The best Discover credit cards are also among the best credit cards, period. In addition to being a provider of eight different Discover it® credit cards, Discover is also a payment network, a dual role that’s also true of American Express.
If you are looking for a good credit card with no annual fees and some unique benefits, a card from Discover may tick all your boxes.
1. What is Discover Bank?
Discover Bank, a division of Discover Financial Services, is both an online bank with more than 60,000 ATMs and the issuer of Discover credit and debit cards. The streamlined Discover Bank offers checking, savings, and money market accounts, as well as certificates of deposit and IRAs.
Discover Bank has roots going back to the 1911 founding of Greenwood Trust Company. It became part of Discover Financial Services in 1985 and received its current name in 2000.
The Discover Bank payment network processes transactions from approximately 9 million U.S. merchants, matching the reach of Visa and Mastercard while exceeding that of American Express by 3 million.
Because Discover Bank is both a card network and card issuer, its cards do not partner with outside banks.
2. How Does a Discover Credit Card Work?
There really isn’t anything surprising in how Discover credit cards work — if you’ve ever owned a credit card, you’ll understand how to use your Discover card.
Discover offers cards to consumers of all credit types, from poor to excellent. If your application is accepted, you’ll receive your plastic card in about a week, and you can start using it after you activate it online or over the phone.
An unsecured Discover card will have a credit limit based on your creditworthiness. Discover also offers a secured card in which the credit limit is equal to your cash deposit. You can charge purchases on your Discover card up to the credit limit without incurring any interest charges if you pay your entire balance by the next monthly payment date.
If you wish, you can stretch out your payments over multiple billing cycles as long as you make the minimum payment each month. You’ll be charged interest on your unpaid balances at the annual percentage rate (APR, which is based on the Prime Rate) you were given when the card was issued.
All Discover cards report your payment activity to the three credit bureaus (Experian, TransUnion, and Equifax). Your credit score depends on whether you pay your bills on time and control your use of credit.
Most credit scores are eligible for a Discover card, but the APR and credit limit will depend on your score.
3. Is Discover Card a Good Credit Card?
We’ve always liked the credit cards issued by Discover due to their competitive APRs, low fees, solid benefits, and a variety of reward schemes. Discover cards are structurally sound, with wide acceptance, no annual fees, 25-day grace periods, no penalty APRs, and no penalty fee on the first time you miss a payment date.
Core features found on Discover cards include Cashback Match® (described below), cash advances, balance transfers, and free overnight card replacement. The Freeze it® feature allows you to lock your card against new purchases, balance transfers, and cash advances while allowing recurring bills and other selected activities to continue.
You’ll also have free access to your FICO Score from TransUnion, and free identity alerts informing you about new inquiries, new accounts, and Dark Web activity.
On the minus side, Discover cards do not offer signup bonus cash rewards. However, they do offer new cardmembers an introductory 0% APR promotion on purchases (and possibly balance transfers, where fees apply) after opening the account.
All cards provide a preapproval check that won’t impact your credit score.
4. What Kind of Rewards Do Discover Cards Offer?
A Discover credit card offer for cash back is structured as a flat, tiered, or rotating reward scheme. Unless stipulated otherwise, Discover cards offer Cashback Match® that doubles the cash back you earn for the first year.
The following are the rewards offered by each card:
- Discover it® Cash Back: You earn bonus cash back upon activation in quarterly rotating categories of merchants on purchases up to the quarterly maximum. You earn unlimited 1% cash back on all other everyday purchases. An introductory 0% APR offer may apply to purchases and/or balance transfers.
- Discover it® Miles: Provides a flat reward of miles on all purchases. You get an unlimited Miles-for-Miles match that automatically matches all the miles you earned at the end of the first year. You can redeem your miles for travel or cash, and miles never expire. An introductory 0% APR offer may apply to purchases and/or balance transfers.
- Discover it® chrome: A tiered cash back card offering bonus cash back on up to $1,000 in combined quarterly purchases at restaurants and gas stations. Everyday purchases earn unlimited 1% cash back. An introductory 0% APR offer may apply to purchases and/or balance transfers.
- Discover it® Secured Credit Card: Your credit limit is equal to the refundable security deposit you make. The card provides bonus cash back on up to $1,000 in combined quarterly purchases at restaurants and gas stations. All other purchases earn unlimited 1% cash back. There is no introductory 0% APR promotion with this card.
- Discover it® Student Cash Back: You get bonus cash back after activation in merchant categories that rotate quarterly, up to the quarterly maximum. All other purchases earn unlimited 1% cash back. With the Good Grades Reward, students can earn a statement credit each year (for up to five years) to reward a GPA of 3.0 or higher for the year. The introductory 0% APR promotion on purchases runs for a minimum period of six months.
- Discover it® Student chrome: You earn bonus cash back on up to $1,000 in combined quarterly purchases at gas stations and restaurants. All other purchases earn unlimited 1% cash back. The card provides the annual Good Grades Reward. A new cardholder also gets a minimum six-month introductory 0% APR promotion on purchases.
- NHL Discover it® Credit Card: Co-branded card offering bonus cash back up to the quarterly maximum after activation at different merchant categories that rotate each quarter. All other purchases earn unlimited 1% cash back. An introductory 0% APR offer may apply to purchases and/or balance transfers.
- Discover it® Business Credit Card: Earns flat-rate cash back on all purchases. An introductory 0% APR offer may apply to purchases and/or balance transfers. You can add employee cards for free and earn rewards for all their purchases.
to verify rewards and restrictions. You may also find special promotions, including fee discounts or waivers, available until a specified expiration date.
5. What Can I Redeem My Rewards For?
Your Discover miles or cash rewards never expire and are redeemable in any amount. Cash back rewards can be redeemed in several ways:
- An electronic deposit to your bank account.
- A statement credit to your card account.
- A donation to select charities.
- Gift card or instant eCerifiicate from partnering merchants, starting at $5.
- Purchases at Amazon.com.
- Transfers to PayPal to pay for purchases.
The Discover it® Miles card pays rewards in miles. You can convert the miles to cash at the rate of 100 miles = $1.00 and redeem the cash as described above for cash back cards.
You can also apply your miles for a travel purchase credit on your statement made within the last 180 days. Travel purchases include:
- Car rentals
- Charter/tour bus lines
- Commercial airline tickets
- Hotel rooms
- Local and suburban commuter transportation, including ferries and passenger railways
- Taxicabs and limousines
- Tour operators
- Vacation packages purchased through airlines, travel agents, and online travel sites
You earn rewards on purchases only, excluding balance transfers, cash advances, and illegal transactions. You also don’t earn rewards when you get a cash advance at the checkout line at selected merchants. You’ll automatically receive your rewards balance if you close your account or don’t use it for 18 months.
6. How Does the Discover Cashback Match® Work?
Discover cards are famous for their Cashback Match® feature. It pays you $1 for each $1 you earned in cash back rewards during the first 365 days (or 12 consecutive billing cycles, whichever is less) after opening the account. In effect, you get double rewards for the first year.
The matching cash will be rewarded within two billing periods after the end of the first year. The 365-day limit on matches applies to when cash back is processed, not the transaction date.
There are no minimum or maximum spending limits to earn the Cashback Match, but you will forfeit your Match if you close your account before your card’s one-year anniversary.
You can redeem cash back at any time without affecting your Cashback Match. Visit Discover’s Cashback Summary page to track how much cash back you’ve earned. You must be a new cardholder to qualify for Cashback Match.
Strategically, a great time to get a new Discover card is when you buy your first home. You are likely to spend oodles of money on appliances, storage, decorating, landscaping, and other home-related purchases during the first year. By paying with your Discover card, you can earn a hefty Cashback Match that will reduce the overall expense of your first year of homeownership.
7. Which Discover Credit Card is the Best?
The best Discover credit card is the one that best matches your lifestyle. They all offer Cashback Match (or Mile-for-Mile Match), and no annual fee, among other perks.
The Discover it® Cash Back is a good choice for many consumers. You can get bonus cash back in rotating quarterly merchant categories — up to the quarterly purchase limit — when you activate the bonus category each quarter.
Doing a little math, during the first year you can earn 5% x $1,500 per quarter x 4 quarters per year x 2 (for Cashback Match). That’s $600 cash back, plus whatever else you earn on 1% non-bonus purchases.
If you spend $20,000 on the Discover it® Cash Back card during the first year of which $6,000 earns 5% cash back and $14,000 earns 1%, you can earn ($600 + (1% x $14,000 x 2 for Cashback Match)), or $880 in first-year cash back.
Before selecting this card, consider whether you want to deal with the quarterly rotating merchant category scheme. To extract maximum value, you need to activate the new category each quarter and plan your spending to maximize your benefit from the current category. If you forget to activate the quarterly category or fail to spend the limit, you’ll earn less than the maximum possible.
A simpler choice is the Discover it® chrome since it offers a lesser reward rate on gas stations and restaurant spending. Naturally, if you don’t drive much or regularly dine out, this card may not be a good choice.
You may prefer the Discover it® Miles card if you regularly travel and want to accumulate travel rewards. You can use the miles you earn on purchases with this card to pay for travel-related expenses, including plane tickets, hotel stays, car rentals, and dining out.
You can also convert the miles to cash if you prefer. If you spend $20,000 to earn 30,000 miles and convert them to cash, your first-year reward would be 30,000 miles x ($1 per 100 miles) x 2 for Cashback Match = $600 cash back earned in Year One.
While that’s $280 less than the Discover it® Cash Back example, you don’t have to track or activate quarterly categories or worry about purchase limits. You can relax knowing that the Discover it® Miles card rewards you equally for all your purchases.
If you are a student, Discover beats most of its competitors by offering not one student credit card, but two. Folks who have no or bad credit are best served by the Discover it® Secured Credit Card that is available to just about anyone who can afford a security deposit.
8. Is it Hard to Get a Discover Credit Card?
Discover’s credit cards approve consumers with FICO scores in the 550 (bad credit) to 850 (excellent credit) range. In other words, most folks can qualify for an unsecured Discover card and those that don’t can easily obtain the Discover it® Secured Credit Card.
You can apply for a Discover credit card by calling 1-800-DISCOVER (347-2683) or online through the Apply Now links above that will direct you to Discover’s website.
9. Which Discover Card is the Easiest to Get?
Generally, secured credit cards are the easiest to obtain, and the Discover it® Secured Credit Card is no exception. With this card, you can build or rebuild your credit with responsible use. The key to its availability is the security deposit you make to collateralize the card’s credit limit.
The amount you deposit must equal your credit limit. The approved limit can be as high as $2,500 and hinges on your income and ability to pay. The deposit, less any unpaid balance, is refundable within two billing cycles plus 10 days when you close your account or upgrade to an unsecured Discover card.
The card reports your credit history to each major U.S. credit bureau. This gives you the opportunity to exhibit creditworthy behavior — that is, paying your bills on time and controlling the amount of credit you use.
A credit bureau may take up to six months to respond to your reported payment activity, but eventually, good behavior will be rewarded with higher scores.
Discover automatically evaluates your secured account every month. After eight months, Discover will see whether you can upgrade to an unsecured card by responsibly using your credit over time. This makes it important for you to avoid late payments, delinquencies, collections, and other derogatory activities for your credit cards and loans.
A student card is also easy to obtain and Discover offers a pair (see below).
10. Which FICO Score Does Discover Use?
FICO from the Fair Isaac Company dominates the credit score market, and it is used by 90% of top lenders. FICO publishes several different scoring models, but the one used by almost every credit card issuer or bank advertiser is FICO Score 8 with a score range of 300 to 850.
The three credit bureaus implement FICO Score 8, but the results need not be identical because of variations in the data available to each bureau. Discover provides cardmembers free access to their FICO Score 8 from TransUnion. The score Discover provides represents a monthly snapshot, so always note the as-of date when you access your score.
The FICO Score 8 system calculates your score using five credit-related factors. Each factor comprises a percentage of your total score, as follows:
Other scoring systems use different schemes to calculate your credit score.
11. Which Discover Card is Best for Business Owners?
Business owners may do best with the Discover it® Business Credit Card. It offers cash back on every purchase plus special benefits that help managers run their businesses.
You can get up to 50 free employee cards and customize each employee’s spending limits while reaping the rewards on their purchases.
In addition, this business card lets you download your transactions to QuickBooks, Quicken, and Excel to help manage your back office. Moreover, the Discover mobile app helps you do business anywhere.
12. Which Discover Card is Best for Students?
Discover has a pair of student credit cards that are offered to students who typically have little or no credit history. The Discover student cards offer cash back rewards, charge no annual fee, award Good Grade Rewards for high GPAs, and help you build your credit history.
Your choice between the two student cards rests on which rewards scheme you prefer:
- Discover it® Student Cash Back: This card has a more complex and more generous reward scheme. It uses a quarterly rotating set of merchants at which you receive bonus cash back on purchases up to the quarterly spending limit. You must activate the card each quarter to receive the bonus cash back, and all other purchases earn 1%.
- Discover it® Student chrome: This card offers bonus cash back on purchases at restaurants and gas stations, and 1% on all other purchases. The bonus cash back is capped each quarter. Unlike its sibling card, this one offers introductory 0% APR promotional financing on purchases made by new cardmembers during the first six months after opening the account.
A math example reveals the difference in each card’s potential rewards.
Assume you are a student who spends $10,000 during the first year of card ownership and maxes out the higher reward levels. In other words, $4,000 in purchases receive the bonus cash reward rate and $6,000 earn the standard 1% cash back. At the end of the first year, you receive a Cashback Match equal to your cash back earnings that have been processed for the year.
The Discover it® Student Cash Back card would pay cash back equal to 2 x ((5% x $4,000) + (1% x $6,000)) = $520 cash back.
The Discover it® Student chrome card would earn you 2 x ((2% x $4,000) + (1% x 6,000)) = $280, which is $240 less than the reward from its sibling card.
The Discover it® Student Cash Back card offers a larger reward, but you’ve got to work to get it. Specifically, you have to activate the card each quarter and make at least $1,000 in purchases from merchants in the current cashback bonus category to receive the maximum amount of cash back.
The Discover it® Student chrome requires no quarterly activations but requires you to spend $1,000 each quarter at restaurants and gas stations to max out your rewards.
Only the chrome card offers 0% APR on purchases during the first six months. That may interest you if you plan some big-ticket purchases when you receive your card, but the interest you would save would probably be insufficient to overcome the chrome card’s lesser rewards.
13. Does Discover Allow Balance Transfers?
allow you to consolidate the balances from two or more credit cards onto a single card. All Discover cards do indeed permit balance transfers and several cards offer introductory 0% APR promotional financing to new cardmembers for balance transfers.
However, the 0% APR promotion isn’t available from Discover it® Miles, Discover it® Secured Credit Card, Discover it® Student Cash Back, Discover it® Student chrome, and Discover it® Business Credit Card. Some of these cards may offer temporary discounts on the APR and fees for balance transfers during an initial promotion period.
With a Discover card balance transfer, you instruct a Discover representative to transfer the balances from your other credit cards. Alternatively, you can submit a balance transfer application online.
Either way, each transfer will usually take one to two weeks and will incur a one-time fee. You can transfer only up to your card’s credit limit minus any outstanding balance. The reasons to transfer credit card balances include:
- Save money: You save money on interest when you transfer balances to a credit card with a lower APR. The benefit is maximized when you transfer to a credit card with a 0% APR promotion on balance transfers.
- Faster debt payoff: You can speed up debt repayment by saving on a lower APR and by avoiding multiple minimum payments when you have balances on multiple cards. You can instead concentrate on paying off the one card holding the transferred balances.
- Easier scheduling: After you consolidate your credit card balances, you have only one card payment to make each month assuming you leave the other cards dormant. This makes it much easier to avoid overlooking a payment and triggering penalties.
If you do go through with a balance transfer, consider how you can stay out of debt during the process. You can start by curbing spending so you don’t accumulate more debt as you pay down your transferred balances. It’s helpful to choose a card with a 0% APR promotion period of at least 12 months so that you have enough time to pay off your balance.
It’s not a good idea to string together multiple cards offering 0% APR promotions. Doing so will cost you extra fees and reduce your motivation to pay off your balance quickly. While you should avoid using your old cards when paying down your balance, don’t cancel the old cards, since that increases your credit utilization and hurts your credit score.
14. How Can I Increase My Discover Credit Limit?
If you find yourself in a good financial position, a higher credit limit may be a worthwhile idea. A higher limit lets you make bigger purchases on a single card. It also has the potential to provide bigger cash advances if you face a financial emergency.
Discover offers several ways to get a higher credit limit:
- Phone: By calling 1-800-347-2683 and speaking to a customer representative.
- Online: Log onto your account at the Discover website and complete the request form.
- Get a new card: If you are using an old Discover card with a low credit limit, your credit history may allow you to obtain another Discover card with higher limits. This is especially true if you have a student or secured Discovery card.
- Be patient: Discover may reward you for exemplary credit habits by offering you a credit limit increase without a request from you.
If you need to negotiate a higher limit with a customer rep, discuss why you earned it rather than why you need it. Point out things like a higher salary, lower fixed costs, a second job, and your history of on-time payments.
15. Is Discover Better than Visa?
“Better” is a loaded term. We can certainly state that the Discover payments network is different from Visa’s in that Discover issues credit cards and Visa doesn’t. When you get a Discover card, the issuer is Discover Bank, and the payment network is Discover Financial Services.
Visa is simply a payments network. It works with outside banks and credit unions that issue their own credit card products that operate on the Visa network.
Comparing Discover to Visa reveals that they both are accepted by about 9 million merchants in the United States. They also charge similar processing fees to merchants. Discover stands out because of its first-year Cashback Match and its low costs. Of course, many different cards bear the Visa logo and thereby offer much greater variety than the eight available Discover cards.
16. What’s Better, Discover it® Cash Back or Chase Freedom?
The Discover it® Cash Back is Discover’s top cash back card. Like all Discover cards, it charges no annual fee.
The Chase Freedom cards — Chase Freedom Unlimited® and Chase Freedom Flex℠ — are Chase’s top cash back cards with no annual fee. Thus, all these cards are competitive with each other and deserve consideration.
The Chase Freedom Flex℠ is closer to the Discover it® Cash Back because both offer quarterly rotating cashback bonus categories. However, the Flex card also offers elevated, limited rewards in a number of fixed categories, a feature lacking from the Discover card.
Only the Chase card offers a signup bonus when you spend a set amount in the first three months after opening the account. Both offer similar introductory 0% APRs on purchases when new cardmembers open their accounts.
The Discover card is alone in offering a Cashback Match that doubles the cash back you earn during the first year after account opening. The Discover card also has a few unique advantages, including:
- No penalty APR for late payments.
- No late fees on your first late payment.
- No foreign transaction fee.
- Free alerts if your Social Security number is detected on the dark web.
- Free FICO scores from TransUnion.
These cards are all winners, and you won’t be making a mistake whichever one you select. Of course, nothing prevents you from having both Discover and Chase cards at the same time.
17. How Many Discover Cards Can You Have?
We discussed earlier the relative ease in qualifying for a Discover card. However, you may not be approved for reasons other than your creditworthiness.
Discover limits you to owning no more than two of its cards at any one time. You must own your first Discover card for a year before applying for the second card.
This is a simple, albeit strict, cap on the number of Discover cards you can own at any one time. Chase, the most popular credit card issuer, has its 5/24 Rule, which prevents you from getting a new Chase card when you’ve opened five or more new credit accounts within the past two years.
Other credit card companies also place limits on card ownership. Citi, the issuer of the Citi Double Cash Card, makes you wait eight days to apply for a second personal credit card, 65 days for a third personal credit card, and 95 days for a Citi business card.
The American Express 4/4 Rule prevents you from having more than four charge cards and four credit cards. Capital One allows you to own no more than two of its credit cards at the same time. Doubtlessly, other credit card companies impose their own arbitrary ownership rules.
18. Does Discover Give Instant Approval?
Discover has a preapproval process that will get you an answer in just a few minutes. Pre-approval doesn’t require a hard inquiry on your credit report and therefore won’t hurt your credit score, so there’s no harm in checking. If not pre-approved, you save yourself from a hard inquiry that lowers your credit score.
To start the preapproval process, fill out the online form and select a customized pre-approved credit card offer. If pre-approved, add any other information required to receive final approval. Bear in mind: Discovery states that pre-approval does not guarantee final approval.
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