I often get emails about which no annual fee rewards card is better between the Discover it or Chase Freedom. So here’s a comparison post breaking down the differences between these two rewards cards.
Best Sign Up Bonus
The Chase Freedom® currently has a sign-up bonus of $150 after spending $500 in 3 months. You can get an additional $25 if you add an authorized user and they make a purchase in the same time period.
It’s worth noting that if you have the Chase Sapphire Preferred® Card or Ink Plus card, you can transfer/combine your Freedom points with them so that you can transfer your Ultimate Rewards points out to a travel partner.
The best Discover it offer I could find comes with a bonus of a $100 Amazon credit after your first purchase made in 3 months. Almost as good as cash.
Winner: Chase Freedom
5% Rotating Categories
Both the Chase Freedom and Discover it cards have rotating 5% quarterly categories. Some people don’t like rotating categories and would rather earn a fixed amount, like 2 points on every $1 they spend. I happen to like the quarterly 5% categories and try to max out the $1,500 limit each quarter.
Maxing out the Freedom’s 5x categories gives me an additional 30,000 points or $300 a year. The 5% categories for the Freedom in 2015 are:
- Q1 (Jan – March): Grocery stores, movie theaters, and Starbucks
- Q2 (April – June): Restaurants
- Q3 (July – Sept): Gas stations
- Q4 (Oct – Dec): Amazon
A good way to help you meet the quarterly $1,500 limit is to buy gift cards at grocery stores, restaurants, gas stations, etc., for future use.
Maxing out the Discover it 5% cash back categories would give you $300 a year. That’s cash money. The 2015 Discover it cash back categories are:
- Q1 (Jan – March): Gas and transportation
- Q2 (April – June): Food & fun
- Q3 (July – Sept): Summer spruce & more
- Q4 (Oct – Dec): Holiday shopping & more
You can see more details & activate your Discover it card here for its 5% categories.
Another option both cards have to earn additional points is a shopping portal. Shopping portals allow you to earn multiple points on top of any category bonus for online shopping, just by clicking through a link. Brilliant.
For example, by going through the Discover Deals shopping portal, you can get 5% cash back at the Apple store. Easy.
And if you’re looking to make a NorthFace purchase (because it’s freakin cold), then look through Chase Freedom’s Shop Chase portal and earn 9x per $1.
It’s important to always do a price comparison when looking to buy something through a shopping portal to make sure you’re getting the best deal.
If you hold the Chase Freedom & Discover it cards, you can a little something for referring your friends and family.
You and the referee will each receive $50 with the Discover it card. The Freedom will also usually reward you with a $50 bonus for referring others, but Chase hasn’t released the bonus in 2015 yet.
The Chase Freedom has no annual fee, so you can keep it forever with no worries. It also has a 0% intro APR for 15 months on purchases and balance transfers. The variable APR is 16.49% – 25.24% after the intro period. The balance transfer fee is 5% of the amount transferred with a minimum of $5.
The Discover it is also a no annual fee card. Yay. It has a 0% intro APR for 6 months on purchases and 0% Intro APR for 18 months on balance transfers. After the intro period, the 10.99% – 22.99% Standard Variable Purchase APR applies and 3% fee for each balance transfer.
The Discover it also comes with a free monthly FICO score.
It’s best to pay your bills in full at the end of every cycle, but the Freedom has a better intro APR on purchases, and the Discover it for balance transfers. However, I like that the Discover it gives you a free look at your credit score each month.
Winner: Discover it
Best Points System
As I mentioned before, the Chase Freedom points can be combined/transferred to the Chase Sapphire Preferred or Ink Plus, so you can maximize the Ultimate Rewards travel transfer partners. If you don’t have the Sapphire Preferred or Ink Plus, you can still use your Freedom points to book travel through their portal, but you will only get a fixed value for your points. For example, you can fly from Austin to JFK on Delta one-way for $130.60 or 13,060 points.
Of course, you can use your Freedom points for cash back as well. 10,000 Freedom points equals $100 cash money. You can also redeem your Freedom points for gift cards and at Amazon at the same ratio.
The Discover it is a more traditional cash back card. You earn cash back at the same ratio as the Freedom card, and you can also use your points for gift cards and purchases at Amazon.
I like the flexibility you have with the Freedom to redeem for travel as well as cash.
I love that both the Freedom and Discover it cards are no annual fee cards, have 5% earning categories, intro APR on purchases and balances transfers, and have excellent shopping portals. Because I like to travel (obviously), the Freedom is the superior card for me, but I have both of them because I like to diversify and maximize both cards’ 5% categories and shopping portals.
Hope this helps if you are trying to decide whether to apply for the Discover it or Chase Freedom. Questions? Feel free to email me at geoff @ noobtraveler.com or comment below!
Apply Now: Chase Freedom®
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Editorial Note: The editorial content on this page is not provided by any bank, credit card issuer, airlines or hotel chain, and has not been reviewed, approved or otherwise endorsed by any of these entities.