Review of the Discover Escape Credit Card
Last Reviewed: 7/17/2010
The Discover Escape credit card (aka Escape by Discover) masquerades as a travel credit card, but is really a cash-back credit card with restrictions on how the cash back can be redeemed. Restrictions aside, this piece of plastic is a heavy hitter, and is PlasticIQ’s top-ranked cash back credit card when examined over a 3-year usage period.
| Rank | 1 (out of 33 cashback cards tracked by PlasticIQ |
| Value of rewards* | $1,466 |
| Value of rewards for 2nd place card (Schwab Visa Cashback) | $1,440 |
*Based on PlasticIQ’s standard spending profile for 3 years of card usage
| Rewards | 2 miles for every $1 spent, no spend category restrictions |
| Sign-up Bonus | 25,000 miles, earned 1,000 per month (must use card for at least one purchase that month) for first 25 months. |
| Miles expiration | Never expire; however, if your account is closed or inactive for 18 months or you fail to make the minimum payment due for 2 months in a row, your miles will be lost. |
| Mileage caps | None |
| Redemption requirements | Miles can be redeemed for any airline, cruise, vacation package, hotel or car rental (no booking restrictions or requirements); $100 travel credit for every 10,000 miles. Miles must be redeemed within 90 days of the travel event posting to your account. |
| Annual fee | $60 |
Escape by Discover Rewards
Cardholders earn 2 “miles” for every $1 of spend, with no restrictions or earning caps. The reason this card is more like a cash back card than a travel card is because these so-called miles can be used to off-set most types of major travel (airline, cruise, vacation package, car rentals).
These rewards behave much more like a cash back statement credit than airline miles. As long as you do even a modest amount of travel each year, you should be able to take full advantage of these rewards and the card will effectively behave like a cash back card.
Alternate Redemption Options for Discover Escape Card
The only valuable redemption option is applying miles towards travel, since your miles are then valued at $0.01 per mile. But for the sake of completeness, we do mention the other redemption methods.
You can redeem 5,000 miles to get a $25 Discover gift card—a horrible redemption value of $0.005 per mile. Equally bad, you can receive an electronic bank deposit of $25 for 5,000 miles. You can also use your miles to purchase gift cards, but as the table and screenshot below illustrate, the exchange rates are quite bad. The best value you can hope to achieve, if you buy the most expensive partner gift cards, is around $0.0083 per mile–really quite bad even when compared to a basic 1% cashback card.
| Value of Partner Gift Card | Miles Required | Value/Mile |
|---|---|---|
| $5 | 1,000 | $0.0050 |
| $25 | 4,000 | $0.0062 |
| $50 | 7,000 | $0.0071 |
| $100 | 12,000 | $0.0083 |
Discover Escape Rates, Expenses and Fees
Because interest rate charges change so frequently, it’s best to go directly to the Discover Escape site for rate information.
The Discover Escape card has an annual fee of $60. The 25,000 sign-up bonus miles (earned over 25 months) are worth $250, so basically it’s like getting a 4-year suspension of the annual fee. It’s interesting to note that once this 25,000 bonus is used up, you will be better off using the Schwab 2% cashback credit card rather than the Discover Escape card. This is because the Schwab card has no annual fee, and no redemption restrictions related to travel.
The card also charges 2% of the US dollar amount of each purchase made in a foreign country—slightly lower than many other credit cards which charge 3%.
PlasticIQ’s Final Assessment of the Discover Escape Credit Card
The Discover Escape initially has a slight edge over the Schwab Visa cashback card due to the 25,000 bonus miles sign-up offer, but once that offer runs out, you’ll be better off with the Schwab card for sure, as you’ll avoid the $60 annual fee and redemption restrictions that come with the Discover Escape card.
All that said, the Discover Escape card is a first-rate cash back card, and deserves its #1 spot atop the PlasticIQ ranking engine.
July 20th, 2010 at 11:18 pm
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