Miles by Discover Review

This Discover card offers airline miles on all your spending, but it will take a while to earn a free flight.

• People who want to earn travel rewards without an annual fee.

Credit Rating Required

• Good to Excellent (700+)

Pros

• Attractive, unlimited travel rewards.
• No annual fee.
• No blackout dates or restrictions.
• Low APRs.

Cons

• Double miles limited to first $3,000 on travel and restaurant purchases.

Rewards

• Double miles on first $3,000 of spending on travel and restaurants, one mile per $1 everywhere else.
• 1,000 bonus miles for each month you use the card (limit 12,000 miles).

APRs

• 0% for the first six months on purchases and balance transfers.
• 10.99% to 15.99%, depending on credit history.
• Penalty rate: 15.99% to 20.99%.

Fees

• No annual fee.
• Late fee: Up to $35.
• Returned payment fee: Up to $35.
• Balance transfer fee: 3% of balance upon application, then 5%.
• Foreign currency fee: 2% of U.S. balance.

Discover offers two credit cards that reward you in airline miles, not cash back. The Escape card is much better than the Miles by Discover card because Escape pays you double miles on all your purchases, although it does carry a $60 annual fee. The fee is well worth it, especially compared to Miles.

Unlike the Escape card, you only early double miles on your first $3,000 of spending, and even that is limited to travel and restaurant spending. You earn one mile per dollar on all other spending.

You earn bonus miles very easily, but less than half as many as you can earn on the Escape card. Both cards allow you to earn 1,000 bonus miles each month you use the card at least once. Miles by Discover caps your bonus miles at 12,000 miles, compared to 25,000 bonus miles with the Escape card.

Both cards carry the same APRs: 0% on purchases and balance transfers the first six months, then 10.99% to 15.99% depending on your credit history. That means you'll need pretty good credit to qualify for either card.

There's no limit on the miles you can earn, and the miles have no expiration date. There are also no blackout dates or other restrictions. Miles are redeemable for gift cards at any airline.

I guess it depends on how patient you are and how much you're willing to spend whether this card or the Escape card makes more sense for you. It will take you a lot longer to earn a free airline ticket with this card, although you will save the $60 annual fee.

If you're averse to paying an annual fee, a better alternative might be the no-fee version of the Capital One Venture Rewards Credit Card. That card offers 1.25 miles per dollar of spending, 25 percent more than Miles by Discover. Capital One also doesn't charge a foreign transactions fee, which could be an issue if you travel overseas a lot.