Chase Freedom vs Discover It - Discover Wins?

[Jazee]

I'm getting ready to add a card.  I got an invitation from Discover a month ago that is good until Feb 21.  Pretty good deal for someone averaging in the low 700's FICO (700-735).  I was holding off on it as I bank with Chase and like the convenience of easily viewing/paying via transfer by card within the same online banking site but I'm now thinking I'm overrating that benefit.

Although the Discover is a rotating 5% reward card, I already have a USAA Reward Card that has the standard 1.5% on everything like most the rest of the no annual fee reward cards.  So essentially if I would go into Costco or a place not in the 5% Discover category, I'd just use my USAA card. (I only spend about $3K per year at Costco anyway (2-person household) and I hear you can use Discover for Costco online orders.)

The other thing that Discover really kicks Chase's butt on is from all my perusing the credit approval threads, Chase, like many, *on average* establishes a much higher APR and supposedly it's extremely difficult to get that lowered and CLI's are hard pulls.  Discover on the other hand it looks like *on average* at least currently, is giving APRs close to 10% lower than chase.  I'd expect to get a low 20's APR from Chase.  Discover offered me 12.99-15.99% AND CLI's are soft pulls and sound about as easy as the Amazon Store Card from my readings.  

And then the icing on the cake is while Chase has a $200 bonus, Discover will DOUBLE your cash back on your first year of purchases.  So for the first year I wouldn't even use my USAA except in Costco.  If say 2/3 of my purchases weren't in the 5% caregory, (1% reward), and 1/3 was, and I spent say $18K a year on the card.  Then I'd have 1% cashback on $12K = $120 and 5% back on $6K = $300 which is $420 total. This most likely would be in the ballpark of the total rewards I would get on the other cards with the 1.5% base reward.  But then Discover is going to pay me a $420 bonus at the end of the year instead of $200 from Chase.  And there's no limit to how much they'll match! Now the extra $220 isn't going to change my life, LOL, it's probably the least important consideration, long-term, than say the easier soft-pull CLI's, lower APR with ability to go lower, but the extra $220 over Chase is nice perk.

Am I missing something because it sure seems Discover gets a lot less of the spotlight in these threads here than Chase.  Especially when I hear it's accepted just about everywhere (more places than AMEX).  I think the biggest criticism is a lot of people don't like rotating categories (and you can't use it at Costco). But if you have another 1.5% Reward card, seems that doesn't really matter much.

[randomguy1]

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@Jazee wrote:

I'm getting ready to add a card.  I got an invitation from Discover a month ago that is good until Feb 21.  Pretty good deal for someone averaging in the low 700's FICO (700-735).  I was holding off on it as I bank with Chase and like the convenience of easily viewing/paying via transfer by card within the same online banking site but I'm now thinking I'm overrating that benefit.

Although the Discover is a rotating 5% reward card, I already have a USAA Reward Card that has the standard 1.5% on everything like most the rest of the no annual fee reward cards.  So essentially if I would go into Costco or a place not in the 5% Discover category, I'd just use my USAA card. (I only spend about $3K per year at Costco anyway (2-person household) and I hear you can use Discover for Costco online orders.)

The other thing that Discover really kicks Chase's butt on is from all my perusing the credit approval threads, Chase, like many, *on average* establishes a much higher APR and supposedly it's extremely difficult to get that lowered and CLI's are hard pulls.  Discover on the other hand it looks like *on average* at least currently, is giving APRs close to 10% lower than chase.  I'd expect to get a low 20's APR from Chase.  Discover offered me 12.99-15.99% AND CLI's are soft pulls and sound about as easy as the Amazon Store Card from my readings.  

And then the icing on the cake is while Chase has a $200 bonus, Discover will DOUBLE your cash back on your first year of purchases.  So for the first year I wouldn't even use my USAA except in Costco.  If say 2/3 of my purchases weren't in the 5% caregory, (1% reward), and 1/3 was, and I spent say $18K a year on the card.  Then I'd have 1% cashback on $12K = $120 and 5% back on $6K = $300 which is $420 total. This most likely would be in the ballpark of the total rewards I would get on the other cards with the 1.5% base reward.  But then Discover is going to pay me a $420 bonus at the end of the year instead of $200 from Chase.  And there's no limit to how much they'll match! Now the extra $220 isn't going to change my life, LOL, it's probably the least important consideration, long-term, than say the easier soft-pull CLI's, lower APR with ability to go lower, but the extra $220 over Chase is nice perk.

Am I missing something because it sure seems Discover gets a lot less of the spotlight in these threads here than Chase.  Especially when I hear it's accepted just about everywhere (more places than AMEX).  I think the biggest criticism is a lot of people don't like rotating categories (and you can't use it at Costco). But if you have another 1.5% Reward card, seems that doesn't really matter much.

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The Freedom is no longer open for applications. The Freedom Flex right now is a stronger card IMO. In addition to the rotating categories, you get 5% cash back right now on all grocery store purchases up to $12,000 your first year. I'm not sure what your grocery spend is like, but that category alone, puts it over the top for me. If you spend $100 in groceries every week, that's $260.

Additionally:

5%

on travel purchased through Chase Ultimate Rewards.

3%

on dining at restaurants, including takeout and eligible delivery services.

3%

on drugstore purchases.

I think you're looking at your math a little bit funky. Using the Discover at 1% is an inefficient way to use the card. One can argue that it's a 2% card on all other categories the first year however.

To simplify things, it should be $200 vs $300 with the caveat of ONLY if you max out each category every single quarter. Chase's SUB is a bit easier to hit as you only have to spend $500 to get $200 vs potentially spending $6000 to get $300 extra back ($75 x 4). If Chase's other cards interest you, Chase has the additional benefit of it's redemption bonuses if you own a CSP/CSR/CIP so I would consider their ecosystem overall is more robust. 

Both are good cards though. APR is good in an emergency but carrying a balance IMO kills any return back on bonuses so it's not something I personally consider. Lastly, from what I have noticed and personally experienced, Disco CLIs right now are as not as often as before since the beginning of the pandemic, but yes, they are a soft pull.

[Remedios]

I believe 5% offer on groceries is expiring after tomorrow. 

A few things.. on a rewards card, apr should be irrelevant. If you're planning on carrying a balance, credit union is probably a better bet unless you want your rewards eaten by interest. 

Discover is SP CLI, but only if you get one. Some do, some don't. More cards you have, less of chance for decent SL. 

Also, they have been requesting POI for a portion of new applicants, but only after approval. If this isn't something you're willing to provide in case they ask, card will get closed.

[Anonymous]

If you do postpaid cell, Freedom Flex has insurance coverage which can save you a lot of money for no "extra" spending

Bonus is cool too. Sure if you spend more on Disco it may benefit you more, but CFF is a strong card for multiple reasons

[Anonymous]

Another plus for Chase, perhaps longer term, is that the cashback is really Ultimate Reward points, and, with a "transfer" card, the points can be transferred to travel for POTENTIALLY much more value.   They can also be redeemed for 1.25c (CSP) or 1.5c (CSR) for travel on the chase portal, and currently for some non-travel options as well.    But these require an additional card with an AF, so may not be attractive now.

On the pro-Discover side:  generally they produce their rotating categories for the entire year, Chase does it quarter by quarter, so if you wanted to plan (e.g. soon I need to buy an X, if I wait to 3Q I can get 5% back) Discover makes it easier.   

[AverageJoesCredit]

I really like Discover though am disappointed they no longer offer me bts or cli ( to be fair my credit  lines are fantastic on my income) . I think the thing about Chase is they often give much bigger sl than does Discover if your income is good. Their apr are weak but as mentioned when you pay in full its irrelevant especially if you are getting rewards. 

Both have their goods and bads, Disco is not the same Disco preCovid imo , Chase is still the harder cards to get due to their 5/24.  They are what you make of them

[sxa001]

As always it largely depends on profile but I think if I didn't have a revolving categories no AF cashback card and I was debating between current Freefom Flex or Discover I would go with the Freedom Flex, Mastercard is accepted at more places and the etra 3% categories and flexibility of UR's is a factor for me. 

Having both though is ideal if you can get to that point, gives you more coverage throughout the year. 

[Credit12Fico]

My solution is to grab both.

But if you can only have one, I'd pick the Freedom hands down. Chase left the competition for dust with unlimited 3% dining on a no annual fee card. 

[K-in-Boston]

Since my cards are all PIF unless on a promo or BT promo, it's kind of irrelevant, but as a data point ALL of my Chase cards were approved with lower APRs than my Discover card, although I did have it lowered later.  (IIRC my Discover was in the high 15s while my Freedom was in the 12s at the time.)

It has also been a real pain to grow my Discover card and after nearly 5 years it's about 6x the original low starting line, but still only about half my average credit line.

As others have mentioned, 5x URs can be worth much more than 5% when paired with other cards.  I also find Discover's categories to overlap a lot with existing 5% store cards that I have (Amazon, Target, wholesale clubs (BJs), etc.).  Discover it is still a great card, though, and many of my issues have to do with having a huge pile of cards that better it on earnings much of the time and having a lot of available credit.  If I had fewer cards and less available credit elsewhere, I would likely view them differently.

[Jazee]

I should have been more specific, I was referring to the Freedom UNLIMITED, I realize there is an Unlimited and a Flex.  

The Dining and Travel rewards are good but those are typically the first types of spending people eliminate or cut back on in an economic downturn.  In addition, I've found in the past, the CC Travel Desk prices are not typically the lowest you can get if you search around, negating the 5%, UNLESS, you can get the exact same lowest flight price you can find at the same price through Chase, *ANY* flight available.

I agree the APR is irrelevant if you don't carry a balance, which I would NOT with this card. However, one of the most common uses of credit cards is for emergency funds during unexpected significant economic downturns.  Gee, we've not had anything to serious like that happen since 2007?  

I think the closer call is what is better Freedom Unlimited or Freedom Flex?  I would venture to say if you took a million card users spending habbits and applied them to the Unlimited and to the Flex, they'd come out close to the same as the 1.5% for everything else on the Unlimited for many people is going to partially if not fully offset the 5% rotating categories, *on average*.  

For my personal situation, I'd prefer to have the low APR for infrequent short-term balance carrying needs, and easier soft pull CLI, than the Travel/Dining/Drugstore bonus.  But if more difficult hard pull CLI and high APR is no big deal to you, I agree the Freedom Unlimited or Flex has the edge over the Disco.  If you're in the minority with a Freedom APR in the low teens, good for you!  The Unlimited in my mind nudges out the Flex because it has the 1.5% everything with none of the category stuff to keep track of, and, the VISA you can use at Costco.  For all I know, just like studies found that Costco makes people spend more because they consume more when they buy in bulk whether they need it or not, the rotating categories might make people spend more on stuff they really don't need because it's in the 5% category du jour! LOL

My primary reason for adding a card is to increase my total credit bringing my total utilization down and having a higher total available credit for backup emergency use if needing to carry a balance for a limited time (my savings is all invested into my business.)  If the 5% savings on Chase travel was 5% savings on the lowest rates out there for flights/hotels, that might make me think twice. But I have my old Travel Agent license IATA number that still gets me Travel Industry dirt cheap rates that no one can come close to.  Dining I *might* spend $200 a month, max, and virtually never buy from Drugstores. It's all on Amazon at the same or lower price.  I use Costco for ocassional prescriptions. 

It's the classic YMMV.  But I did think in general Disco seems a bit underrated or maybe 'overlooked' is the better word.