Photo: The Points Guy

If you’re overwhelmed by labyrinthine matrices of transfer partners, airline statuses, and annual fees, a cash back credit card might be right for you. While they don’t offer the same lucrative returns as premium travel rewards cards, they can be a lot simpler to use, while still offering a ton of value despite not charging an annual fee. Case and point, the Discover it® Miles card.

Don’t let the name fool you, this is a “miles” card in name only. You’ll earn 1.5 miles per dollar spent on all purchases, and those miles are worth exactly $.01 each no matter what you do with them. Discover’s website lets you link your miles to your Amazon account to make purchases, get cash back on your card statement, or “erase” travel purchases after the fact, but their value is the same no matter how you spend them. There are definitely more lucrative cards out there, but few are simpler.

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The Discover it Miles card has no annual fee. Yay!

That being said, it also doesn’t have a traditional welcome offer with a big pot of points at the end of a three month spending rainbow. Instead, after you’ve held the card for a year, Discover will match whatever cash back you’ve earned to date.

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So let’s say you spent $20,000 on the card in 12 months. In this scenario, you’d have earned 30,000 “miles” over that time, worth precisely $300 in cash. A year after you opened your account, Discover would give you an additional 30,000 miles, effectively turning it into a 3% cash back card for your first year. That’s a terrific rate of return for a no-annual-fee card, and would make it a great “backstop” card to use on purchases that wouldn’t qualify as bonus categories on any of your other cards.

Unfortunately, the cash back match only happens one time; it’s not repeated every year.

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This being a no-annual-fee card, Discover it is pretty skimpy in the perks department, but it does let you check your FICO credit score for free at any time, and actively alerts you when any new accounts appear on your credit report, so you can stay on top of identity theft threats. It also doesn’t charge any foreign transaction fees. Your points also never expire, and if you close your account, Discover will actually credit you back the value of your remaining miles.

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After your first year, there are probably better cash back cards than the Discover It Miles. I’m partial to the Wells Fargo Propel’s suite of perks and bonus categories, and the Chase Freedom Unlimited offers the same 1.5% back, but with ability to pool your points with your Chase Ultimate Rewards account.

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However, thanks to that one-time anniversary points matching bonus, it can really pay (3%, to be precise) to use the Discover it Miles, at least for the first year.


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