Recently readers have been asking me which card offers the best cash back rewards, Discover More or Chase Freedom. since I carry both and have used their cash rewards, it seemed like a great question to address.

At first glance, it would seem that the Discover More card is the best bet. It offers cash rewards of up to 5%, while the Chase Freedom card tops out at 3%. Like so much in life, however, things aren’t always as simple as they first appear. So before we evaluate these two cards, let’s make sure we get the facts straight:

As you can see from the above details, picking a cash back winner is not so simple. the best card will depend on how you will use the card. So let’s evaluate the key features, which should enable you to pick the best card based on your specific purchases.

5% Cash Back v. 3% Cash Back

The first consideration is to what extent you’ll take advantage of the top tier cash back offers. For the Discover More card, here are the 5% categories:

October – December
• Grocery Stores
• movie Theaters
• Restaurants
• Movie Rentals

January – March
• Airlines
• Car Rentals
• Hotels
• Cruises

March
• Grocery Stores
• Drug Stores

April – June
• Home Improvement Stores
• Department Stores
• Clothing Stores

July – September
• Gas Stations
• Movie Theaters
• Hotels
• Movie Rentals

We go on vacation during the summer, so this past year we saved 5% on hotel costs. For us, just saving 5% on hotels each year makes the Discover Card the best choice for us. the key is to determine to what extent you’ll take advantage of the 5% cash back categories. For those that spend a lot within these categories each year, the Discover More card is difficult to beat.

With Chase Freedom, the categories are no so clear. Freedom offers 3% cash back on rotating categories like gas, home improvement and department stores. the problem is that these categories are not defined by quarter like the Discover More card, so planning ahead is difficult. as result, Discover More takes top prize for its 5% offer.

Cash Back on Everyday Purchases

Here, the Chase Freedom card takes the prize. While you can earn 1% on everyday purchases with the Discover More card, the 1% only kicks in once you’ve spent $3,000 on the card each year. with the Chase Freedom card, you earn 1% from your very first purchase.

How important this difference is to you depends in part on how much you use the card. if you only spend $3,000 a year on the card, the Freedom card’s 1% will be pretty important. on the other hand, if you charge $30,000 a year, the difference may not matter much.

0% Offers

If cash back is your only consideration, the 0% offers aren’t all that important. if you do care about this feature, the choice comes down to whether you want a balance transfer (which favors the Discover More card) or no interest purchase option (which favors the Chase Freedom card).

If getting a no interest card is important, you may want to check out our list of 0% APR credit cards and list of 0% balance transfer offers.

Up to 20% with Online Retailers

Both Discover and Chase have developed relationships with online retailers who offer cash discounts of up to 20%. as a result, this factor is basically a tie. It is worth noting that Discover’s website is extremely easy to use.

Interest Rates

The regular APR is less on the Discover More card than the Chase Freedom card by several percentage points. if you plan to carry a balance from month to month, the Discover More card is the better option. if you pay off your card in full every month, the difference in interest rates won’t matter.

$50 Bonus

Chase Freedom offers a $50 bonus after your first purchase. While “free” money is great, I don’t find this feature all that compelling in and of itself. It’s a one-time bonus that will be quickly forgotten. if you choose the Freedom card for other reasons, however, the $50 rebate is a nice extra.

Final Thoughts

I carry both the Discover More card and the Chase Freedom card to maximize cash back rewards. you can use the Discover Card for 5% cash back purchases, and the Chase Freedom card for all other purchases or at retailers that don’t take Discover. but if I had to pick just one card, it would be the Discover More card. the 5% cash back adds up quickly given how we use the card, and it results in more cash rewards than if we just used the Chase Freedom card.

So what’s your take? Which is better, the Discover More card or the Chase Freedom card?

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Cash Back Smackdown: Discover More vs. Chase Freedom(SM) | Credit Guy