Discover it® Miles Card Review: Is It the Best Travel Rewards Credit Card?
Looking for a credit card to earn travel rewards? The Discover it® Miles card is likely to be one on the list of possible choices. With several other popular travel credit cards to contend with, Discover it® Miles stands out because of its extremely low fee.
We look at the card’s features with our takes on these features before comparing Discover it® Miles to one of the best travel rewards credit card currently on the market, the Barclaycard Arrival Plus™ World Elite MasterCard®.
Simple Travel Rewards Program
With Discover it® Miles, you earn a flat 1.5 miles per dollar spent on all purchases with no limits and the miles do not expire. It’s an easy-to-understand rewards program that is already seen with similar travel rewards credit cards like Barclaycard Arrival Plus™ World Elite MasterCard® and Capital One® Venture® Rewards.
What miles are worth
When it comes to redeeming the miles, Discover says that the miles can be redeemed for a cash deposit into a bank or a travel statement credit (a refund that reduces that amount owed on your card). Either way, each mile can be redeemed for $0.01.
Statement credits are possible only for travel purchases made in the last 180 days -- the purchase categories that count as “travel” are: commercial airline tickets, hotel rooms, car rentals, cruises, tour operators, vacation packages booked through airlines, travel agents, online travel sites, and commuter transportation including ferries, passenger railways, taxis, limousines and charter/tour bus lines.
Our take: Since you earn 1.5 miles per dollar spent and each mile is worth $0.01, the Discover it® Miles card effectively is a 1.5% cash back credit card. In this case, the Discover it® Miles card would have to compete with the best cash back credit cards around. The Citi® Double Cash Card, for instance, can let you earn 2% cash back on everything.
We see no advantage in redeeming the miles as a travel statement credit because the valuation is the same whether those miles are redeemed as a statement credit or cash. Because cash is such a versatile credit card rewards (you can use it for anything you want), cash is tough to beat.
Travel Perks Help Cut Costs
Discover it® Miles offers a couple of perks that would be beneficial to travelers. Firstly, you get an annual credit to cover up to $30 for in-flight Wi-Fi charges. For some perspective, Gogo Wi-Fi (offered on most of the major U.S. airlines) charges $5 for one hour of wireless Internet access, or $16 for 24 hours.
Secondly, the card does not charge foreign transaction fees. This is the fee that is normally charged when you use the card abroad. The typical foreign transaction fee is 3% of the purchase amount (e.g., a $100 purchase in Paris will come with an additional $3 fee). Discover it® Miles isn’t the only card to waive foreign transaction fees, all Discover cards stopped charging the fee in 2011.
Our take: It is a nice gesture for Discover to add the Wi-Fi credit for card customers. Also, the card’s lack of foreign transaction fees is great for international travelers who use their credit cards abroad on a regular basis. It actually helps Discover it® Miles set itself apart from cash back credit cards, most of which charge foreign transactions fees. While other credit cards may offer cash back, you could end up saving much more money if you tend to use a credit card during your international trips.
Introductory Bonus Means More Miles
Discover it® Miles has a very interesting introductory offer for new card applicants: the miles earned during the first 12 months of card ownership is doubled. It’s a way to give “travelers using the Discover it® Miles Card the opportunity to determine the number of bonus miles they receive in that first year.”
Many other travel rewards credit cards tend to offer bonus miles after a certain amount of spending (e.g., get 40,000 bonus miles when you spend $3,000 in the first 90 days).
Our take: The introductory offer basically turns the Discover it® Miles cards into a 3% cash back credit card for the first year. The offer is extremely inferior compared to other bonus offers out there.
For instance, the Barclaycard Arrival Plus™ World Elite MasterCard® often has an introductory offer of 40,000 bonus miles when you spend $3,000 in the first 90 days. Those bonus miles are worth $400 in statement credits.
To earn an extra $400 with the Discover it® Miles card during the first year, you’d need an annual card spend of $26,667, which is too much for most people.
Free FICO Scores, Low Fees Help Save Money
Like the Discover it® card, Discover it® Miles has a set of consumer-friendly card perks that are always worth noting because they help Discover stand out amongst the crowded credit card market.
The most notable card perks include:
- Free monthly FICO credit scores
- No late payment fee for the first late payment
- No penalty APR (Your interest doesn't increase when you make a late payment.)
- Access to U.S. based customer service
Our take: Discover is generous for offering these perks to all of its card customers because they’re hard to find with other credit cards.
Free FICO credit scores are a great perk because FICO credit scores normally cost money. Furthermore, being aware of your credit situation will encourage you to handle debt more responsibly. You can watch how your credit score changes depending on your activity with your Discover it® Miles card and other lines of credit.
Also, the late payment fee waiver combined with no penalty APR is convenient in case you forget to pay the bill on time.
The advantage of U.S.-based customer service will vary based on personal experiences. You might value this more if you’ve had unsavory past experiences with credit card customer service reps who were located outside of the U.S.
Compared to Barclaycard Arrival Plus™ World Elite MasterCard®
After reviewing the Discover it® Miles card, it was apparent that the card is a competitor to the Barclaycard Arrival Plus™ World Elite MasterCard® because they had very similar rewards programs.
Travel Rewards Have Different Values
Barclaycard Arrival Plus™ World Elite MasterCard® pays out 2 miles per dollar of spending on all purchases with no limits and the miles don’t expire. When the miles are redeemed for travel statement credits, you get 5% of the miles back. This puts the value of the miles at 2.1 cents per mile.
With Discover it® Miles, each mile has a value of 1.5 cents. (We're looking past the introductory period, while I also disregard the Arrival Plus introductory offer of 40,000 bonus miles after $3,000 in spending, in addition to the waived $89 annual fee for the first year.)
Are Extra Miles Worth the Annual Fees?
The Barclaycard Arrival Plus™ World Elite MasterCard® card has an annual fee of $89. To make this fee worth the cost, compared to the $0 annual fee of the Discover it® Miles, you’d have to spend $12,714.29 within the year.
To help you understand the comparison better, see the interactive chart below, which shows the miles earned depending on how much you spend. You can hover over the line to see what value of the rewards earned, depending on how much you spend. The Barclaycard Arrival Plus™ World Elite MasterCard® starts at -$89 because you've already spent that money due to the annual fee.
The two lines meet at $12,714.29, which means if you spend $12,714.29 or more per year with a credit card, the Barclaycard Arrival Plus™ World Elite MasterCard® is the better travel rewards card. If you spend less than that, Discover it® Miles is more worthwhile.
The high spending required to make the Barclaycard Arrival Plus™ World Elite MasterCard® worthwhile is still quite alarming. However, the lucrative introductory offer is probably enough to get people to sign up.
Accounting for these two perks, we'd say that the Barclaycard Arrival Plus™ World Elite MasterCard® is still the king of travel rewards credit cards.
Compared to Other Discover Credit Cards
Discover offers several credit cards that you might consider over the Discover it® Miles credit card.
- Discover it® is one of the most popular cash back credit cards because you can earn 5% cash back on certain categories that change every quarter. Meanwhile, all other purchases earn a base 1% cash back. Generally, the 5% categories tend to be very appropriate for the season, so there are opportunities to take advantage of them.
- Discover it® Chrome is another cash back credit card that is designed for people who spend a lot on gas and dining out. You can 2% cash back at gas stations and restaurants, while everything else earns 1% cash back.
We like that the Discover it® Miles card features a simple travel rewards program that comes with Discover’s standard suite of customer-friendly card benefits.
We would recommend Discover it® Miles over other credit cards only if you are looking for a simple travel rewards credit card for the long term (as in, you’re not tempted by the bonus offers from these other travel cards). You may consider reviewing your upcoming travel plans (and past travel spending) to see if you could benefit more from a credit card that provides more travel rewards (even if it has an annual fee).