbers might work out:
Scenario No. 1
… let’s assume you spend:
In this scenario, you’re not taking advantage of the ‘it’ card’s quarterly categories and spending so little that you don’t hit the spending ceiling for either card:
|It Vs. It Chrome: Scenario No. 1|
|Quarter||It card cash back||It chrome card cash back|
|Q1 (5% on restaurants and movies on 'it' card)||$38||$20|
|Q2 (5% on home improvement on 'it' card)||$10||$20|
|Q3 (5% at gas stations on 'it' card)||$22||$20|
|Q4 (5% on holiday shopping on 'it') card||$10||$20|
|WINNER: It's a draw|
Scenario No. 2
… now let’s assume you spend quite a bit more due to a long commute and lots of dining out — and that you make use of the 5 percent categories.
In this scenario, you’ll be surpassing the $1,000 quarterly spending limit that the chrome card imposes on bonus spending.
|It Vs. It Chrome Scenario No. 2|
|Quarter||It card cash back||It chrome card cash back|
|Q1 (5% on restaurants and movies on 'it' card)||$81||$31|
|Q2 (5% on home improvement on 'it' card)||$71||$41|
|Q3 (5% at gas stations on 'it' card)||$75||$37|
|Q4 (5% on holiday shopping on 'it') card||$31||$22|
|WINNER: 'IT' CARD (by $127 a year)|
As you can see, if you can make even a little effort to use the categories, the original ‘it’ can help you come out way ahead. However, the chrome might still appeal to those who don’t want to worry about maximizing categories and signing up for a new one each quarter.
Again, your results will deviate from the above scenarios. Few people spend the exact same amount of money each month, and your rewards will fluctuate, depending on how well your spending lines up with the ‘it’ card’s rotating categories. If you happen to take a road trip in the fall instead of the summer, for example, having the chrome card, which gives you a little extra on gas every quarter, might be advantageous.
How does it fit into your reward strategy?
There’s still one more thing to consider: How the chrome card would fit into your overall reward strategy. If you prefer cards that get you steady cash-back rate year round instead of rotating categories, you’ll want to consider filling the rewards “holes” the chrome card leaves in the grocery and travel categories. Assuming you’re trying to avoid annual fees, the Blue Cash Everyday card from American Express (a CreditCardForum advertising partner) gives 3 percent back at U.S. supermarkets (on up to the first $6k in spending per year, then 1 percent), while the Barclaycard Arrival World MasterCard gives 2 percent back on travel.