About Discover it Business Card
The Discover it Business launched in Sept. 2018 and is the company’s only business credit card, providing a 1.5% cash back rate and a first-year match on the rewards you earn.
Discover has long been known for its simple cash rewards cards and excellent customer service, two things that can relieve a lot of unnecessary headaches that business owners – or individuals – don't want to deal with.
The emphasis on a positive client experience and easy-to-understand rewards are two valuable features of the card, but they’re certainly not unique. Other business credit cards offer the same perks, making choosing the right card a tough decision.
In our review, we’re going to examining the Discover it Business card’s rewards, the benefits you get with it and the rates and fees you can expect while using it.
Once we show you why the card may or may not be good for you, we’re going to compare it to other business cards so you can get a sense of how the Discover’s rewards and rates match up against other cards you can get.
At the end of our review, we’ll give you a list of the main pros and cons of using the card.
A Quick Word About What You Need to Apply
According to Discover’s fine print, they will, per federal law, require you to provide, at the very least, your taxpayer ID number and your business’ address.
These requirements will typically mean that you’ll have to provide official documentation you’ve received for local, state and federal organizations with whom you registered your business.
The Discover it Business Card’s Rewards
As we mentioned in our introduction, the Discover it Business has two ways to earn rewards: everyday spending and a first-year bonus.
Whenever you use your card for daily purchases, you’re going to earn 1.5% in cash back. The rewards rate doesn’t apply to fee-based payments like late fees, interest payments and returned payment fees. Also, you won’t earn rewards on any balance transfers you make.
So, if you use your card to pay for $1,000 worth of office chairs, then you’ll earn $15 in cash rewards. Discover adds those rewards to your rewards balance, which you can view when you log into your Discover account.
Discover's fine print points out that you have four different options for redeeming your cash back:
- As a statement credit
- As cash deposited to a bank account
- For gift cards through Discover’s shopping portal
- For donations to charity
Now, what makes Discover cards unique from other credit cards is that they all come with a first-year match. This means that Discover adds up all the rewards you earned the first 12 months of owning the card and then adds a matching deposit to your rewards balance.
So, let’s say you spend $30,000 your first year using the card. The 1.5% rewards rate will earn you $450 in rewards but, because you get the first-year match, you’ll actually earn $900 in rewards because Discover will add to your rewards balance the matching $450 after the first year is over.
The comparison section later in this review will help you see how this card’s rewards compare to what you can get with the Chase Ink Business Unlimited, the Capital One Spark Cash for Business, the American Express SimplyCash Plus and the Wells Fargo Business Platinum.
The Discover it Business Card’s Business Benefits
The two main non-rewards perks you get with the card are that you can download your transactions into Quicken, QuickBooks and Excel, their site says, and you also get free employee credit cards you can distribute to your team.
Any spending they do falls under your account, as do the rewards they earn with their employee cards. The other feature you get with this card is that Discover will notify you if your social security number is used to create a new account or if it appears on “thousands of risky websites known for revealing personal information.”
This is a unique feature of being a Discover customer, whether you have a personal or business card.
The Discover it Business Card’s Rates and Fees
When you’re making a decision about which credit card is the best fit for your business, it’s important to consider how much the card cost you in addition to the rewards totals it can generate for you.
We’ll list this card’s rates and fees and then talk about them afterward:
- APR for purchases and balance transfers: 14.74% - 22.74%
- APR for cash advances: 26.74%
- Penalty APR: None
- Balance transfer/cash advance fee: 5%
- Late payment fee: None the 1st time, $37 after
- Returned payment fee: $37·
Discover will determine your APR based on your personal and/or business credit history.
Remember, the higher your scores, the better your APR will be. A general rule of thumb is that that scores above 720 will have a high likelihood of getting the best APR.
But let’s say your credit scores are low. Maybe you’ve gotten into debt trying to launch your business and paid a few bills more than 30 days late. There’s a good chance you won’t get the best APR; you might get 22.74% instead of 14.74%.
If you carry $4,000 in debt every day for a year, a 24.74% APR will cost you $909.60 in interest payments. If your APR was 14.74%, your interest payments on that balance would be $589.60 – that’s a difference of more than $300.
There are two you can avoid any APR, high or low. The Discover it Business will give you 0% interest on purchases and balance transfers for 12 months. So, if you make $3,000 in purchases the first month you have the card, you won’t be charged interest for 12 months.
Once the 12 months is over, your regular APR will kick in and apply to any remaining balance you have.
Discover it Business Card vs. Popular Business Credit Cards
When you’re trying to decide which business credit card is best for your company, it’s important to know where a card like the Discover it Business fits in the context of other business cards.
In the following chart, we compare the Discover card to three other cards via the categories we believe are most important to your satisfaction. The rewards data is based on $30,000 of yearly spending and the customer service rating is based on J.D. Power’s five-star rating system:
|Discover it Business||Chase Ink Business Unlimited||Wells Fargo Business Platinum||American Express SimplyCash Plus|
|0% Intro APR||12 months||12 months||9 months||9 months|
|APR||14.74% - 24.74%||14.99% - 20.99%||12.99% - 22.99%||13.99% - 20.99%|
|Customer Service||5 stars||3 stars||3 stars||5 stars|
The Discover it Business has an identical cash rewards rate as the Chase and Wells Fargo card, so the yearly rewards total is the same. The AmEx card does tiered rewards depending on which types of purchases you make. While the bigger bonuses – 5% and 3%, in this case – sound great, in the end, cards with a single rate tend to earn you more money each year.
The Discover card’s sign-up bonus isn’t quite as lucrative as the Chase and Wells Fargo cards. Another drawback is that the other two cards will deposit your sign-up bonus within three months after you spend $3,000 (Chase) or $5,000 (Wells Fargo). The Discover card, on the other hand, gives you your bonus after you’ve had the card for a year.
The Discover and Chase cards are the best for the intro-APR length. However, when it comes to the regular APR you get, the Discover’s best APR (14.74%) is nearly 2% higher than the Wells Fargo card and 0.75% behind the AmEx card. The card’s high APR higher than the other three cards, meaning it may not be the best choice if your credit scores are below 650.
In the final category, the Discover and American Express cards are the only two that get five-circle ratings from J.D. Power, which, their site says, means the two companies’ customer service is “among the best.”
Furthermore, J.D. power ranks Discover’s customer service higher than any other credit card company who doesn’t have restricted membership (USAA, a military-only bank, has a higher rating).
Pros and Cons of the Discover it Business
Based on our research, we believe that the strengths of the Discover it card are its yearly rewards, first-year rewards and its excellent customer service. The 1.5% rewards rate makes it easy to keep track of your rewards, as opposed to cards like the SimplyCash and other business cards that require you to choose which types of purchases get the extra bonus.
Also, we like that the Discover’s sign-up bonus is a match. This means businesses who spend more money get a bigger sign=up bonus, whereas Chase and Wells Fargo offer a set bonus. So, if your company spends $50,000 a year, then your first-year rewards would be $1,500, or $250 more than the Chase Ink Business Unlimited and the Wells Fargo Business Platinum.
The downside to the card is that its best and worst APR’s are higher than competing business cards. Also, the card’s sign-up bonus isn’t lucrative if you don’t anticipate spending at least $30,000 a year.
If you want to learn more about other options out there beyond what we compared in this article, then read our rankings of the best business credit cards of 2018. We rank seven different cards based on eight different categories.