DEFINITION of 'Discover Card'

A credit card branded by Discover Financial Services, a banking and payment services company that is one of the biggest credit card issuers in the United States. As of 2014, Discover offers a limited number of credit cards, including the Discover it card, Discover it card for students and Discover Business card. Discover was the first company to offer a cash rewards credit card. It also offered no annual fee and 24/7 customer service. All of these benefits were new to the credit card industry at the time, and many competing credit card companies followed suit.

BREAKING DOWN 'Discover Card'

Discover cards offer consumers many benefits. As of 2014, the regular Discover it card offers 5% back in spending categories that change quarterly; for example, in January through March, cardholders could earn 5% back on up to $1,500 in purchases at gas stations, while in October through December, they could earn 5% back on up to $1,500 in purchases made online. The student version offers 2% back on up to $1,000 in purchases each quarter at gas stations and restaurants; the reward categories don’t change throughout the year. Both Discover it cards also gives cardholders 1% back on all other purchases. Cardholders can redeem cash back for statement credits, gift cards, Amazon purchases or cash deposited directly to a bank account.

In addition to cash back, Discover cards offer various consumer protections and benefits. Discover it and Discover it student cards have no annual fee, no overlimit fee, no foreign transaction fees, no late fee on the first late payment, and no penalty APR.  Individual cardholders get a free FICO score on each monthly statement. Like other credit cards, Discover has a zero liability policy for any fraudulent transactions, meaning the customer doesn’t pay anything if a card is lost or stolen and a thief uses it to make purchases. Also like other credit cards, Discover cards offer purchase protection, extended product warranties, price protection, return guarantees and other benefits. Discover cards are accepted worldwide, though a consumer’s ability to use a Discover card in a particular country will vary by merchant.

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