JFE--here is my understanding of the UP credit card. It pays 1%. periodically that money is swept into your 529 plan, where it earns interest tax free. I believe this occurs quarterly, which is better than Discover's annual payment. Second, Discover pays much less than 1% until you hit $10,000 in a single year.
1% in cash is pretty good, especially if you can earn interest on it. If only you could earn interest on your milage balances.