Discover it vs. Chase Freedom

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Cash back rewards cards are a great thing, but sometimes their rewards don’t go much higher than 1% or 2%. Enter the Discover it and Chase Freedom cards, two robust cash back rewards cards that give you a whopping 5% cash back on certain categories of purchases.

What sets them apart from the pack is not only this 5% cash back tier, but that both cards rely on rotating spending categories for that extra rewards. What this means is that, every quarter, the Discover it and Chase Freedom cards feature a different spending category where you can earn 5% cash back on select purchases.

 Made by two different companies, the Discover it and Chase Freedom cards are pretty neck-and-neck for some of the best cash back rewards cards out there. Let’s take a deeper look at them to see which one, if any, wins out over the other.

Overview of the Discover It Credit Card

Discover it

On Discover's home portal

700-750
Best for good credit

Highlight: $0 annual fees and 0% introductory APR
  • 1.5% cash back on all purchases (no limits)

  • 5% cash back on rotating spending categories

  • Matches cash back rewards gained in first year

  • No expiration on cash back rewards

Intro APR

None

Variable APR

None

Annual Fee

$195

Main Reward

Travel

Why it's good

The Discover it card offers 1% unlimited cash back on every purchase, with a rotating set of bonus categories worth 5% cash back during qualifying quarters. Not only that, Discover matches your first year’s accumulated cash back rewards, effectively doubling your first year’s reward earnings.

 Not only that, your cash back rewards don’t expire, there’s no annual fee, and you get a 14 month period of 0% interest. Combining all of that, the Discover it features a hefty set of perks that should turn the gaze of even the most discerning rewards cardholder.

Overview of Chase Freedom Credit Card

Chase Freedom

On Chase's home portal

700-750
Best for good credit

Highlight: Generous points and travel perks
  • $150 signup bonus (with spending requirements)

  • 5% cash back (rotating quarterly categories)

  • 1% cash back (all other purchases, no limits)

  • Price protection

  • Liability protection

  • Extended warranties on select purchases

Intro APR

None

Variable APR

None

Annual Fee

$195

Main Reward

Travel

Why It’s Good

The Chase Freedom card also benefits from the 1% unlimited/5% bonus category perk, making it a more profitable rewards card than most others (provided you do the homework and keep up with each category.) While its signup bonus isn’t huge ($150), it’s easier to obtain than a lot of other lump-sum bonuses.

Also, the Chase Freedom card sports no annual fee and no interest for 15 months, making it another low-maintenance card for people who are more willing to keep balances on their account.

Differences Between the Discover it vs Chase Freedom

As previously stated, the main gimmicks behind the Discover it and Chase Freedom cards are pretty similar – both bolster a modest 1% unlimited cash back rate with select categories of 5% rewards each quarter.

However, there are a few modest differences that might influence your decision to get one or the other. Their signup bonuses and foreign transaction fees are widely different, and the Chase Freedom card is helped most by the existence of other Chase cards in your repertoire.

Fees

The Discover it sports no annual fee, and no interest for 14 months when you first get the card. After that, you have a variable APR of 13.29%-24.49% to work with – that’s on the lower end of the spectrum compared to other cards of its type.

When it comes to overseas spending, Discover it helps you out with no foreign transaction fees. That’s a good perk, especially if you travel a lot. 

Just like the Discover it, the Chase Freedom asks for no annual fee for the life of the card, but its 0% introductory APR period is one month longer at 15 months. After that, however, your variable APR goes up between 16.24% and 24.99%, which is a little bit higher than the Discover it. If you have excellent credit, there’s a better chance you’ll get Discover’s lower APR.

The Chase Freedom does ask for a 3% foreign transaction fee, however, which makes travel spending just a bit more pricey.

Rewards

Discover it has a 5% cash back rewards program, just like the Chase Freedom – every quarter, Discover declares a different bonus category to qualify for 5% cash back when you make purchases in said category. This can be anything from gas stations, utilities, mobile wallet payments, or more.

The only caveat is that you can only earn those 5% rewards for up to $1,500 of spending in these categories every quarter. From there, it drops to the baseline rate of 1% cash back, which is what you get for every other purchase on the card. 

Just like the Discover it card, the Chase Freedom mixes a 1% unlimited cash back baseline with rotating 5% cash back categories every quarter. You also get a $1,500 cap each quarter on your spending in those categories, offering a similar restriction on the amount of rewards you can get back.

However, if you have other Chase rewards cards that earn points, you can combine your cash back with other Ultimate Rewards points through their rewards program of the same name. Just pool your rewards and use them on other cards to get more value (e.g. use cash back you earned on the Freedom Card to get 25% more value on travel with the Sapphire Preferred).

Sign up Bonus

The Discover it’s signup bonus is pretty unique among rewards cards, but par for the course with Discover – at the end of your first year of membership, Discover matches all the cash back rewards you accumulated. That’s a beautiful way to double your rewards when you first start the card; along with no interest, it’s a nifty incentive to spend, spend, spend when you first get it. 

The Chase Freedom’s signup bonus is more along the lines of most traditional welcome bonuses: you get an upfront bonus of $150 in cash back rewards, provided you spend $500 in the first three months of owning the card. While it’s not as great a bonus as some other cards out there, it’s more than likely you’ll actually spend enough money to earn it.

Drawbacks

While the Discover it is a fantastic card, its main drawback lies in the restrictiveness of the rewards program itself. Earning 5% on purchases is a great perk, but it can be difficult to keep up with the changing, shifting rewards categories. In order to get the most out of this card, you have to do your homework, which can be a hassle for people who just want some hands-off rewards. 

The Chase Freedom has the same problem as the Discover it, in that the rotating categories for your 5% cash back rewards can be rough to navigate if you’re not paying attention.

However, one other drawback the Freedom has over the otherwise virtually-identical Discover it is its 3% foreign transaction fee; if you plan on using this card when traveling to other countries, keep in mind you’ll get charged that much more. The Discover it has no such fee, making it the better option for travel.

Who should get these cards?

The Discover it card, like the Chase Freedom card, is a great option for rewards-minded cardholders who don’t mind putting in the effort to keep track of bonus categories and strategically using cards to take advantage of them.

The Discover it, however, is especially good for people who want to travel, due to the lack of a foreign transaction fee. Also, that cash back matching feature in the first year of card membership is a huge incentive for new cardholders to rack up rewards, even if it doesn’t give them their signup bonus money up front like the Chase Freedom. 

The Chase Freedom card has a similar appeal to the Discover it: get the card if you want 5% cash back rewards on certain things, and don’t mind keeping an eye out for when your preferred categories are in season.

Cardholders who already have other Chase cards should really look into this one, though, since it synergizes well with the Chase Ultimate Rewards program. It’s incredibly easy to use this card to earn more rewards on their targeted categories, then use the Sapphire Preferred or some other card to use all your accumulated points towards the things you want.

Which card should you get?

The winner: Discover it

This was a tough call – both cards are basically the same in terms of rewards and fees, making for two multifaceted rewards cards that rewards-minded cardholders would be lucky to have. The combination of unlimited 1% cash back rewards and 5% cash back in rotating categories is something that more attentive cardholders can really make bank on.

However, a few factors influenced our decision. First and foremost, the signup bonus for the Discover it just has that much more earning potential than the Chase Freedom. While it’s nice to get $150 up front right when you get the card, if you work hard you can earn that much and more with Discover’s cash back matching feature. Just wait a year for your bonus, and it’ll pay off.

If nothing else, one huge incentive for those with excellent credit to get the Discover it card is its lower variable APR range. If you plan on carrying a balance at any time with the card, you’ll be glad you have something as low as 13%, as compared to the 16% offered by the Chase Freedom.

There are still quite a few advantages in Chase’s corner, to be fair – the Chase Ultimate Rewards program means that, even if you have one other Chase card or product that earns rewards, that might be enough to justify getting the Freedom over the Discover it.

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