[Application link: 3 points per dollar spent in first 12 months]
When I mention Discover it Miles, I am often met with eye rolls or laughs. Unless, of course, you own a Discover product – then you mention the best-in-class customer service and excellent rewards.
I fall into the latter category, even prior to the new Discover it Miles card that is making some serious noise in the reward space. Here are the details:
- 3 miles per $1 spent in first year
- $0 annual fee (!!!)
- 1.5 miles per $1 spent in subsequent years
- $30 annual airline WiFi statement credit (any provider)
- Free FICO credit score reporting
- No foreign transaction fees
- Discover service: 100% U.S. phone reps, auto waive of first late payment fee, no penalty interest rates
- Approval difficulty: Easy (650+ credit score with good income)
- Churn status: Bad (No reports of multiple ownership of the same product)
The positives of this deal are largely threefold.
- First, three miles per dollar spent – at one cent per mile – is an incredible 3% return in the first 12 months. This is what’s causing headlines.
- Second, with a zero dollar annual fee the aforementioned 3% – along with the $30 WiFi credit, free FICO tracking and no foreign transaction fees – looks even more appealing.
- The third reason is the most compelling though: Discover’s service. Never paying penalty interest rates is a huge deal for anyone struggling with debt and the automatic waive of the first late payment fee is an added touch. 100% U.S. based phone representatives usually means a better experience on the phone as well.
Discover’s Achilles heel is the fact that, at the time of writing, acceptance is still below the global standards set by Visa and MasterCard. My main gripe with American Express – structured similarly to Discover as both a bank and payments network – is that you always have to have a backup card. Discover is no different.
It is worth noting that Discover has been getting creative in this department, most notably inking a deal with China Union Pay. This may come as a surprise, but China Union Pay actually has more cards in circulation than the largest U.S. payment network, Visa.
This means Discover cards are accepted everywhere China Union Pay – along with JCB and Diner’s Club – is. With 90% U.S. coverage and relationships like the above, this “negative” may not last long.
Read more about Discover’s coverage by visiting their website.
The Final Word
Discover reminds me of a grandfather telling me how things were in the old days: companies did things right. While I doubt this is what Discover is going for – or even if this anonymous grandfather is actually right – what I mean to say is that Discover is a very real player in the credit card space, and one that should be taken seriously.
My take: airline miles redeemed for first and business class flights still offer the highest return. But almost everyone should have a credit card that offers 3% back – that is unheard of.
Add in the Discover service, WiFi credit and FICO tracking and I recommend applying if you have a round of applications coming up. Application links and other useful information is below:
Disclaimer: Photos credit to Discover.