Is Discover A Good Credit Card: Pros & Cons

Everyone knows Visa and Mastercard, right? And what about Discover? Initially issued by Sears in 1985, Discover boasted lower fees and was by far the first to initiate cashback on purchases. Today, Discover is a well-known independent financial services company that competes with the major players in the credit card industry.

Discover offers a variety of credit cards, each designed to cater to different financial needs and spending habits. From cashback and travel rewards to student cards and secured credit cards, the company provides options for a wide range of consumers. Yet, is Discover a good credit card?

Like any financial product, Discover credit cards come with their own set of advantages and disadvantages. With those in mind, you can decide whether this card aligns with your financial goals and lifestyle.

Discover Credit Card Advantages

Though less popular than Visa, Mastercard, and American Express, Discover cards don’t lag behind when it comes to perks, rewards, and goodies that make consumers prioritize some cards over others. There are many benefits of credit cards from Discover that get customers hooked and convert them to loyal clients. Let’s look into the most outstanding Discover credit card perks in more detail.

No Annual Fee

While other card issuers tend to offer free-of-charge use for only some of their products and often offset this discount with a higher interest rate or other charges, Discover makes this option available for all its credit cards. It’s a big plus, especially when combined with other valuable perks.

Lucrative Cashback

A pioneer in cashback programs, Discover still excels in this field. A generous reward system is one of the biggest Discover credit card benefits. All credit cards on the list feature attractive cash bonuses, including:

• Unlimited 1% cash back on all purchases, whatever the card type or the amount of spending.
• Unlimited Cashback Match for first-time cardholders. At the end of your first year as a cardholder, Discover matches all the cashback you’ve earned, automatically doubling your rewards, with no limits on the amount to match.
• 5% cashback on rotating quarterly categories such as groceries, gas stations, restaurants, and online shopping, up to the quarterly maximum after activation. This option is available for Discover it® Cash Back and Student Cash Back credit cards.
• 2% cash bonus on gas stations and restaurants costs up to $1,000 in combined purchases each quarter for Discover it® Secured and Student Chrome credit cards. 

Introductory APR Offers

The company frequently offers 0% introductory APR on purchases and balance transfers for an extended term from 6 to 15 months. This feature can be especially beneficial for those looking to finance a large purchase or consolidate existing debt without accruing interest during the promotional period.

No Foreign Transaction Fees

Discover credit cards do not charge foreign transaction fees, making them a cost-effective option for international travelers. This benefit can result in significant savings on purchases made abroad.

Flexible Redemption Options

You can redeem your Discover rewards for statement credits, direct deposits, gift cards, and even charitable donations. Additionally, you can use your cashback at Amazon directly during checkout.

Security Features

On guard for cardholder protection, Discover offers a range of security features:

• Zero Liability ensures you are not responsible for unauthorized purchases.
• Freeze it® allows you to instantly freeze your account through the mobile app if you misplace your card.
• Identity Alerts inform you if your Social Security number or other personal info is found on any of thousands of risky websites.

Free FICO® Score

By completing a Discover pre-approval form, you can find out your current FICO score and what Discover credit cards you qualify for, with no impact on your credit since it’s not a hard pull. It’s one of the Discover card benefits that will be appreciated by customers who are not sure about their credit rating.

Discover Credit Card Drawbacks

The great benefits of Discover credit cards are hard to argue. However, there are a few cons of credit cards from this issuer company that you should be aware of.

Limited International Acceptance

While the pros of credit cards from Discover are widely acceptable in the US, global acceptance of Discover cards still lags behind Visa and Mastercard.

Higher Fees

Despite attractive introductory APRs and 0% annual fees, you should be ready to face interest rates and balance transfer fees that stand at the higher end of the price range. Thus, when the introduction period is over, the APRs will linger around 28%, and the balance transfer fee will hit a 5% mark, which is a tangible cost for larger transfer amounts.

Rotating Cashback Categories

The 5% cash-back rewards are limited to rotating quarterly categories. Cardholders need to activate the categories each quarter and adjust their spending to maximize rewards, which might be cumbersome and inconvenient.

Lower Cash Back Caps

The 5% cashback is capped at a certain spending limit (usually $1,500 per quarter), after which the rewards rate drops to 1%. And the 2% cashback on gas station and restaurant expenses is limited to $1,000 only in combined quarterly purchases.