Best Discover Credit Cards

Discover Bank is a financial institution that offers a variety of products, such as mortgages, home equity loans, personal loans and student loans. The bank has something for just about everyone, and it’s the perfect option if you’re looking to acquire all your financial products from a single source.

Discover is also widely known for its selection of personal credit cards. So if you’re searching for a new credit card, the bank may have a product that suits you’re spending lifestyle.

Anyone can apply for a Discover credit card. However, these cards are particularly beneficial if you’re a student looking to build your credit history, or if you prefer a credit card with cash back rewards. In addition, many Discover credit cards don’t charge a foreign transaction fee, making these cards an affordable option if you travel overseas frequently.

Discover the Best Credit Cards

Different Type of Discover Credit Cards

Discover credit cards aren’t all one and the same. Understanding the brand’s selection of cards can help you decide which one is right for your wallet. Here’s a look at different types of credit cards offered by Discover.

  1. Cash Back Credit Card

If you’re a frequent credit card user and you’re interested in earning money, several Discover credit cards include cash back rewards where you earn a percentage of cash back on every purchase.

Cashback rules vary by card, but you can typically earn between 2% and 5% cash back on purchases in select spending categories, and 1% cash back on all other purchases. This is an incentive to use the card for everyday purchases. Once you accumulate cash back, you can redeem your reward for a statement credit, a check, a gift card, or donate your cash to charity.

As a reminder, spending categories that offer the highest cash back percentage rotate every few months. Therefore, you may earn 5% cash back on grocery store and restaurant purchases for three months out of the year, and then 5% cash back on gasoline purchases for another three months out of the year.

  1. Miles Credit Card

Discover also has a credit card for earning miles on every dollar you spend. This particular rewards credit card is beneficial if you travel frequently and you’re looking to save on future travel expenses. Use your Discover credit card to pay for everyday purchases and you’ll maximize your earnings. Redeem miles for airfare, hotel, car rental or memorable experiences like a cruise vacation.

  1. Student Credit Card

If you’re a college student looking to establish credit, you might be an excellent candidate for a Discover student credit card. The minimum age to qualify is between 18 and 21, and you must be employed to get an account in your name. This credit card lets you establish credit at a young age, which can help you qualify for an apartment, house or car after graduating from college. Although this credit card is available to young adults, you may need a cosigner if you apply for a student credit card under the age of 21. Since the way you manage this account affects your cosigner’s credit score, make sure you pay your credit card statement on time each month and don’t max out the account.

  1. Secured Credit Card

You don’t have to be a college student to establish a credit history. If you’re looking to build credit or improve a bad credit score, a secured Discover credit card can help. These credit cards require a cash deposit between $200 and $2,500, and your credit line is based on the amount of your security deposit. Discover will automatically review your account history each month after the first eight months to see if you qualify for an unsecured credit account. If so, the bank will refund your security deposit.

Remember, a secured credit card is not a prepaid credit card. You will receive a monthly statement each month and you’re required to make at least the minimum payment every month to increase your credit score. To build a strong credit score, always pay your bill on time each month and make sure your credit card balance never exceeds 30% of your credit line.

Pros and Cons of a Discover Credit Card

  • Redeem your cash back and miles anytime. If your Discover credit card earns cash back or miles, you can redeem your rewards anytime. So whether you’ve accumulated $5 or $500 in cash back, there are no minimum requirements for redemption. Apply your cash back bonus to your statement balance or request a check. Likewise, redeem your miles for travel at any time and on any airline.
  • Enjoy extra perks. Before applying for a Discover credit card, familiarize yourself with the card’s Guide to Benefits located on the bank’s website. This guide provides an explanation of perks you’ll receive as a cardholder. These benefits vary from card to card but might include price protection, purchase protection, an extended warranty or travel insurance. Cardholder benefits can save you money in the future. Let’s say your card includes price protection. If you purchase an item with your Discover credit card, and then later find the exact item at a cheaper price (usually within 60 to 90 days), Discover will reimburse you the difference up to a certain amount.
  • Free credit score. Discover also makes it easier to monitor your credit score. As a cardholder, each monthly statement you receive will include your most up-to-date credit score at no additional charge. This feature helps you keep tabs on your credit, which is pivotal for building your credit history. Getting your free credit score, however, doesn’t replace regular credit report monitoring. Continue to order a copy of your credit reports at least once a year from the three major credit bureaus (Experian, TransUnion, and Equifax).
  • Match program. Discover will match all the cash back and miles you’ve earned at the end of your first 12 months. This is an excellent way to maximize your reward earnings. If you earn a total of $300 in cash back in the first year of opening an account, Discover will give you an additional $300. Unfortunately, Discover only matches rewards up to a certain amount. This amount varies by card, so familiarize yourself with the card’s terms and conditions before applying.
  • No annual fees. Many credit cards charge an annual fee to offset the cost of a rewards programs. However, Discover credit cards don’t charge this added expense.
  • Frequent rotating categories. One downside to a cash back Discover credit card is that you have to pay attention to the card’s rotating categories. If not, you might not benefit fully from the cash back program, and you could miss out on earning a higher cash back percentage. Sign into your online account on a regular basis for information on the card’s latest promotions. Make a concerted effort to use your Discover credit card when you’re able to earn more cash back. In other words, if the latest promotion offers 5% cash back on gasoline purchases, use your Discover credit card every time you pump gas until the promotion ends.
  • Limited cash back earnings. Even if you’re able to maximize the card’s cash back program and earn 5% cash back on certain purchases, you’ll only earn this higher percentage of up to $1,500 in combined purchases. After that, you only earn 1% cash back on purchases.
  • Not accepted everywhere. Unfortunately, Discover credit cards are not accepted everywhere. Many larger retail stores welcome these cards, but some smaller retail stores only accept a Visa or a MasterCard. Before applying for a Discover, think about where you shop and inquire as to whether your favorite retailers accept this credit card.
  • No business credit card. Another downside is that Discover doesn’t offer a business credit card. You can always apply for a personal Discover credit card and use this card exclusively for business expenses. However, this approach only works if you’re committed to only charging business expenses to this account and keeping personal expenses separate.

Higher interest rates. Because Discover credit cards offer higher cash back percentages in certain categories and no annual fees, these credit cards tend to have higher interest rates compared to similar cards. Before applying for a card, make sure you compare rates. Having a higher credit score can help you secure a competitive interest rate. Therefore, check your credit score beforehand and take steps to improve your credit before applying for a card (pay down debt and pay your bills on time every month).

Tips on Using Your Discover Credit Card

  • Shop Discover Deals. Once you receive your Discover credit card, shop through the credit card’s online shopping portal to earn a higher cash back percentage. You can shop a variety of brands through this portal, including Amazon, Groupon, eBay, Apple and Bath and Body Works. Discover Deals vary, so you’ll need to browse different retailers to see how much cash you can earn with each purchase. For example, if you make an Apple purchase through Discover’s online portal, you can earn 5% cash back on this purchase. In addition, you can earn 20% cash back on Bath and Body Works purchases through Discover Deals.
  • Compare the cost of using the card. Read the card’s terms and condition to ensure you understand the cost of using the card. For example: What is the credit card’s balance transfer fee? If the card offers an introductory rate on balance transfers and purchases, how long will you receive the introductory APR, and what is the regular APR once the introductory rate concludes? You should also compare late penalties, cash advance fees, foreign transaction fees and grace periods.
  • Pay off your balance every month. To avoid accumulating massive debt, make sure you pay off your credit card balance every month. For this to happen, only spend what you can afford to pay off. Too much credit card debt can reduce your credit score. As a general rule of thumb, don’t carry a balance from month to month. If you do carry a balance, your balance should not exceed 30% of your credit line.
  • Take advantage of online tools. Sign up for online account management to monitor your Discover account activity online. This way, you can check your balance often and avoid overspending. Online tools also make it easier to schedule monthly payments, which can ensure a timely arrival and alleviate late fees. Other online tools to utilize include paperless statements and payment reminders.

Utilize security features. If you misplace your Discover credit card, sign into your account from the mobile app or the website and select the option to freeze your account. This prevents anyone from using your credit card without your authorization. Once you locate your credit card, unfreeze your account at any time. If you’re unable to locate your card, or if you suspect fraudulent activity, notify Discover immediately to request a new credit card and a new account number.

How to Apply Online for a Discover Credit Card?

Applying for a Discover credit card online is fast and convenient. Visit Discover.com to compare different types of cards, and then apply directly from your computer. To expedite your request, make sure you complete all fields of the application and enter your personal information accurately.

Before applying, read the fine print on the application to avoid surprises later on. The application has information on interest rates and fees, and it will also include the minimum credit requirements for the card.

Since too many credit inquiries can reduce your credit score, only apply for one new credit account at a time.

Conclusion

If you’re searching for a credit card with no annual fee and no foreign transaction fee, a Discover credit card might be the right choice for you. Bear in mind that Discover credit cards are not accepted by all retailers. Since these cards typically feature no annual fees and higher cash back percentages, you could end up paying a higher interest rate, hence the importance of shopping around and comparing costs.