What is a Discover Card? Everything You Need to Know

The number of different cards available nowadays is astounding. Because of this fact, getting one isn't particularly difficult, but you should be aware that some are significantly more popular than others. If you are looking for a credit card for your wallet with decent rewards and other perks, you have probably come across options from Discover. The credit cards from this company are easy to use and can boast a range of advantages.

Is Discover a good credit card? Keep reading to learn about it as well as its history, how the card works, and its benefits.

What Is a Discover Credit Card?

The first question we should answer in this article is: What is a Discover Card? At the moment, Discover Card is the third-biggest brand of credit cards in the United States. What is more, similarly to Visa and Mastercard, it operates internationally. If you have one of these branded credit cards, you can use it for purchases at the vast majority of stores in 200 countries.

The brand belongs to Discover Financial and has become known among customers for its absence of annual fees and attractive cashback conditions.

Discover Card History: Where It All Started

The history of Discover Card business is an interesting one. It all began in 1985 when retailer Sears decided to introduce their own credit card, not unlike many other retailers who had the same idea. Branded cards became popular during that time, as they offered loyal customers an opportunity to get more benefits at specific stores.

Discover took things further and effectively dealt with competition by completely skipping annual fees and providing a cashback program. In many ways, the latter solution became the basis for the modern cashback opportunities offered by other card issuers.

Because it was originally created as a department store card, it’s not surprising that competitors were quite hesitant to accept it in their outlets. It took a number of years for Discover to establish its leading position among other card networks. Since 2007, it is an independent company that continues to gain customers and introduce new products.

How a Discover Credit Card Works

On the surface, most modern credit cards look very similar. However, if we compare Discover cards to Mastercard or Visa, the basic approach is quite different.

Both Mastercard and Visa are not direct issuers of credit cards, which you can get from different banks. The companies process transactions, yet they are not involved in the decision-making regarding the conditions and benefits of cards. Discover, on the other hand, works completely differently, as the company is the direct issuer of its own credit cards.

Because of the difference in approach, Discover not only charges a processing fee from merchants but also earns income through the interest charged to their users. Another well-known company that works in a similar way is American Express.

Discover Financial is interested in offering attractive conditions to its users and ensuring that merchants accept their cards. For a company that operates in this way, it’s important that the outstanding balance of their customers is sufficient. For this reason, since the beginning of its work, the company has been focused on providing great Discover perks and features to its cardholders.

What Are the Main Discover Card Perks?

Now that you have an idea about the basic principles of Discover cards, let’s talk about Discover credit card benefits. Here are the main features you should know about.

Absence of annual fee

One of the strongest points of Discover credit cards is that none of them have an annual fee. This is a definite advantage compared to many other rewards cards with hefty fees.

Cashback

When you use Discover cards, you get rewards in the form of convenient cash back. Firstly, you get unlimited 1% cashback on any purchases you make, regardless of the category. However, you can activate a rotating 5% cashback on select purchases every quarter.

The 5% cashback applies only to purchases up to $1,500, so when you go over the limit, you will earn the standard 1% cashback. The mentioned cashback conditions are relevant for the following options: Discover it Student Cash Back, Discover it Cash Back, Discover it Gas & Restaurants, and NHL Discover it. What is great about cashback from Discover is that you can withdraw it immediately without having to accumulate a certain sum.

Cashback match

Another exciting bonus feature for a new cardholder is a cashback match. The way it works is that your cashback will be automatically matched by the issuer at the end of the first year.

Discover It Miles

By getting a Discover It Miles card, you can earn travel rewards on your purchases — Miles. When you buy something, you get x1.5 Miles on every dollar of a purchase. What is interesting about this feature is that your earned rewards can be redeemed not only in advance but as statement credit to your account.

Additional reward opportunities

Discover has partnered up with some platforms, such as PayPal and Amazon, so when you earn rewards, you can directly pay with them for your purchase when using these services.

$0 fraud liability guarantee

Another one of the Discover cardholder perks is the presence of fraud protection. With a credit card, you get a $0 fraud liability guarantee, which means that when someone uses your card details to make unauthorized purchases, you won’t be responsible.

Security features

You have an opportunity to activate SSN alerts, so Discover will track online resources and look for any misuse of your Social Security number. For example, if someone uses your number to open a new account, you will be immediately alerted.

To boost your security, Discover allows you to freeze your account whenever you need to, so you can be sure that it cannot be used in fraudulent schemes. This is particularly useful when you lose a card and need to act quickly. Another security feature you can enable in the mobile app is the removal of your personal details from suspicious sites.

Credit monitoring

Once you get a Discover credit card, you will get access to your FICO Score for free, and you can also look up additional credit information. The score can be viewed monthly, so you can make changes if your credit rating is lower than you wish it to be.

Zero-trouble card replacements

Discover ensures that you don’t go without your card for too long. If you inform customer support about a stolen or lost card, a new one will be shipped to you for free overnight. It should arrive at your address in 6 days max, and in the meantime, you can use a digital one, which will be opened right away.

The Bottom Line

Most will agree that the answer to “Are Discover cards good?” is a positive one. It is not an accident that Discover cards are among the most widely used ones in the United States. They provide numerous perks, offer cashback, are accepted internationally in 200 countries, and have sufficient security features. You even get a cashback match at the end of your first year of using the card. All of these benefits summed up make Discover cards such profitable options.

Still, just like with any credit card account, a customer should have a reasonable approach to spending and avoid accumulating debt. It’s easy to avoid paying off the balance before the end of the month, so it’s something to keep in mind.