This Credit Card's Sign-Up Bonus Is Almost Too Good to Be True

There is a tremendous amount of competition in the credit card industry right now, and this has led to some excellent offers for consumers. Whether you prefer cash back, points, or airline miles, it's quite common to get a bonus worth several hundred dollars simply for signing up for a new credit card and meeting a spending requirement within a given timeframe.

While there are some great offers out there, if you plan to use one particular card a lot, you might be surprised at how much of an introductory bonus you can get.

This offer is surprisingly generous

At first, the welcome offer from the Discover it® Cash Back credit card might not sound as appealing as some of its competitors. After all, other no annual fee credit cards offer welcome bonuses of $200 back after spending $2,000 on purchases in three months, or something similar. And these certainly aren't bad offers, especially if you're going to use the card just enough to qualify for the bonus.

On the other hand, if you actually plan to use the credit card as a primary spending tool, you might be surprised at the bonus you can get from the Discover it® Cash Back.

Instead of offering a flat bonus amount after meeting spending requirements, the Discover it® Cash Back credit card offers the unlimited cashback match. In simple terms, Discover will match all the cash back you’ve earned at the end of your first year.

How much can this be?

Let's do a little math here. The cash back rewards program of the Discover it® Cash Back has two different rates:

• 5% cash back on categories that rotate quarterly and must be activated. These can include grocery stores, restaurants, online shopping, and several others. The 5% rate maxes out at $1,500 of spending per quarter (so, a maximum of $6,000 of spending per year).
• 1% back on other purchases.

First, let's look at an example of a cardholder who spends just enough to max out the bonus categories each quarter. This would translate to $6,000 of spending at a 5% cash back rate, which would give you $300 back. However, Discover would match this amount as your welcome bonus at the end of your first year, so you'd receive an additional $300. This is already a highly competitive welcome bonus.

Now, let's look at someone who uses the Discover it® Cash Back as their primary credit card for everyday purchases. They spend $2,000 per month on the card, including maxing out the 5% cash back categories. That's $24,000 in total spending, $6,000 of which would get rewards at a 5% rate ($300) and $18,000 of which would earn 1% back, or $180.

Putting this together shows a total of $480 cash back, and as your welcome bonus, Discover would give you an additional $480 at the end of that first year, for a total of $960.

This can be a big welcome bonus if you actively use the card, especially for a credit card with no annual fee. In this category, welcome bonuses in the $100-$300 range are most common.

Is the Discover it® Cash Back credit card right for you?

In addition to the cash back program and unlimited cashback match welcome bonus, it's also worth noting that the Discover it® Cash Back credit card offers a 0% intro APR for 15 months on both purchases and balance transfers, as well as no foreign transaction fees.

The bottom line is that the Discover it® Cash Back credit card's welcome offer is designed to be most appealing to big spenders and encourages day-to-day use of the card -- as opposed to aggressive use for the first few months until a specific spend requirement is met. If you believe you'd earn more than the $200-$300 welcome bonuses offered by other no annual fee credit cards with your spending, the Discover it® Cash Back card's welcome offer could make this card the most lucrative choice for you.