Recently readers have been asking me which card offers the best cash back rewards, Discover it® Cashback Match™ 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™||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™, 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™, 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 expires.
I carry both both the Chase Freedom® and the Discover it® Cashback Match™. 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.