Recently readers have been asking me which card offers the best cash back rewards, Discover More or Chase Freedom Visa – $100 Bonus Cash Back. 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 More | Chase Freedom Visa – $100 Bonus Cash Back | |
|---|---|---|
| Top Cash Back Reward | 5% on select categories that change each quarter | 5% on rotating categories |
| Cash Back on other purchases | .25% on the first $3,000, 1% thereafter | 1% on all purchases |
| Intro Offers | 0% balance transfer for 15 months and purchases for 15 months | 0% intro for 15 months on purchases and balance transfers |
| Cash Bonus | None | $100 |
| Annual Fee | $0 | $0 |
| Cash Back at select online retailers | Up to 20% | Up to 10% |
| Regular APR | 11.99% to 20.99% variable | 12.99% – 22.99% variable* |
| Official Website | Discover® More® Card | Chase Freedom® Visa |
As you can see from the above details, picking a cash back winner is not so simple. The best card will depend on how you will use the card. So let’s evaluate the key features, which should enable you to pick the best card based on your specific purchases.
5% Cash Back
The first consideration is to what extent you’ll take advantage of the top tier cash back offers. For the Discover More card, here are the 5% categories:
October – December
• Grocery Stores
• Movie Theaters
• Restaurants
• Movie Rentals
January – March
• Airlines
• Car Rentals
• Hotels
• Cruises
March
• Grocery Stores
• Drug Stores
April – June
• Home Improvement Stores
• Department Stores
• Clothing Stores
July – September
• Gas Stations
• Movie Theaters
• Hotels
• Movie Rentals
We go on vacation during the summer, so this past year we saved 5% on hotel costs. For us, just saving 5% on hotels each year makes the Discover More Card the best choice for us. The key is to determine to what extent you’ll take advantage of the 5% cash back categories. For those that spend a lot within these categories each year, the Discover More Card is difficult to beat.
With Chase Freedom Visa – $100 Bonus Cash Back, the categories are no so clear. Chase Freedom Visa – $100 Bonus Cash Back offers 5% cash back offers in popular categories like gas, home improvement and department stores. The problem is that these categories are not defined by quarter like the Discover More® card, so planning ahead is difficult. As result, Discover More takes top prize for its 5% offer.
Cash Back on Everyday Purchases
Here, the Chase Freedom Visa – $100 Bonus Cash Back takes the prize. While you can earn 1% on everyday purchases with the Discover More Card, the 1% only kicks in once you’ve spent $3,000 on the card each year. With the Chase Freedom Visa – $100 Bonus Cash Back, you earn 1% from your very first purchase.
How important this difference is to you depends in part on how much you use the card. If you only spend $3,000 a year on the card, the Chase Freedom Visa – $100 Bonus Cash Back’s 1% will be pretty important. On the other hand, if you charge $30,000 a year, the difference may not matter much.
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 it’s a toss up as both cards offer similar 0% introductory rates.
If getting a no interest card is important, you may want to check out our list of 0% APR credit cards and list of 0% balance transfer offers.
Up to 20% with Online Retailers
Both Discover and Chase have developed relationships with online retailers who offer cash discounts of up to 20%. As a result, this factor is basically a tie. It is worth noting that Discover’s website is extremely easy to use.
Interest Rates
The regular APR is less on the Discover More Card than the Chase Freedom® Visa – $100 Bonus Cash Back by one percentage point. If you plan to carry a balance from month to month, the Discover® More® Card is the better option. If you pay off your card in full every month, the difference in interest rates won’t matter.
Final Thoughts
I carry both the Discover More Card and the Chase Freedom Visa – $100 Bonus Cash Back to maximize cash back rewards. You can use the Discover Card for 5% cash back purchases, and the Chase Freedom Visa – $100 Bonus Cash Back for all other purchases or at retailers that don’t take Discover. But if I had to pick just one card, it would be the Discover More Card. The 5% cash back adds up quickly given how we use the card, and it results in more cash rewards than if we just used the Chase Freedom Visa – $100 Bonus Cash Back.
Published or updated April 24, 2012.
{ 19 comments… read them below or add one }
I miss the days when the Chase Freedom card gave 3% back on all purchases. Ever since they stopped, I stopped using the card. I haven’t done a comparison yet, but I think my airline card gets me more rewards than the Chase card. I also have the American Express Blue Card but that’s not good unless you spent a fortune each year at places that take American Express.
Freedom gives 3% in the Top 3 categories that you spend in, so it works out better.
Haven’t used a hotel in a few years, so having quarters where my drugstore visit or groceries are earning 0.25 or best case 1% makes no sense.
Be wary. Discover has an upper limit on the 5% cash back. Its pretty low. $20
Roy, that’s not true. I’ve used the Discover More card for some time, and there is no $20 limit. In fact, I just cashed in $50 worth of cash back rewards today and applied it to my statement.
DR – Roy is right, at least for some of the 5% offers. Last year, the home improvement 5% was capped at the first $400 in expenses in the category, meaning the cashback only came to $20.00.
Fred, thanks for point this out. I just went into my Discover account and you are correct that there are limits. The appear to vary from category to category and even from merchant to merchant. January to March 2010 is travel, for example, and the limit is $800 in purchases. Thanks for clarifying this important point.
I have to go with Chase Freedom, only because there are still so many places that don’t accept Discover.
Kate, that’s a good point, and I wonder how many people share your view. I use the Discover Card everyday, but it is frustrating when a merchant won’t accept it. Of course, I have the Chase Freedom as a backup!
I would probably lean towards the Discover More Card although I am personally not a huge fan of cash back cards with rotating categories (although having multiple cards and using them responsibly is smart as you are doing). I prefer my American Express TrueEarnings Card with 1% to 3% cash back and no rotating categories.
Wow, these cards offer some serious cash back. I am from Canada and am happy to receive my 2% cash back on my visa. I get 2% on groceries, gas and regular bills and 1% on the rest. Any type of rotating system seems like a lot of work for the credit card companies and ultimately will lead to lower profits.
Smac20, the rotating system for Discover Card does require a bit of effort on both their part and a card holder’s. Since I tend to use it for most purchases, though, I don’t really give it much thought.
First time visiting here – great looking site, and good article. The question I was looking to answer is what are the upper limits on the premium categories. Last year, Discover offered 5% back on home improvement purchases only up to the first $400 in expenditures – or $20 as one of your commenters noted. I think the limits go up for other types of benefits.
I was thinking that if Chase’ 3% was unlimited, or very high-limited, it might actually work out better for us.
I had always paid my credit card balance off each month my entire life until my wife lost her job recently. I quickly discovered how a credit card, even one like CITI Bank Master card a customer such as I had had for many years, could raise the interest rate practically as high as they wished.A few weeks ago I discovered your website and on it read about the credit card companies that you could transfer an account balance with your current card to one with a 0% interest rate for a specified time frame. I went with Discover Card because it appeared to be the one that your site thought was best. After I completed their on line form, I submitted it and several days later received and email from them saying they had only transfered a portion of the balance from CITi Bank. The entire balance at CITI was about 15,000.00. The problem is that Discover Card did not give a reason for not transfering the entire balance and they give me no way to contact them. We have never had a late payment of any kind and have paid for 4 cars and a house since we have been married. There are no blemishes on our credit report. If you know how I can contact Discover Card please let me know. I do realize that Discover Card delibertly made it impossible for me to cantact them but I would rather not turn the matter over to the Alabama Attorney Generals Consumer protection division if at all possible. Thank you and I in no way hold your website responsible for a mess I never should have allowed myself to get into.
Travis, with most credit cards you don’t know how much credit they will extend until you apply. Sometimes that don’t give you what you want. I’ve had that happen before, which is why I’ve applied for multiple balance transfer offers before. Anyway, the contact number for Discover should be on the back of your credit card and is available on discover.com. That said, the number is easy to remember: 1-800-DISCOVER (347-2683)
A couple of other key difference between Discover and Chase Freedom that are worth noting:
- Discover doesn’t give cash back EVER for your spend at discount stores, like Target, Walmart, Kmart, Costco, Sam’s Club, etc. — so if you do a bunch of shopping there (like me, at Target), you lose with Discover.
- Discover’s $3000 minimum to move from .25% to 1% cash back resets every year. So you start over every year. And, any money you spend in the 5% cash back categories doesn’t count toward your $3000 “hurdle”. All fine print that they never talk about…
you are mistaken on your take with Discover – READ the Fine print from these lying credit card companies — we spend\t $2000 + this last month on our 2 vacations (thinking we would get $125 back in reward dollars– only to find the $300 limit on cash back netted us just $15). Always assume that ALL Credit card companies will do their Best to F you. READ THE FINE PRINT.
Gator, not sure why you say Discover is lying. They do place caps on the 5% rewards. All cards that offer 5% place caps. And they tell you they do. You may not like the terms and as a result choose a different card, but they are up front with the terms.
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PS I quite like the template you are using – where did you get it from?
This is a extremly valuable post, I found it searching through Google. I believe most people would agree with your point. At last – someone with common sense!
PS I quite like the theme you are using – where did you find it?