Tag: Discover It

Balance Transfer

Discover It Balance Transfer Review

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The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Balance Transfer Review

Updated March 1, 2017

Credit card debt is a burden weighing down the budgets of many Americans. If you’re motivated to unlock the shackles of consumer debt, then a balance transfer may be right for you. But finding the right one can be overwhelming. “Discover it® 18 Month Balance Transfer Offer” is an excellent option for people with debt. You will have an introductory 0% APR on balance transfers for the first 18 months, with a 3% balance transfer fee.

Key Credit Card Features

For people with credit card debt, the most important feature is the generous balance transfer offer. If you transfer debt from any other credit card company, you will pay a one-time fee of 3% of the amount transferred. But you will then pay no interest for 18 months. You could save hundreds of dollars (and potentially more) during the interest-free period. Just make sure you get your transfer completed as soon as the account is opened and that you make your monthly payments on time. 0% for 18 months is one of the best balance transfer credit cards on the market today.

In addition to charging no interest on balance transfers for 18 months, the card charges 0% interest on purchases during the first six months. You will be able to earn cash back on your purchases as well. However, we strongly recommend using a balance transfer credit cards only for balance transfers so that you can get out of debt faster.

Do You Need a Balance Transfer?

Most people who are paying down credit card are subjected to interest rates north of 15%. Reducing interest rates on debt with a balance transfer can slash both the time and money it takes to pay it all down.

But let’s not get ahead of ourselves here, a balance transfer isn’t right for everyone.

[Find out how much you’ll pay in interest on credit card debt here.]

How Do You Qualify For a Balance Transfer?

Banks will only offer balance transfers to people with good credit. Typically, the ideal candidate will have:

  • Customers with a good credit score. Your score does not have to be perfect, but your chances are much better if your score is above 680.
  • Your debt burden will be considered, and the lower the better. In our experience, it becomes difficult to be approved if your debt burden starts to go above 40%.
  • Very few, if any, accounts that are currently delinquent

Note: Your debt burden is calculated by adding up your monthly fixed expenses and dividing that by your monthly income. The expenses should include your monthly rent or mortgage payment, auto payment, student loan payments and the monthly payment on any other credit cards or loans that appear on your credit bureau. If your total payments are more than 50%, you will likely be declined.

Also take into consideration why you’re in debt. Don’t get another credit card if you’re swipe happy and won’t be able to help but spend on the new credit card. A balance transfer credit card needs to go right into the metaphorical (or literal) freezer.

Is Discover It the Balance Transfer Right for You?

promo-balancetransfer-halfThe Discover It balance transfer is only right for you if your credit card debt is with another bank. You cannot do a balance transfer from one card to another within the same bank.

Discover It currently offers an introductory 0% APR balance transfer for 18 months. There is a 3% fee associated with this balance transfer, but the fee often pays for itself — depending on your balance.

If you were approved for a balance transfer of $5,000, a 3% fee would equal $150. That shouldn’t sound like a lot, because leaving $5,000 at a 17% interest rate (with a payment of $250 a month), you’d pay the bank $153.16 of interest in just four months.

The Discover It balance transfer would save you $741, including interest and fees.

Should the Discover It be Your First Balance Transfer Card?

While Discover It does offer a competitive balance transfer, there are other option out there.

With Chase Slate®, you can save with a $0 introductory balance transfer fee, 0% introductory APR for 15 months on purchases and balance transfers, and $0 annual fee. Plus, receive your Monthly FICO® Score for free.

Citi Simplicity offers 0% with a 3% fee for 21 months, which also tops this Discover deal.

The higher the debt, the more attractive Discover’s balance transfer offer becomes.

Fine Print Alert: What to Watch Out For 

If you do complete a balance transfer with Discover, make sure that you:

  1. Complete your balance transfer as soon as possible. If you wait too long, you can lose the offer.
  2. Continue to pay on your old credit card until you see that the balance transfer has been completed. It can take two to three weeks for the balance transfer to complete, and you don’t want to be hit with late fees on your old credit card while waiting for the transfer.
  3. You can only move debt to Discover from another bank. You cannot transfer debt between two credit cards with Discover.
  4. Make your payments on time, every month. They charge a late fee of up to $37, and a returned payment fee of up to $37. Discover does state they waive your first late payment fee on the Discover It card, but that isn’t a benefit you should plan on using.

How to Complete a Balance Transfer with Discover

We’ve created an entirely separate post featuring screenshots and explanations on how to complete a balance transfer with Discover. You can find it here.

If you run into road blocks or have any questions, don’t hesitate to reach out to us via email (info@magnifymoney.com) or on Twitter @Magnify_Money.

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Earning Cashback, Reviews

Chase Freedom or Discover it: Who is the King of 5% Bonus Cash?

Advertiser Disclosure

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Chase Freedom or Discover it: Who is the King of 5% Bonus Cash?

If you’re going to use a credit card, choosing one that rewards you for spending is a given. Choosing the right card? That’s another story. With so many cards offering similar cash back programs and terms it can be difficult to choose one over another.

For example, should you get the Chase Freedom or Discover It?

Both offer 5% cash back categories that change each quarter, with that 5% limited to your first $1,500 in spending on those categories each quarter. Where they differ is in the actual 5% bonus categories, the introductory bonus offer, and some fine print.

In this post, we’re going to dissect both cards and how they stack up against each other.

Chase Freedom

With Chase Freedom, you can earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate. Enjoy new 5% categories every 3 months. Unlimited 1% cash back on all other purchases. Earn a $150 Bonus after spending $500 on purchases in your first 3 months from account opening.

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Discover it® Cashback Match(TM) 

You can earn 5% cash back in rotating categories each quarter like gas stations, restaurants, Amazon.com, wholesale clubs and more, up to the quarterly maximum each time you activate.

From January until March 2017, the bonus categories are gas stations, ground transportation and wholesale clubs.

All other purchases get an unlimited 1% cash back. You can redeem cash back for gifts cards, statement credits, charitable donations, deposits to an account or merchandise.

Aside from the cash back program, Discover it has an introductory special just like the Chase Freedom card. There’s a 0% intro APR for 14 months on purchases and balance transfers. The introductory balance transfer fee is 3%. After the introductory period ends, the regular APR is from 11.49% to 23.49% variable.

Discover it

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Pros and Cons

Now, let’s dive into the pros and cons of both cash back programs.

Chase Freedom

Pro: Good 5% categories for necessities. The pro of the Chase Freedom cash back program is that it covers the bare necessities. There’s a bonus quarter for transportation and groceries, two things that everyone needs.

Pro: A good bonus for small spenders. The $150 Bonus is great perk for new customers.

Pro: Flexible points. While you can always use your points for cash back, the Freedom earns Chase Ultimate Rewards points. That means you can also use them for travel, gift cards, and other items. In addition, if you have another card that earns Chase Ultimate Rewards points you can combine the points for more reward opportunities.

Con: You need a certain number of points to get cash. A drawback of the Chase Freedom card is your point balance must reach 2,000 points before you can start redeeming for cash. That’s easy with the introductory bonus, but after your first cash back redemption, you’ll have to wait until you have at least 2,000 points before getting more cash back.

One point equals $0.01. For the 1% category, you get 1 point per $1. For the 5% cash back category, you get 5 points per $1; $5 in cash back equals 500 points.

Con: You need to activate your 5% bonus. Another negative of the Chase Freedom card is the 5% bonus category requires activation each quarter. If you forget to subscribe to the program, you’ll only get 1% cash back for all spending, so this is a card that you’ll have to actively manage.

Discover it

Pro: A good introductory offer for big spenders. The card doubles all the cash back you earn in the first year with no limits. That can really add up if you tend to be a big spender, though the catch is that bonus double cash back doesn’t hit your account until the very end of your first year. The Chase Freedom’s introductory offer hits your account after just 3 months worth of spending.

Pro: No minimum point balance. You can also redeem cash back at any time, no minimum point balance required. The Freedom requires you to save 2,000 points before you redeem.

Pro: $5 Bonus for gift cards. You get an extra $5 added for each gift card you redeem. So if you have $20 in rewards, you can get a $25 gift card, which is like 1.25% cash value from your base spending.

Con: You need to activate your 5% bonus. Like the Chase Freedom card, Discover it makes you subscribe to the 5% bonus category each quarter. You can set up email reminders, but it’s still a hassle to actively opt-in instead of being about to set that on auto pilot. So, again, this isn’t a card where you can passively earn cash back.

When to Consider Both Cards

Now, it’s possible to have the best of both worlds if it makes sense.

You can get both cards and alternate use throughout quarters so you can take advantage of both card’s 5% bonus categories to get 5% on more of your spending.

For example, if you entertain clients often, you could use the Discover it for restaurants in the second quarter and then follow up with Chase Freedom for restaurants during the third quarter. Or if you’re a big time spender at the holidays (enough to hit that $1,500 cap) then you could switch over to the other card and keep getting 5% back on your holiday shopping.

Of course, you’ll have to remember to activate each bonus category and label the cards in your wallet to know which one to use at what time.

But, if you spend in these areas anyway why not earn cash back for doing so?

There’s no annual fee for either card.

Other Cash Back Card Options

The Nusenda CU Platinum Cash Rewards Card offers a 5% cash back revolving category with 1% cash back on all other purchases. Rates are as low as 11.25% APR with no balance transfer fee. There’s an intro 5% APR deal on balance transfers for the first 6 months.

Even better, you don’t have to activate the categories each quarter. Here are the 5% cash back categories in detail:

  • January to March – Groceries and gas expenses
  • April to June – Movies, restaurants and home improvement
  • July to September – Gas and education expenses
  • October to December – Restaurants, hotels and airfare

platinumrewadscardbynusenda

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The U.S. Bank Cash+ Visa Signature has a rewards program that’s a little different than all three offers above. With this card you can select which category you want to earn 5% and 2% cash back in each quarter.

In the 5% cash back category, you can choose between a large variety of options from clothing stores to movie theaters. The cap for the 5% category is $2,000 per quarter. In the 2% category you can choose from gas stations, restaurants and grocery stores.

As far as the intro special, the U.S Bank Cash+ Visa has a 9-month 0% intro period on balance transfers and new purchases. The interest rate is 13.24% to 24.24% APR after the intro period ends.

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Which Card Will Benefit You the Most?

Overall, the Chase Freedom and Discover it are similar cards. Both have introductory periods with 0% interest and 5% cash back revolving categories. If you’re making a choice of one over the other, your choice would ultimately depend on your spending habits, so you can use the card (or a combination of both cards) to maximize your regular purchases.

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