It’s already been established that for a long-term points strategy, the Chase Freedom is the best starter card for the way it works with the other Chase cards. But what about a 1 to 1 comparison?
The DiscoverIt card is the strongest contender because of the many characteristics it shares with the Chase Freedom. I myself started with the DiscoverIt student when I first started college.
Both the DiscoverIt and the Chase Freedom have $0 annual fees
The Chase Freedom gets the upper hand here with it’s $150 (15,000 point) sign-up bonus when you spend $1,500 in the first three months of card activation.
This is where these two cards really distinguish themselves from the rest of the pack. The DiscoverIt and the Freedom both have rotating quarterly 5% cash back categories. What that means is that every 3 months, starting in January, there are certain purchase categories that will award you 5 points for every dollar spent. Both cards limit the maximum number of 5% points to $1,500 over the 3 month period, but that can be a hard number to hit for many of us who use this as our first credit card. Once you hit that $1,500 threshold, you’ll just receive the normal 1% cash back rate for both cards.
Here’s what Discover’s calendar for 2018 looks like.
This calendar for Chase is from a previous year as Chase doesn’t provide information on its categories until a few weeks prior to each quarter. As you can see, the categories are very similar. However, these aren’t set in stone and can change in the entirety of the category and/or quarter they are offered.
Make sure you enroll in the 5% cashback for Chase. As long as you do it before the end of the quarter, you’ll be credited for all the previous purchases during that quarter. Not sure why they do this, but they’re good about sending you reminders to activate it via email.
The differentiator for rewards is DiscoverIt’s first year cashback match. So if you earned 5,000 points over the course of your first 12 months, Discover will double that amount and reward you with 10,000 points. So the value of this reward really depends on your spend for that first year. Remember, 1,000 points is equivalent to $10 when you redeem your points as a credit to your credit card statement. This is true of the Freedom as well.
The Freedom on the other hand does have the extra $25 (2,500 points) bonus just for adding an authorized user and having them make a purchase within 3 months. There’s no added cost and no penalty for adding one. So go ahead and add your responsible brother or sister and have them pay you back for their purchases. And no, that’s not being selfish. Don’t forget you’re providing them the convenience of having a card themselves.
The Chase Freedom offers 0% APR for the first 15 months including balance transfers while the DiscoverIt card offers 0% APR for the first 14 months on purchases and balance transfers. Once the initial grace period is over, Chase raises its APR anywhere within 16.24 to 24.99% whereas the DiscoverIts rate can be as low as 12.24 to 24.24%.
Both of these cards are great cash back rewards cards and a lot easier to obtain when entering the credit card world, but if you want my personal opinion, read about it here. Do your best to really capitalize on those quarterly categories because they really do add up. And if you’re having trouble, check out some of the strategies I’ve personally used. Don’t delay, get your credit card and building your credit score!
Whether this is your first card or seventh, be aware of your spend and try your best to pay off your debt in full at the end of every month. Why not start your credit journey on a high note and build good purchase habits?