After simplifying down to a single product (Discover it, which actually has student & secured versions) it looks like Discover has decided it’s time to add more credit cards to their line up. That latest offering is Discover Chrome (which also has a student version and presumably a secured as well).
To say that this card sucks is an understatement. Here is a brief overview of the card.
- 2% cash back on all gas station & restaurant purchases (maximum of $1,000 in combined purchases per quarter)
- 1% cash back on all other purchases
- Free FICO score
- No sign up bonus (currently)
- 0% introductory APR for 14 months
Existing Discover it cardholders can do a product change to this card (I’m not sure why you would want to) and there will be no hard pull. The card will also keep it’s account age. This is basically the same card as the regular Discover it, except rather than having rotating 5% cash back categories it has permanent categories of gas stations & restaurants and only gives 2% cash back.
The regular Discover it card has had both of these categories as 5% cash back at least once per year since 2011. Even the existing Discover it card will earn at an average rate of 2% in these categories. Here’s the basic math:
- [(One quarter * 5% cash back) + (Three quarters * 1% cash back)]/Four quarters = 2% cash back
I’m honestly not sure why anybody would want this card. 2% cash back is nothing remarkable, in fact the American Express Fidelity card is 2% cash back on all purchases (no annual fee). If you spend a lot on restaurants or gas stations, you really should be looking for a card that has a high category bonus for those purchases. It’s possible to get cards that earn 5% cash back in these categories (and that’s on a permanent non-rotating basis). If you’re thinking about getting this card, I’d strongly recommend that you don’t. Here are some much better alternatives:
- Gas cards that earn up to 5% cash back
- Restaurant cards that earn up to 5% cash back
- American Express Fidelity: 2% cash back on all purchases
- Barclay Arrival Plus: 2.22% on all purchases (you must have travel expenses to redeem against)
And you’ll get a higher quarterly limit of $1,500 and other rotating 5% categories. This is a terrible change by Discover and one that looks to take advantage of consumers that don’t know better. The only way I could see anybody applying for this card is if they add an attractive cash sign up bonus to it and even then most savy consumers will get the bonus and then never use the card again.
Hat tip to myFICO forums for making me aware of this card.