Discover it Miles Review: Is It the Right Travel Rewards Credit Card for You?
The Discover it Miles is a travel rewards card that gives you a significant first-year bonus as well as two different rewards rates that can earn up to $450 a year to put toward travel purchases.
What makes the card unique is that its sign-up bonus isn’t a lump sum of miles or points like other cards offer. Instead, it matches your rewards the first year and gives you that match when the first year is over.
The Discover it Miles has several good qualities but those qualities may or may not be better than what other travel cards offer.
To find that out, our review does an in-depth analysis of how the card’s rewards work, what its rates and fees are and how it compares to other travel cards.
This card’s rewards system generates “miles,” which are worth one cent per point. In reality, the term “miles” is misleading because you can’t use them for a frequent flyer program. Rather, you apply the cash value of the miles you earn to travel purchases.
There are two main ways to amass miles with this card. First, Discover will give you 1.5 miles for every cent you spend on your Discover card. If you make a $100 purchase, you’ll earn 150 miles.
Discover automatically calculates how many miles each purchase gets, then sends those miles to your rewards balance at the end of each billing cycle (every month roughly). You can view this balance when you log into your Discover account.
Discover lets you redeem these miles for travel purchases that appear on your credit card statement within the past 180 days. For comparison, the Capital One Venture Rewards card limits your miles redemptions to travel purchases in the past 90 days.
As for what qualifies as a travel purchase, here’s a list of some of the things Discover considers “travel”:
- Commercial airline tickets
- Hotel rooms
- Car rentals
- Tour operators and vacation packages
- Commuter Transporation (ferries, trains, subway, taxis, limos, etc.)
- Charter buses and tour buses
Important exceptions include travel purchases made with your Discover it Miles via PayPal, tap-and-pay terminals, mobile payment readers ad virtual wallets.
The second main way to earn rewards is through the first-year rewards match we mentioned in the introduction of this review.
Someone who spends $30,000 a year on the credit card can earn $450 in rewards their first year. Since Discover matches that amount, your first-year rewards total is $900. According to the fine print, it will take discover up to two billing cycles to deposit the rewards match to your account.
Pro tip: Discover allows you to transfer the cash value of your miles to a bank account, too. We’ll mention this again later in this review.
In the next section, we’ll talk about how the Discover it Miles’ rewards compare to other cards. But, for now, we believe it’s important to explain to you how much the card’s rates and fees can cost you if you carry a balance or pay late.
As you’ll find out soon, carrying a balance can cost you more in interest payments than what you earn in rewards. Here’s a quick list of those rates and fees:
- Interest rate for purchases and balance transfers: 14.24% to 25.24%
- Interest rate for cash advances: 27.24%
- Penalty interest rate: None
- Balance transfer fee: 3% for three months, 5% after
- Cash advance fee: $10 or 5%, whichever is greater
- Foreign transaction fee: None
- Late payment fee: $0 first time, up to $39 after
- Returned payment fee: Up to $39
- Annual fee: $0
Contrary to other travel cards, this Discover card has no annual fee. Furthermore, it has the lowest APR of any major travel card we’ve reviewed. Another bonus in the rates and fees department is that your first late fee is free.
Simply put, the Discover it Miles is the best among the popular travel cards when it comes to rates and fees. However, that doesn’t mean that the card won’t cost you hundreds of dollars of interest per year if you carry a balance.
The following chart shows you how much the card’s interest rates can cost you per year based on five different average daily balances. The middle APR isn’t something Discover provides, but rather is our estimation of what their middle APR could be:
|Daily Balance||14.24% APR for one year||20.24% APR for one year||25.24% APR for one year|
As you can see, even though the Discover it Miles has a great 14.24% APR, it can still cost you hundreds of dollars per year in interest payments if you carry a balance. In fact, even with the best APR the card has to offer, your interest payments will exceed your yearly rewards once your balance hits $3,250 a day for a year.
Also, remember that Discover and other credit card companies tend to give their lowest APR’s to those with the best credit scores (720 and above). If your score is in the mid- to high-600’s, you may get a rate above 20%.
As we mentioned earlier, there are several popular travel credit cards that make their own case for why they’re the best option for you.
The following chart gives you a seven-category comparison of the six most popular travel cards in addition to the Miles:
|Discover it Miles||Capital One Venture Rewards||Chase Sapphire Preferred||U.S. Bank FlexpPerks Travel Rewards Visa Signature Card||Barclaycard Arrival Plus World Elite MasterCard||Citi Premier Card||Bank of America Travel Rewards Card|
|Intro offer||45,000 miles||50,000 miles||60,000 points||25,000 points||70,000 points||50,000 points||25,000 points|
|Rewards rates||1.5x on all purchases||2x on all purchases||2x on travel and dining, 1x on everything else||2x on cell phones, charitable donations and airlines, gas or groceries||2x on all purchase plus a 5% bonus on redeemed points||3x on travel and gas, 2x on restaurants and entertainment, 1x on everything else||1.5x on all purchases|
|Yearly miles/ points on $30K spending||45,000 miles||60,000 miles||34,865 points||40,531 points||63,000 points||44,498 points||45,000 points|
|Travel portal booking bonus||None||None||1.25x||1.5x||None||1.25x||None|
|Number of transfer partners||None||15 (14 int’l airlines, 1 domestic airline)||9 (6 int’l airlines, 3 domestic airlines, 3 hotels)||None||None||15 (14 int’l airlines, 1 domestic airline)||None|
|APR||14.24% to 25.24%||17.99%, 22.74% or 25.24%||18.24% to 25.24%||16.24% to 26.24%||18.24%, 22.24% or 25.24%||16.74% to 25.74% (29.99% penalty APR)||17.24% to 25.24% (29.99% penalty APR)|
|Annual fee||None||$0 first year, $95 after||$95||$0 first year, $49 after||$0 first year, $89 after||$0 first year, $95 after||None|
The Discover it Miles’ sign-up bonus is better than the U.S. Bank FlexpPerks Travel Rewards Visa Signature Card and the Bank of America Travel Rewards Card but it lags behind the four other cards in the group.
As far as yearly rewards go, the card fares better but it still can’t top the more than $600 worth of miles/points you can earn with the Capital One Venture Rewards and Barclaycard Arrival Plus World Elite Mastercard.
As you move through the chart, it becomes apparent that the Discover it Miles is missing two key elements that the other cards have: redemption bonuses and transfer partners.
When you book travel through the U.S. Bank travel site, the points you earn with your U.S. Bank FlexPerks Travel Rewards Visa receive a 1.5x boost. So, booking with 20,000 points is actually worth $300 in travel.
The Chase Sapphire Preferred provides a redemption boost, too. However, it also gives you the option to transfer your points to more than a dozen travel partners, including loyalty programs from United, Southwest, JetBlue, Hyatt, Marriott, and IHG.
The Citi Premier Card card is another example of a card that provides travel partners (15) and a rewards boosts (1.25x).
As we mentioned in the previous section, the Discover it Miles card is the clear winner when it comes to APR and annual fee, especially for those with great credit scores who can get the 14.24% interest rate.
In our opinion, this chart reveals that the Discover it Miles lags behind the top cards when it comes to yearly rewards totals and redemption bonuses and options.
In our opinion, this card’s strengths lie in its 14.24% interest rate and the absence of an annual fee. The card’s free first late fee is a great perk, too.
However, in our opinion, there are better travel cards out there. We say this because the Discover it Miles card’s rewards value can be transferred to a bank account in addition to applying your rewards balance to a travel purchase.
Basically, the card is a cash rewards card marketed as a travel card. The only difference between this card and the Discover it Cash Back, for example, is that the Discover it Miles card gives you a flat 1.5% rewards rate as opposed to a 1% rewards rate with 5% quarterly bonus categories.
There aren’t any travel-specific perks and using your rewards to cancel out travel purchases offers no measurable benefit over sending your rewards balance to a bank account.
The Capital One Venture card is similar to the Discover it Miles card in that you can transfer points to a bank account. However, that card offers better yearly rewards and it reimburses you for Global Entry or TSA PreCheck application fees, which are excellent programs for those who often travel by air.
In our opinion, the Discover it Miles is best for someone who wants a rewards card that gives them a great first-year bonus and slightly above average yearly cash rewards.
If you’re someone who is serious about finding a powerful travel rewards card, this card may not be the best fit, as its strengths lie in fees and rates, not travel bonuses and transfer partners.