Discover Cashback Debit Review: Earn Cashback Without a Credit Card

If you don’t carry a large balance in your checking account and want to earn cashback rewards on your purchases without using a credit card, you might be interested in the Discover Cashback Debit.

This account is fee-free and pays you back 1% on all purchases (up to $3,000 a month), without a minimum balance to qualify for rewards. 

Although 1% isn’t a huge amount in rewards compared to some credit card offerings, the Discover Cashback Debit offers other attractive features in addition to its straightforward, easy-to-use cashback rewards.

Quick Facts: Discover Cashback Debit

  • Rewards rate: 1% cashback on purchases up to $3,000 each month (earn a maximum of $360 annually)
  • Minimum account balance: None
  • Minimum initial deposit: None
  • Account fees: None
  • Perks: Early Pay, free overdraft protection

. . .

Overview of the Discover Cashback Debit

The Discover Cashback Debit is a basic rewards account that allows you to earn a flat 1% cashback rate on all purchases, up to a maximum of $3,000 each month.

While the Discover Cashback Debit account doesn’t pay you interest on your balance, it also doesn’t require a minimum initial deposit or minimum balance to stay open and earn the 1% cashback incentive. 

There are also no fees for monthly maintenance, non-sufficient funds (NSF), overdrafts, or stop-payment instances. However, there are fees for outgoing wire transfers and there’s no reimbursement for out-of-network ATM fees.

The Discover Cashback Debit offers Early Pay to let you receive your paycheck up to two days early. You can also send and receive money via Zelle and pair your Discover Cashback Debit with Apple Pay on your wallet app.

There's also a nice security feature through the Discover app. The Online Privacy Protection program will scan websites (at least 10) every 90 days for your personal data. Then it uses the results to help you send opt-out requests to get your information removed.

If you lose your card or are concerned about your account security, you can freeze your Discover Cashback Debit card so no one can make purchases or make ATM withdrawals. 

The Discover Cashback Debit account is FDIC-insured up to the maximum legal amount.

Pros

  • 1% cashback reward rate on spending (max $360 in rewards per year)
  • Get paychecks via direct deposit up to two days early
  • No monthly fees, NSF fees, or other account-related fees
  • No minimum balance to earn 1% cashback 
  • Over 60,000 fee-free ATMs nationwide

Cons

  • No interest earned on account balance 
  • Cap of $360 on cashback earnings
  • Out-of-network ATM fees are not reimbursed 
  • Daily ATM withdrawal limit is $2,000
  • No physical branches

Get started with the Discover Cashback Debit.

How To Earn Cashback Rewards With the Discover Cashback Debit

The Discover Cashback Debit account is straightforward, paying you back 1% on debit card purchases, up to $3,000 per month — so if you spend the maximum each month, you'll receive $30 back per month, or up to $360 per year.

Most of your typical purchases will likely qualify — however, certain types of transactions aren’t eligible for the cashback bonus:

  • ATM transactions
  • Buying money orders or other cash equivalents
  • Extra cash received on point-of-sale transactions
  • Peer-to-peer (P2P) payments like Apple Pay Cash
  • Internet gambling
  • Online sports betting
  • Loan payments
  • Account funding using the debit card

If you frequently use third-party platforms for payment, like Venmo or PayPal, those purchases are not necessarily going to earn you the 1% cashback. 

Get started with the Discover Cashback Debit.

Discover Cashback Debit Fees

This is one of the account’s top selling points: there really aren’t any fees like you might encounter with other cashback credit cards or checking accounts.

With the Discover Cashback Debit, there are no:

  • Monthly service charges
  • Fees for not meeting the minimum balance (there isn’t a minimum balance)
  • Non-sufficient fund (NSF) fees
  • Fees at in-network ATMs (over 60,000 nationwide)

However, there are a couple of costs you should be aware of. If you send outgoing wire transfers from your Discover bank account, you’ll be charged $30 each time. 

Although it’s not a fee that Discover charges, you may need to pay fees to use out-of-network ATMs. Check Discover's handy ATM finder before opening an account to verify that there are convenient ATMs near you. 

Who Should Get the Discover Cashback Debit?

If you like to use debit cards frequently and don’t expect to hold a high account balance, this checking account is a great choice. A cashback account makes sense for a lower account balance since you won’t be missing out on interest you could potentially earn with a higher balance in a high-yield checking account. 

Also, the Discover Cashback Debit may be perfect if you prefer to avoid credit cards. Sticking to a debit card can help you avoid racking up high-interest debt — and this one even pays you back for your spending. Plus, the rewards cap on spending each month can actually be a perk, as unlimited rewards might tempt you to spend unnecessarily to earn more in rewards. 

You also won’t have to worry about overdraft fees when your cash flow isn't great. 

Get started with the Discover Cashback Debit account.

Who Shouldn’t Get the Discover Cashback Debit?

If you tend to keep a higher account balance (say, $3,000 versus $500 at any given time), a high-yield checking account could be a better choice, since you won't earn any interest with a Discover Cashback Debit account. 

You also need to be willing to use your debit card to benefit from the cashback rewards. If you don’t have many expenses to put on a debit card, this one isn’t going to offer you a lot in return. 

Finally, if you need to build your credit, the Discover Cashback Debit won’t fit the bill. You’ll want a credit card (or secured credit card) to build your credit history. 

Alternatives to the Discover Cashback Debit

If you’re not sure about the Discover Cashback Debit just yet, there are some alternative checking accounts out there that also offer rewards and low fees. 

Discover Cashback Debit vs. American Express Rewards Checking

American Express Rewards Checking

A good alternative to the Discover Cashback Debit may be the American Express Rewards Checking. This online checking account comes with no fees to open the account and no monthly fees, and rewards you with Membership Rewards points on eligible purchases and a 1.00% APY on your balance. 

You'll earn 1 point for every $2 in eligible purchases and redeem your points as deposits for the equivalent cash into your Amex Rewards Checking account. You’ll also get unlimited fee-free ATM withdrawals at over 37,000 MoneyPass® ATMs across the country.

The big downside is that you must be a member who has held a U.S. Basic Consumer Card from American Express National Bank for at least three months.

Discover Cashback Debit vs. Axos Bank CashBack Checking

Axos logo

Like the Discover Cashback Debit, Axos Bank’s CashBack Checking account offers 1% cashback on purchases with zero maintenance fees. 

The Axos Bank CashBack Checking has some drawbacks, however. There’s a minimum $50 deposit to open your account and a fairly hefty minimum average daily balance of $1,500 to earn the rewards. Plus, you only earn the cashback rewards on signature-based transactions. 

Axos says you can earn up to $2,000 in cashback per month, so in that way, it outperforms the Discover Cashback Debit account (although that means you'd be spending $200,000 in a month!). And while it doesn’t have free ATMs like Discover, Axos reimburses all ATM fees. 

Discover Cashback Debit vs. Extra Card (Rewards + Credit Building)

Extra Card

If you are hoping to improve your credit score, the Extra Card, with its Rewards + Credit Building plan, may be worth a look. 

Instead of cash, the Extra Card rewards you for purchases with up to 1% back in points. Unfortunately, the points are only redeemable in the Extra rewards store, so check what types of products are available (the company mentions Apple AirPods as one option). 

The greater perk of the Extra Card is the chance to rebuild or improve your credit score, since they report your transactions to Experian and Equifax. However, it works like a debit card, paying for transactions upfront and then pulling the money from your linked account the next day. 

Unlike the Discover Cashback Debit account, the Extra Card isn’t free. You’ll pay $199 a year or, if you just want credit building, it’s $149 per year.

Final Thoughts

If you like the idea of earning cashback but don't want to use a credit card, the Discover Cashback Debit may be a good option. With minimal fees, no minimum balance requirements, and an easy-to-understand cashback structure, it's a good way to earn cashback on money you're spending anyway.


Disclosure: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.

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I'm an award-winning lawyer and personal finance expert featured in Inc. Magazine, CNBC, the Today Show, Business Insider and more. My mission is to make personal finance accessible for everyone. As the largest financial influencer in the world, I'm connected to a community of over 20 million followers across TikTok, Instagram, YouTube, Facebook and Twitter. I'm also the host of the podcast Erika Taught Me. You might recognize me from my viral tagline, "I read the fine print so you don't have to!"

I'm a graduate of Georgetown Law, where I founded the Georgetown Law Entrepreneurship Club, and the University of Notre Dame. I discovered my passion for personal finance after realizing I was drowning in over $200,000 of student debt and needed to take action-ultimately paying off my student loans in under 2 years. I then spent years as a corporate lawyer representing Fortune 500 companies, but I quit because I realized I wanted to have an impact; I wanted to help real people and teach them that you can create a financial future for yourself.

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Advertiser Disclosure

Our aim is to help you make financial decisions with confidence through our objective article content and reviews. Erika.com is part of an affiliate sales network and receives compensation for sending traffic to partner sites, such as MileValue.com. This compensation may impact how and where links appear on this site. This site does not include all financial companies or all available financial offers. This in no way affects our recommendations or article content.

Advertiser Disclosure

Our aim is to help you make financial decisions with confidence through our objective article content and reviews. Erika.com is part of an affiliate sales network and receives compensation for sending traffic to partner sites, such as MileValue.com. This compensation may impact how and where links appear on this site. This site does not include all financial companies or all available financial offers. This in no way affects our recommendations or article content.