I recently wrote about how it's a great time to sign up for travel rewards credit cards, because the sign-up bonus offers are hot. But I just found another travel rewards card that, although it doesn't offer a sign-up bonus, is worth considering: the new Discover it Miles credit card.
It's yet another card that's aimed at travelers who aren't loyal to a specific airline, like the already popular Capital One Venture card or the Barclaycard Arrival World Plus Elite MasterCard. These cards all let you earn points for your purchases, which can then be applied as statement credits against any travel purchases you make on the card. No membership in a travel loyalty program is required. But instead of offering a sign-up bonus like Capital One and Barclaycard do, this card has a twist: At the end of the first 12 months of owning the card, Discover will double all the points you've earned.
Here's how it works. For every dollar you spend using the card, you earn 1.5 miles that go toward statement credits. And every dollar you accrue is worth one cent, so 10,000 Discover miles equals $100.
If you spend $10,000 in the first year of owning the card, here's how the math shakes out:
$10,000 spent = 15,000 miles
15,000 miles X 2 = 30,000 miles
30,000 miles = $300 statement credit
The card carries no foreign transaction fee -- a must-have if you're traveling abroad -- and you get up to $30 credited back to your account for in-flight Wi-Fi purchases. And while similar cards come with an annual fee (typically waived in the first year), this one doesn't carry one at all. You'll also have free monthly access to your FICO score, worth $150 at myFico.com.
Even with the first-year miles bonus, though, you're still probably better off with the Barclaycard if you spend at least $475 a year because you'll rack up $440 in travel statement credits with the sign-up bonus alone.
That said, if you like getting actual cash back -- not just a statement credit -- this card offers one of the best deals around in the first year. That's because Discover lets you redeem the miles for a statement credit -- or as a direct deposit into your bank account. If you spend $10,000 on the card in the first year, you get $300 cash in your pocket -- essentially, a 3 percent cash-back rate. That's much better than the other cash-back cards are offering, which give you, at best, 2 percent cash back.