Q: Every credit card I’ve had has either been a Visa or MasterCard. I’ve seen those commercials for 5 percent cash back from Discover but I have no experience using them. Is Discover card good to have or not?
A: Just take a look at our Discover forum, and you’ll find many satisfied – but also a fair number of dissatisfied — customers. That’s because the word “good” is subjective – and no credit card will make everyone happy. I’ll present you with the facts so you can draw your own conclusion.
Part 1: The Customer service
Discover has a solid reputation when it comes to customer service. The bank is based in the U.S. and when you call, they actually tell you where they’re located — usually their Utah or New York call center (and yes, they’re actually telling the truth).
But don’t take my word for it … in its 2013 Credit Card Satisfaction Study, J.D. Power & Associates ranked AmEx and Discover as the two top-rated credit card companies for “customer interaction.” That’s statistically significant proof that there is customer service quality present, not just marketing hype.
Part 2: The rewards
Is Discover good for rewards? Yes, as long as you understand how they work. Keep in mind that Discover Card has undergone some changes over time, most recently replacing its previous 5 percent card (the Discover More) with the Discover it in 2013. With the More card, for non-category spending (purchases which were not part of the 5 percent), there was a tiered system in place: You got percent cash back only after spending $3,000 in a year. But the “it” card gives a full 1 percent from the start. This is a much, much better program.
The best way to stretch your cash-back rewards with the “it” card is to redeem them for partner gift cards, which you can often get for less than face value. Read this Discover It card review to learn more.
Part 3: The benefits
Discover offers a lot of benefits – here’s what you can expect in 2016 …
- No annual fee – Previously, Discover issued cards with and without fees. But they’ve consolidated many of those offerings into the “it” card, which charges no annual fee.
- Travel assistance – this includes emergency medical referral (helpful if you’re in a foreign country).
- Travel insurance benefits – There’s car rental collision damage insurance (secondary coverage) and flight accident insurance for airline tickets.
- Account management tools – Calling these special would be a stretch, but Discover probably does have the best online account interface. Very easy to use and tons of budgeting tools for analyzing your spending.
- Extended warranty – On qualifying purchases that come with a manufacturer’s warranty, Discover will extend the coverage period by up to 1 additional year for free.
- Purchase protection – Up to $500 in coverage for qualifying items that are damaged or stolen within 90 days of purchase.
- Return Protection – You can return new purchased items to Discover within the first 90 days, even if the store won’t take them back.
- Price protection – This is a relatively rare benefit for cards to offer. If you find a lower price within 90 days of purchase, under eligible circumstances Discover will refund you the difference, up to $500.
Part 4: Card acceptance
Contrary to popular belief, Discover now actually has good acceptance – more than 90 percent of merchants in the U.S. who accept Visa/MasterCard also take Discover.
On the other hand, their international acceptance could use some improvement — which is a shame because the card charges no foreign transaction fees. Their acceptance is growing every year but still isn’t on par with Visa or MasterCard.
Part Five: Approval requirements
A drawback with Discover is that you generally need a fairly excellent credit score to qualify. Although they don’t publicly disclose the minimum and it’s pure speculation on my part, it seems to be that you need at least a 720 FICO to get approved. If you’re in college, go here for the student online application. Luckily, their student product doesn’t require as high of credit score and is designed with those with little or no credit history in mind. However, you must be enrolled in an accredited four-year college or university to be considered.
Written or last updated August 1, 2016