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The Discover it® Cash Back offers 5% cash back in rotating categories, while the Bank of America® Cash Rewards Credit Card boasts 3% back in a category you choose, plus 2% back at grocery stores and wholesale clubs. But which card is better? Ultimately, the answer depends on your spending habits. And who says you can’t use both at the same time?
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The BofA Cash Rewards card provides 3% cash back in the category of your choice every month, out of six options, while the Discover it® Cash Back has rotating cash back categories that change throughout the year. Each card offers an introductory 0% APR on purchases and balance transfers for a relatively long period, and neither one has an annual fee.
The first is good for the kinds of purchases most of us typically make pretty often, while the second will be better for different kinds of purchases as the year goes on. Read on to learn if one of them might be a good card for you.
|Bank of America Cash Rewards||Discover it® Cash Back|
The 5% cash back calendar for the Discover it® Cash Back for 2020 is:
|Quarter||5% Cash Back Category|
|January – March||Grocery Stores, Walgreens, CVS|
|April – June||Gas Stations, Wholesale Clubs, Select Streaming Services|
|July – September||Restaurants, PayPal|
|October – December||Amazon.com, Target.com, Walmart.com|
You can redeem your points as a statement credit, which is the typical way, or you can use them to pay for purchases directly through Amazon.
These cards have very different reward structures. Would you rather get 3% back on a category of your choice (from a few preset choices) and 2% back at grocery stores and wholesale clubs? Or would you rather get 5% back (10% after it’s doubled) on different types of purchases throughout the year?
The BofA has a higher quarterly limit than the Discover it® Cash Back, which helps even out the earning potential after the Discover’s Cashback Match offer has come to an end. The most you can earn with either card’s bonus categories per quarter (after the first year) is $75, so the card that’s best for you basically comes down to your own spending habits. Which card would provide you with the most discounts?
Then, there are introductory offers to consider. The BofA card features a traditional intro offer, giving you $200 for spending $1,000 within the first 90 days of account opening. That’s a great return on spend.
Cashback Match, which doubles the rewards you earn with the Discover it® Cash Back at the end of the first year, offers greater potential value, but you’d need to spend $2,000 in the card’s 5% rewards categories (which are then doubled to 10% during the first year) to match the BofA’s $2,000 bonus. Fortunately, you have the whole year to do it rather than just three months.
Can’t decide which rewards program you prefer? You can also consider using both cards. Use the Discover it® Cash Back any time you’ll be able to get 5% cash back, and then use the Cash Rewards card any other time. Using several credit cards isn’t bad for your credit – learn about the value of carrying multiple credit cards.
The Chase Freedom® (Review) is almost exactly like the Discover it® Cash Back, except it features a more typical introductory offer, if that’s your thing. Another notable difference is that the Freedom card’s 5% cash back categories aren’t revealed until a few weeks before the quarter begins.
Each of these cards offers a nice set of additional benefits, but the Discover it® Cash Back clearly wins in this category. The shopping and travel protections could really come in handy in certain situations, and you won’t get those with the Bank of America card.
Here’s a side-by-side comparison of the benefits offered by each card:
|Bank of America Cash Rewards||Discover it® Cash Back|
|Card||Purchase APR||Balance Transfer APR||Cash Advance APR|
|Bank of America Cash Rewards||0% for 15 billing cycles, then 13.99%–23.99% Variable||0% for 15 billing cycles, then 13.99%–23.99% Variable||16.99%–28.99% Variable|
|Discover it® Cash Back||See Terms for See Terms, then See Terms||See Terms for See Terms, then See Terms||See Terms|
|Card||Annual Fee||Foreign Transaction Fee|
|Bank of America Cash Rewards||$0||3%|
|Discover it® Cash Back||$0||None|
|Card||Balance Transfer Fee||Cash Advance Fee|
|Bank of America Cash Rewards||3%, $10 minimum||See Terms|
|Discover it® Cash Back||See Terms||See Terms|
|Card||Penalty APR||Late Fee||Returned Payment Fee|
|Bank of America Cash Rewards||Up to 29.99% Variable||Up to $40||Up to $29|
|Discover it® Cash Back||None||See Terms||See Terms|
As you can see, these cards have very similar costs and fees, and one isn’t significantly better than the other.Read more Best 0% APR Credit Cards of May 2021
The Bank of America® Cash Rewards Credit Card (Review) and the Discover it® Cash Back (Review) both rank among the best credit cards with no annual fee, and they can be very valuable when used responsibly. The bottom line? Neither is necessarily better than the other.
Consider the rewards and benefits you’ll get with each credit card offer, because the interest rates and fees are about the same. Think about your personal shopping habits: would it be better for you to earn 3% back on a category of your choice plus 2% back at groceries and wholesale clubs all year round, or would it be better to get 5% cash back (10% after it’s doubled) in the four Discover it® Cash Back categories?
Don’t forget, it’s not a bad idea to have multiple credit cards. This would let you earn 5% back in the Discover it® Cash Back categories whenever they’re available, and then 3% and 2% back in the Bank of America card’s bonus categories when your purchases qualify.
If you use one of these cash back cards, how do you like it? Leave your own review of the Bank of America Cash Rewards Card or the Discover it® Cash Back card below, we’d love to hear from you!
Brendan has been writing about personal finance for over eight years, and is now taking on the challenge of bringing high quality credit education to the masses. He makes sure that Credit Card Insider is covering the most important credit topics transparently and precisely, and that we have up-to-date reviews of credit cards so you can find cards that are right for you.
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