Best Discover Credit Cards

What Is the History of Discover?

Discover was launched in 1985 and made its public debut in a Super Bowl commercial in early 1986. It is both a card network and a direct issuer of cards to consumers through Discover Bank, formerly Greenwood Trust Company. The Discover network ranks fourth in terms of dollar volume of processing and merchant acceptance, behind Visa, Mastercard, and American Express, and sixth in terms of cards issued. Discover was originally owned by Sears, Roebuck and Company (the largest retailer in the world at that time) and was part of the Sears Financial Network that also included Dean Witter Reynolds and Coldwell Banker as its brokerage and real-estate arms. Discover disrupted the card industry by issuing no-annual-fee cards and offering higher than normal credit lines. It later introduced its innovative Cashback rewards program, which was novel for its time.

What Kinds of Credit Cards Does Discover Issue?

Discover issues cards exclusively on its network-branded platform and doesn't issue Visa, Mastercard, or American Express network-branded cards. Discover primarily issues cash-back rewards cards to consumers, students, and small-business owners. It also offers a secured card product for those with lower credit scores or no credit history.

What Type of Credit Is Required for Discover?

Discover generally requires good or better credit for its card products but also offers a few cards for those with little credit history, such as students. 

How Does Discover's Cashback Rewards Program Work?

Discover offers cards that primarily earn cash back but also one that offers generic airline miles (Discover it Miles). Discover's Cashback rewards program provides a percentage back on all purchases, with 5% cash back on rotating spending categories and merchants on eligible spending up to $1,500 each quarter (with 1% after that) and 1% on all other spending.

The following Discover cards earn those Cashback rewards:

• Discover it Cash Back
• Discover it Balance Transfer
• Discover it Student Cash Back
• NHL Discover it

Several other Discover cards have a different cash-back rewards structure. The Discover it Chrome and Chrome Student cards offer 2% cash back on restaurant and gas purchases and 1% on other spending. The Discover it Business card offers unlimited 1.5% cash back on all purchases.

How Good Is Discover's Customer Service?

Discover received top marks for its customer service, scoring 842 out of 1,000 points, in the 2019 J.D. Power U.S. Credit Card Satisfaction Study, putting it first among national card issuers. The average score was 806. Discover has held this top spot for several years and features it in its national television advertising.

Methodology

Information Gathering

In order to track and assess the U.S. domestic credit card market, we gather scores of data points on nearly 300 cards. This data is collected manually from both card-issuer websites and publicly available sources. 

To ensure that our information is as up-to-date as possible, we deploy automated tools that monitor changes in such key data as annual percentage rates, introductory rates, introductory periods, bonus offers, rewards earnings rates, fees, and card benefits. We then rapidly make any needed updates to our card listings, reviews, and recommendations so that readers have the most reliable information and advice. 

Initial Scoring

Once we collect credit card data we organize it in our database according to features, which roll up into feature sets (such as rewards, interest, fees, benefits, and security/customer service). Each individual card feature is assigned a star rating score on a 1 to 5 scale using a prescribed formula. For instance, for a one-time bonus score we would use a formula like: If bonus is $500 or greater, then assign a score of 5; if $300-$499, then 4; and so forth. 

Weighting of Scores

Once all of a card’s features have received a score we apply a weighting factor to each feature to arrive at a weighted average score for the card (according to the general category in which it resides, such as travel rewards). 

This weighting process allows us to assign significantly more emphasis to the attributes important to a particular category and downplay those that are less relevant to it. That lets us objectively identify cards that stand out in their category and indicate why they do. For example, with travel rewards cards we apply significantly more weight to such travel-specific features as airport lounge access or primary rental car insurance than we do to attributes such as interest rates or fees that might be more strongly considered for other categories, such as balance-transfer cards.

Earnings Rates

Another critical factor we consider when rating and ranking travel cards and other types of rewards cards is the cards’ effective earnings rates. We first calculate the average value of points or miles for all the rewards cards in our database, a painstaking process that entails collecting all airline fare data by carrier across scores of popular domestic and international city-pairs along with per-night hotel charges at all major hotel brands. 

The required points and miles for air travel or hotel stays from the various reward programs is then used to calculate an effective earnings rate for each card. That allows our readers to make the most informed choices. By putting a card’s large one-time bonus or earnings rates into context across many dimensions and card features, readers can more readily weigh the card’s benefits relative to its costs. Uncovering the true but often opaque redemption value of rewards points or miles is, we feel, the only reliable way to make cogent choices among competing value-based cards.  

Card Features We Score

As mentioned above, we place significant weight on certain travel-related features in determining our ratings for each rewards card. Specifically, we base over 50% of our overall assessment score on the combination of the following factors:  

• Maximum value of any one-time bonus, whether in points or miles.
• Initial card spending required to earn any bonus.
• Redemption value of the bonus miles or points.
• Global card acceptance, as detailed by the four card networks (Visa, Mastercard, American Express, and Discover).
• Options to redeem points or miles with travel partners, both airline and hotel.

Another consideration is the cards’ coverage, if any, in these travel-related areas: 

• Car-rental collision insurance, whether primary or secondary.
• Travel accident insurance.
• Lost or delayed luggage insurance.
• Insurance for trip cancellation, interruption, or delay.
• Cell phone loss or damage coverage.
• Roadside assistance and towing.
• Emergency travel medical/dental benefits.

General, non-travel related features that we consider and score include:

• Interest rates, including both introductory and regular APRs for purchases and balance transfers.
• Fees, including those for annual membership, late payments, cash advances, and foreign transactions.
• Security/customer service features.
• Other non-travel benefits, such as access to credit scores, ID theft protection, and contactless payment capability.

How We Reach Our Final Assessments

We rely primarily on the objective scores created by our rating algorithms to determine which card is chosen as the best in each category or subcategory.

However, we may make some adjustments from time to time, to both features and weightings that could affect rankings, based on subjective input from our credit card experts. Any potential modifications will be consistent with Investopedia’s belief that consumers are best served by cards that:

• Provide superior value in earning awards.
• Charge reasonable interest rates in the event that the cardholder carries a balance from month to month.
• Charge fewer and/or more reasonable fees.
• Provide solid customer service, based on the number and quality of customer service features.
• Have helpful and protective security features.