Recently readers have been asking me which card offers the best cash back rewards, Discover it® Cashback Match™ with No annual fee or Chase Freedom®. Since I carry both and have used their cash rewards, it seemed like a great question to address.
At first glance, it would seem that the two cards are about equal. For example, both offer cash rewards of up to 5%. Like so much in life, however, things aren’t always as simple as they first appear. So before we evaluate these two cards, let’s make sure we get the facts straight:
|Discover it® Cashback Match™ with No annual fee||Chase Freedom®|
|Top Cash Back Reward||5% on select categories that change each quarter||5% on rotating categories|
|Cash Back on other purchases||1% on all purchases||1% on all purchases|
|Intro Offers||0% introductory APR on balance transfers and purchases for 12 months||0% introductory APR on balance transfers and purchases for 15 months|
|Cash Bonus||Double cash back the first year||$150|
For my money, the Chase Freedom® edges out Discover. Its 0% rate lasts for 15 months, not 12. And the $150 cash bonus when you spend at least $500 on the card in the first three months trumps double cash back. Of course, if you plan to spend a lot on the card, double cash back could prove a better deal. But you’d have to spend about $15,000 the first year just to break even.
5% Cash Back
The first consideration is to what extent you’ll take advantage of the top tier cash back offers. For the Discover it® Cashback Match™ with No annual fee, here are the 5% categories for 2016:
January – March
- Ground Transportation
April – June
July – September
- Home Improvement
October – December
- More to be determined
We go on vacation during the summer, so this past year we saved 5% on restaurants. The key is to determine to what extent you’ll take advantage of the 5% cash back categories.
With Chase Freedom®, the categories also change each quarter. For 2016, here is a listing of the categories by month:
Cash Back on Everyday Purchases
At one point, the Chase Freedom® had the edge here because the old Discover More Card didn’t pay out at 1% until you had spent $3,000. With the new Discover it® Cashback Match™ with No annual fee, however, it pays out 1% on all purchases. So on this feature, the cards are equivalent. I guess Discover got tired of those Chase commercials!
0% Intro Rates
If cash back is your only consideration, the 0% intro offers aren’t all that important. If you do care about this feature, then the Chase Freedom® wins by a nose (or three months to be precise).
The interest rates will depend on your credit and they can change from time to time. Currently the Chase Freedom® has slightly higher rates. Of course, this only matters if you plan to rollover a balance from month to month. Further, these rates only kick in once the 0% introductory APR expries.
I carry both both the Chase Freedom® and the Discover it® Cashback Match™ with No annual fee. Frankly, both cards are excellent, and which one works best for you will depend on your spending habits. If had to choose just one, however, I’d pick the Chase Freedom®. Of course, you could just get both cards.