Chase Freedom® vs Discover it® Cash Back: Which is best for you?

If you’re looking for a credit card with generous cash back on day-to-day purchases, then a card with rotating rewards could be a great option. These cards usually offer attention-grabbing cash back rates on specific categories that change on a quarterly basis. This means you’ll be well-rewarded provided your spending throughout the year matches the different bonus categories. Chase Freedom and Discover it® Cash Back are arguably two of the most popular cash back cards with rotating categories. They both come with no annual fee, and their offerings are similar in many ways.

The catch? You’ll have to keep track of rewards categories and activate them to be given the full cash back rate. There are usually caps on how much of your spending can qualify for extra rewards too. But if you don’t mind the maintenance involved, rotating categories can offer a great way to get more from your spending.

At a glance comparison

Before getting into the specifics of how these two rewards programs work, let’s take a look at how the two cards stack up on the basics.

Chase FreedomDiscover it Cash Back
Annual Fee$0$0
Rewards Rates5% cash back on first $1,500 purchases in bonus categories applicable to that quarter. 1% unlimited cash back on all other purchases.

5% cash back up to the quarterly maximum of $1,500 in specific bonus categories. 1% cash back on all other purchases.
Welcome Bonus$150 cash back if you spend $500 within the first 3 months; 0% Introductory APR for 15 months, on both purchases and balance transfers. After that, there is a variable APR of 16.49% – 25.24%.Discover automatically matches the cash back you’ve earned at the end of your first year, dollar-for-dollar. 0% Introductory APR for 14 months, on both purchases and balance transfers. After that, there is a variable APR of 13.49% – 24.49%.
CreditsNoneNone
Lounge AccessNoneNone
Authorized User Fee$0$0

Standout features

Chase Freedom

  • Broad rotating bonus categories that will likely match the spending of many cardholders, including gas and groceries, so there’s a better chance of earning more points.
  • You can redeem cash rewards flexibly with options like statement credits or direct deposit into your bank account. You can also use points to shop on Amazon, redeem as gift cards for shopping, dining or entertainment, or transfer as Chase Ultimate Rewards points to use for travel.
  • As there are no minimum redemption requirements and rewards won’t expire for the life of the account, you’ll be able to redeem points when it suits you.
  • Enhanced security with account alerts and $0 liability on unauthorized purchases.
  • Extra protection on big-ticket items for 120 days against damage or theft, up to $500 per claim. You can also get 12 months of extended warranty.

Discover it Cash Back

  • Broad rotating bonus categories that will likely match the spending of many cardholders, including gas, groceries and restaurants, so there’s a better chance of earning more points.
  • You can redeem cash rewards flexibly with options like statement credits, direct deposit into your bank account or a donation to select charities. You can also use rewards to shop on Amazon, redeem as gift cards or eCertificates, if you have at least $20 in cash back bonus.
  • As there are no minimum redemption requirements and rewards won’t expire for the life of the account, you’ll be able to redeem cash back rewards when it suits you.
  • Enhanced security with account alerts, $0 liability on unauthorized purchases and Social Security number monitoring service.
  • Free overnight shipping for card replacement to any U.S. street address if your card is lost or stolen.
  • No late fee on your first late payment as you become accustomed to the billing cycle of your new card. 

The case for the Chase Freedom

Chase Freedom edges out Discover it Cash Back in the following areas.

Receive welcome bonus sooner

Not only is Chase Freedom’s sign-up bonus generous at $150, you also receive it six to eight weeks after qualifying — much sooner than having to wait for a full year to get your matching cash back from the Discover it Cash Back card. The introductory period without interest is also one month longer.

More time to activate categories

A big plus with Chase Freedom is that you can activate your bonus category later — generally around the middle of the last month of the quarter — and still get 5% back on eligible purchases made before opting in. This takes the pressure off cardholders who tend to forget or simply don’t have the time to get onto this kind of stuff quickly.

Useful perks and flexible rewards structure

With Chase Freedom, cash back rewards are tracked as Chase Ultimate Rewards points, so $1 in cash back rewards is the same as 100 points. The Chase Ultimate Rewards program is highly flexible, and there are a variety of redemption options — including travel rewards. You can even combine points across eligible accounts to give you more redemption power.

Many shoppers will also find benefits like extended warranty and purchase protection handy when buying big-ticket items.

The case for the Discover it Cash Back

Discover it Cash Back holds its own in the following ways.

More planning time

The biggest advantage you’ll have by going with Discover is that bonus categories for each quarter are announced at the beginning of the year. This is a huge consideration because it allows you to see how well your spending matches the rewards categories and potentially time some of your purchases so you can maximize your cash back.

Welcome bonus worth the wait

While you’ll have to wait longer for your welcome bonus, there’s an opportunity to earn a bigger amount with Discover’s dollar-for-dollar cash back matching promise.

Little things that make a difference

Although you won’t get useful perks like extended warranty and purchase protection, Discover makes up for this with zero foreign transaction fees and no late fee on your first late payment. They also provide a Social Security number monitoring service, free credit scorecard and complimentary overnight shipping for card replacement.

However, it’s worth noting that despite being cheaper to use overseas, Discover cards are generally not as widely accepted outside of the U.S.

In a nutshell

Both cards offer zero annual fees, fantastic cash back rates and broad rewards categories. If you value extra time to plan your spending so you can maximize your cash back, then the Discover it Cash Back Card is the way to go. But if you prefer more time to opt-in for bonus categories while still getting the top rewards rate for all eligible purchases for the quarter, then you’re better off with Chase Freedom. Another potential deciding factor is whether you have another Chase credit card to combine your points, so you can have even more redemption power when claiming rewards through the Chase Ultimate Rewards program.

Kristie Kwok

Kristie Kwok is a finance content writer with in-depth knowledge of the banking industry from her previous work experience in banks such as UBS, Lloyds Banking Group and Royal Bank of Scotland. She is a qualified accountant with a Bachelor of Commerce degree, specializing in Accounting and Finance.