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They both offer 5% cash back in categories that rotate throughout the year, they have long 0% introductory rates, and neither has an annual fee.
Keep reading to learn how these cards compare in their reward categories, the extra perks, and the potential costs associated with them.
You’ll need to go online and activate your 5% reward category before you can start earning points in it.
Here are the recent 5% cash back bonus categories, plus the 2019 categories up to the third quarter:
|QUARTER||5% CASH BACK CATEGORY|
|2018: October – December||Department Stores, Wholesale Clubs, Chase Pay|
|2019: January – March||Gas Stations, Tolls, Drugstores|
|2019: April – June||Grocery Stores, Home Improvement Stores|
|2019: July – September||Gas Stations, Streaming Services (includes Netflix, Hulu, Sling, Vudu, FuboTV, Apple Music, SiriusXM, Pandora and Spotify)|
With this card, you’ll get:
Like the Freedom card above, you’ll need to go online and activate your 5% reward category before you can start earning points in it. If you forget to activate, you’ll need to contact customer service to get your rewards added retroactively to your past purchases.
You can redeem your cash back at any time and for any amount, or you can apply your rewards directly to purchases from Amazon.com.
The 5% cash back calendar for 2019 is:
|Quarter||5% Cash Back Category|
|January – March||Grocery Stores|
|April – June||Gas Stations, Uber, Lyft|
|July – September||Restaurants, PayPal|
|October – December||Amazon.com, Target, Walmart.com|
The right card for you will depend on your own shopping habits, so take a look at the cash back categories above.
I think the Discover card comes out on top here, because it tends to offer more general categories, giving you more potential retailers to earn 5% back at.
The Freedom card might be right for you if you’re a huge fan of Starbucks, Bed Bath & Beyond, and Overstock.com, but take note that you’ll only be able to get that 5% back for 3 months out of the year at those stores.
The Discover it will probably get you more rewards throughout the year, especially because Discover is doubling the cash back for the first year for new cardholders. This means you’ll eventually earn 10% cash back for purchases in those categories, and 2% cash back for every other purchase.
This offer makes the Discover it one of the most rewarding cards available today.
The Chase Freedom is available in 2 possible service levels: regular Visa, and the premier-level Visa Signature.
The service level you get will depend on your credit history and finances; the most qualified applicants will enjoy more perks with Visa Signature, but the regular Visa service is not bad at all either. (Visa Signature benefits are listed below the standard benefits)
Purchase Protection: Covers new purchases against damage and theft for 120 days, up to $500 per claim and $50,000 per account.
Extended Warranty Protection: Extends an original U.S. manufacturer’s warranty by up to 1 year, for eligible warranties of 3 years or less.
Zero Liability Protection: You won’t be held responsible for fraudulent or unauthorized charges.
Chip-and-Signature Technology: This card is EMV-enabled with Chip-and-Signature technology for increased security and better accessibility in foreign countries.
Travel and Emergency Assistance Services: Provides help if you get into trouble away from home, including medical and legal referrals.
Roadside Dispatch (for Visa cards) / Roadside Assistance (for MasterCard cards): For Visa cards, call 1-800-VISA-TOW for any kind of help on the road, like towing or a tire change ($59.95 fee per service call). For MasterCard cards, call the customer service number on the back of your card (service fees will apply).
Auto Rental Collision Damage Waiver: Provides coverage against collision damage and theft for rented cards, as long as the car rental company’s own insurance is declined.
If you qualify for a Visa Signature-level card, you’ll also receive these benefits.
Trip Cancellation / Trip Interruption Insurance: Provides a reimbursement up to $1,500 per person and $6,000 per trip for your pre-paid, non-refundable passenger fares, if your trip is canceled or cut short by sickness, severe weather and other covered situations.
Free FICO Score: Just log into your account online and you’ll be able to see your FICO score for free (provided by TransUnion).
Spend Analyzer: A tool to help you track and understand where your money is going.
Cash at Checkout: Use your Discover it card like a debit card to get cash back when shopping at participating retailers. The extra cash will simply be added to your purchase amount, and will fall under the regular purchase APR.
Zero Liability Protection: You won’t be held liable for fraudulent charges.
As you can see, you’ll get quite a few more perks with the Chase card than the Discover.
But a great feature that the Freedom card lacks is the free FICO score, which would normally cost you money. This will help you monitor your credit and see how your score changes over time and in response to changes in your finances.
When it comes to travel, the Freedom card has the edge here. It will give you some benefits that the Discover it won’t, like Travel and Emergency Assistance Services, Roadside Dispatch, and more if you qualify for the Visa Signature level. These perks can definitely be useful, especially if you travel often, but it’s also possible that you won’t ever need them.
|Chase Freedom||Discover it|
Visa Signature Travel Benefits:
|Card||Annual Fee||Intro APR||Regular APR||Intro Balance Transfer APR||Regular Balance Transfer APR||Cash Advance APR||Foreign Transaction Fee|
|Chase Freedom||$0||0% for 15 months||16.49% - 25.24% Variable||0% for 15 months||16.49% - 25.24% Variable||26.49% Variable||3% of each transaction in U.S. dollars|
|Discover it||$0||0% for 14 months||13.74%–24.74% Variable||0% for 14 months||13.74%–24.74% Variable||26.74% Variable||None|
|Card||Penalty APR||Late Fee||Returned Payment Fee|
|Chase Freedom||None||Up to $39||Up to $39|
|Discover it||None||$0 the first time; up to $39 after that||Up to $39|
The costs and fees of these cards are quite similar – they both have quite long 0% introductory rates, though the Freedom’s is 3 months longer (not a major difference, in my opinion). After that, the regular purchase APRs are almost identical.
Neither of these cards have a penalty APR that could be applied if you miss a payment, but only Discover will forgive your first late payment (again, not a major difference, but a nice touch).
Other than that, the only real difference here is that the Freedom card has a 3% foreign transaction fee, so you won’t want to bring it with you when traveling out of the country. The Discover it has no transaction fee.
Check the 5% categories above: do you find yourself in those stores often? Many people do, and chances are one of these cards could help you save some money on your everyday spending.
Keep in mind that the Discover it is also doubling the cash back that new cardholders earn after their first year, making this a very rewarding card.
10% off in those categories is a great discount, especially when you take a look at the savings you’ll get during the holiday season.
Unfortunately you won’t get a signup bonus with the Discover it like you do with the Freedom, but this is a small price to pay when you consider how long you’ll be using the card and racking up savings.
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