Why Is Discover Card A Joke In The US | Is Discover a Good Credit Card To Have For College Students?
Visa and Mastercard are the two largest credit card businesses in the world, so it’s no wonder that when most people think of credit cards, they think of these two firms. Regarding purchasing transactions, these two networks account for more than 75% of the global credit card market. Another well-known card network, American Express, comes in slightly under 3%.
While these three companies have long controlled the credit card industry, other, smaller competitors exist. The Discover credit card is one of these names. Although it may not be as well-known as the others, it does provide cardholders some of the same perks and benefits as the others—as well as a few more.
Please continue reading to find out more about Discover and how it functions.
Although Visa and Mastercard dominate the credit card network market, smaller competitors such as Discover have a piece of the pie. In 1986, Discover introduced a credit card with cashback benefits and no annual fees.
Its payback rates are still among the best in the business. Today, the corporation offers eight major credit cards, each with its own rules and prices. Discover has routinely ranked high in customer service and satisfaction among credit card businesses.
Discover Card’s History
Dean Witter Financial Services Group, a Sears company, designed and tested the Discovery card in the mid-1980s. It was first shown to the public in a national commercial campaign during Super Bowl XX in 1986. It was then formally launched the following year.
One of the Discover card’s key goals was to differentiate itself from the competition when the credit card market was becoming saturated. Cardholders had the option of paying no yearly fee, which was unusual at the time.
Discover cardholders were also offered a novel new benefit: cashback incentives, which promised to refund a tiny portion of every purchase amount in cash to their accounts. Consumers may have been drawn to Discover’s cashback offers, but businesses were slow to respond. The card was only recognized by significant airlines, rental car providers, and large companies like Sears.
Agreements with foreign payment networks, such as Japan’s JCB and China’s UnionPay, dramatically extended its use abroad in the mid-2000s. 2 Discover had over 57 million cardholders in 2021, making it the world’s fifth-largest card network.
The company differs from network giants Visa and Mastercard because it does not issue its products through banks or financial institutions. Discover, like American Express, is an independent issuer and network.
Discover Bank, a subsidiary of Discover Financial Services, issues cards. Discover Bank was founded through a series of acquisitions and reorganizations. 62
What Benefits Does the Discover Card Provide?
The Discover “it” card (along with a business credit card) was rebranded in 2013, and it now comes in seven primary varieties:
- The flagship Cash Back card
- Gas and Restuarants
- Student Cash Back
- Student Chrome
The card still has no annual and foreign transaction fees, staying loyal to its roots. Discover will not charge a late fee for the first missed or late payment. 9 A free FICO score is included with each of your monthly statements. You are not liable for fraudulent transactions, as you are with all credit cards.
The features of each card differ. The Discover Cash Back card’s main benefit is a 5% cashback incentive for specific categories that change throughout the year. For the first year, it also guarantees to match all cash back at the end of the year.
For the first 14 months, purchases and balance transfers on the flagship Cash Back, Gas & Restaurants, and NHL cards offer an introductory 0% annual rate (APR). The initial 0% APR for student cards is only valid for six months and only applies to purchases.
The company’s customer service is also a strength. Customers can access Discover’s customer support representatives by phone or online anytime. In its 2021 U.S. Credit Card Satisfaction Study, J.D. Power rated Discover second in overall customer satisfaction, behind American Express, followed by Capital One.
Discover Bank now operates in the same way as an online bank, offering traditional financial services in addition to credit. Checking and savings accounts, certificates of deposit (CDs), bill pay, and other benefits are available. Discover has 60,000 no-fee ATMs across the United States where customers can get cash. 131415 Discover Card Rewards Discover credit card rewards are different based on the card.
For example, with the Cash Back card, you can receive 5% cash back on categories that change quarterly, such as gas, grocery shops, and Amazon. In addition, you will receive 1% cashback on all other transactions. Cashback is non-expiring and can be deposited into your bank account, applied to your Discover card balance, or spent at Amazon or Paypal checkout.
For up to five years, the Student Cash Back and Student Chrome cards offer 5% and 2% cashback, as well as a $20 statement credit, for achieving a GPA of 3.0 or above for the year. Discover will additionally match the cashback rewards you earn over the first 12 months you hold your card on the Cash Back, Student and Student Chrome, and Secured cards.
You’ll earn 1.5 miles for every dollar you spend on the Travel Card, and your miles will be matched mile for a mile in the first year of card ownership. The Business card gives you a 1.5 % return on all transactions, with no spending limit. In addition to earning rewards with the NHL card, you’ll save 10% when you shop at NHLShop.com and get a discount on an NHL TV subscription if you pay with your card.
Discover Card Annual %age Rate (APR) The terms of your Discover card, like all credit cards, are determined by your credit score. Customers with poor credit may be offered an APR of 22.99 % on non-student cards, while those with excellent credit may be offered an APR of 11.99 %.
On purchases, the student cards offer a 0% APR for the first six months, after which the APR ranges from 12.99 % to 21.99 %. For all cards, the APR for cash advances is 24.99 %, with a fee of $10 or 5% of the amount borrowed, whichever is greater.
Although transferring a balance has a 0% APR introductory rate, you will be charged a 3% fee for each transfer, which is typical for most credit cards.
Even though other cards have gotten on the cashback bandwagon, Discover’s 5% cashback benefit remains one of the most generous, as does the company’s matching policy. You must, however, maintain a note of the eligible categories for each quarter, unlike with some other cards.
There’s also a limit on how much you can spend each quarter and still receive rewards—currently $1,500. All other purchases will earn you 1%.
Discover debuted in 1986 as a customer-friendly credit card choice. It still has similar characteristics, but the advantages that set it apart years ago are now fairly standard in the industry.
Before applying, read the terms on each of the cards carefully. Two cards may appear identical, but their words are vastly different. Aside from the 5 % cash back cards, there are 1.5 % to 2 % reward cards (Business, Gas & Restaurants, Secured, Student Chrome).
If you get a postal offer, compare it to what’s available on the Discover website. Suppose you have a balance on your card regularly. In that case, the benefits may not be enough to offset the interest payments, especially if you end up with one of the higher interest rates.