The recently launched Discover it card is a new rewards credit card that has gained a lot of attention given its rather revolutionary features. The card has no annual fee, hidden costs or confusing rewards program and it has no penalty APR.

Discover it also comes with 14 months of 0% interest on both balance transfers and purchases, making it the ideal choice if you want to
transfer a balance or just earn rewards without hassles.


Of course, that's not all the Discover it has to offer. Here's exactly why you should consider putting this card in your wallet.

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How Does the Rewards Program Work?

You'll earn 5% cash back on categories that rotate each quarter, plus an unlimited 1% cash back on everything else. For example, for January through March of 2013, you'll earn 5% back on restaurant and movie purchases. Other cash back bonus categories for the year include home improvement, summer fun and holiday shopping.



Note: The rotating categories usually include common purchases like gas and travel as well, although you do need to sign up for each program either online or over the phone. If you exceed the specified limit for each program (usually $1,500), you'll automatically earn the usual 1% back on everything else.

Your cash back can be redeemed for a statement credit or direct deposit to your bank account in $50 increments, or gift cards and merchandise. You can also shop directly on Amazon with your cash back once you link your card with a straight $1 to $1 rate. In most cases, you'll get the best rewards redemption by just redeeming for cash or going through Amazon, although they usually have gift cards available that give you a much better conversion. Sometimes you'll find $25 gift cards for $20 in cash back rewards, or even a $40 gift for only $20.


Introductory Promotion -- 0% APR for 14 Months

The Discover it's current introductory promotion is a 0% APR for 14 months on balance transfers and purchases, after which it'll be 10.99%-19.99%. The standard APR is somewhat high, although it's comparable to the Citi Simplicity, which shares its straightforward approach to credit. With a relatively low balance transfer fee of 3%, this card is a really good option if you're thinking about transferring a balance to finally pay off credit card debt or you want to finance a large purchase.

Very Few Fees

The Discover it card has no annual fee and you won't pay any other hidden costs, either. There is no pay-by-phone fee, foreign exchange fee, overlimit fee or penalty APR. The late fee for your first missed payment is also waived. This is a huge advantage if you plan to use the card overseas or you occasionally miss a payment.

With virtually all credit cards, a late payment will automatically trigger a penalty APR, which may expire after 6-12 months of on-time payments or remain indefinitely. The Discover it and the Citi Simplicity are two of the only cards with this great benefit.

Excellent Customer Service

The Discover it card comes with US-based customer service available 24/7. You don't need to worry about calling at certain times or speaking to someone who doesn't speak English as a first language. Your call will even be answered in seconds with very little wait and no time wasted navigating through a menu.

Flexible Payment Options

Discover allows you to choose your own due date each month and you can pay by midnight on your due date either online or over the phone. While this may not sound like such a big deal, many cardholders attempt to pay their bill on the due date only to find out it's past the cut-off time because of time zone differences with a strict 3:00 pm EST deadline. The flexibility is definitely a great feature.

As an added bonus, they will lower your rate or payment if you lose your job.

How Does it Compare?

The Discover it card is most similar to the Citi Simplicity, which is also designed as a straightforward credit card. Both have no annual fee, no late fee for your first missed payment, no penalty APR and no overlimit fee. Both also have higher-than-average APRs. The main difference, however, is the rewards program with the Discover it card and the US-based customer service, as well as the ability to pay your bill by midnight.

The Chase Freedom card is also fairly similar with 5% cash back categories and no annual fee. Still, the Chase Freedom doesn't include a fee waiver for your first late payment and a penalty APR will apply. This card also has a foreign transaction fee, overlimit fee and no real flexibility in terms of payments.

The new Discover it card also wins when you compare it to the Discover More. Both have the same exact rewards program and APR with no annual fee but only the Discover it card has no penalty APR and the ability to pay by midnight on your due date.

The Bottom Line...

The Discover it card is really an innovative credit card with a straightforward solution for consumers to avoid unnecessary fees and penalties while earning up to 5% cash back. While the APR is higher than average, you can avoid interest charges by paying your bill in full each month and use the promo 0% APR to transfer a balance or finance a big purchase. The Discover it is a great card for earning rewards or just to have on hand in case of emergency.

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