Credit Cards Credit Card Basics What Is a Discover Card? Discover Card Explained in Less Than 4 Minutes By LaToya Irby LaToya Irby Facebook Twitter LaToya Irby is a credit expert who has been covering credit and debt management for The Balance for more than a dozen years. She's been quoted in USA Today, The Chicago Tribune, and the Associated Press, and her work has been cited in several books. learn about our editorial policies Updated on June 20, 2022 Reviewed by Ebony J. Howard Reviewed by Ebony J. Howard Ebony Howard is a certified public accountant and a QuickBooks ProAdvisor tax expert. She has been in the accounting, audit, and tax profession for more than 13 years, working with individuals and a variety of companies in the health care, banking, and accounting industries. learn about our financial review board Share Tweet Pin Email In This Article View All In This Article Definition and Example of Discover Cards How Discover Cards Work Types of Discover Cards Definition A Discover card is a credit card issued by Discover Bank, one of four major U.S. payment processing networks. Photo: Brothers91 / Getty Images A Discover card is a credit card issued by Discover Bank, one of four major U.S. payment processing networks. Discover cards offer cash-back and travel rewards that cardholders earn by making qualifying purchases and there is no annual fee. Discover cards are widely accepted along with Visa, Mastercard, and American Express, and they consistently top consumer satisfaction surveys. Definition and Example of Discover Cards Discover Financial Services includes a digital banking segment and the processing network segment (Discover Network). “Discover card” refers to one of several consumer credit cards issued by Discover Bank, the digital banking segment. Discover cardholders can use their cards to make purchases and pay the balance off over time with interest. Discover cards’ stated consumer advantages include cash-back rewards, no annual fee, and a positive customer experience. Discover cards include cards for consumers, students, and a secured credit card. The issuer offers a cash-back credit card and miles-earning travel credit card. Each features the Discover logo with an orange letter "O." How Discover Cards Work Discover is both the credit card issuer and payment processing network for its consumer credit cards. As a card issuer, Discover determines the acceptable credit risk for its credit cards. It is responsible for marketing card products, approving new credit card applications, and providing customer assistance. Note Discover also issues Diners Club credit cards for consumers and small businesses in select nations around the world. Card Acceptance Discover card acceptance (or lack thereof) is a frequent misconception, the issuer notes. Discover cards are accepted at 99% of U.S. businesses. Discover cards are accepted where the Discover Global Network is active; the Discover network includes Discover Network, Diners Club International (DCI), PULSE debit network, and other partners. Globally, Discover cards are accepted at 61 million businesses, according to the Nilson Report. This is significantly less than Visa and Mastercard, each accepted at 80 million businesses. American Express falls just behind Discover with 60 million businesses accepting payments. Discover cards are widely accepted in most countries in North America, South America, Europe, and Australia. They may only be accepted in some countries in Africa and Asia. Note Some merchants don’t display all card logos on store windows. Some stores might not display a Discover logo—but do display a Diners Club logo (Diners Club is accepted at 45 million businesses worldwide). A shop with a Diners Club logo will accept a Discover card. Ask a merchant if you’re unsure. Payment Processing Discover provides the technology to facilitate transactions made on its cards, and Discover card transactions in the U.S. can be streamlined if the merchant has a relationship with Discover: Cardmember makes purchase with their Discover card at a merchantMerchant sends the transaction amount to the Discover NetworkDiscover reimburses the merchant for the amount, minus any fees If the merchant doesn’t have a relationship with Discover, a bank acquirer or processor acts as a middleman between Discover and the merchant. Discover Card Benefits Cardholders benefits for Discover cards are fairly standard among issuers: Fraud protection: Social Security number inquiry and new account alerts; Freeze It (fast account freezing); Discover Card monitoringFree FICO Score checkingRecurring charge dashboard and spending analyzerTap to pay with a contactless cardPay using rewards at Amazon and PayPalAbility to add your card to digital wallets Types of Discover Cards Discover issues four types of credit cards, each with rewards and with no annual fee. Cash Back The cash-back credit card offers up to 5% cash-back rewards on purchases. Consumers qualify for the card based on their credit history and income. Student Discover's student credit card is available for college students to help build their credit history. Secured Discover's secured credit card allows consumers to establish or rebuild their credit. Consumers make a security deposit to guarantee the balance. It’s also one of the few secured credit cards that offers cash back on purchases. With responsible use, cardholders may be able to upgrade their card to an unsecured account. Travel Purchases on the Discover travel card earn miles that customers can redeem for a statement credit against travel purchases or for cash back. While mile earnings and redemption are pretty straightforward, Discover's travel card lacks common perks offered by a few other annual-fee-free travel cards, like travel accident insurance, car rental damage waiver, or an extended warranty. Note Discover has offered small business cards in the past, but does not currently offer the cards. Key Takeaways Discover cards are issued by Discover Bank, a financial services and technology company.All Discover cards offer rewards at no annual fee.Discover issues and processes its cards rather than relying on an outside financial institution.Acceptance is in line with the other card networks for domestic payments but may not yet have widespread global acceptance. Want to read more content like this? Sign up for The Balance’s newsletter for daily insights, analysis, and financial tips, all delivered straight to your inbox every morning! Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. Discover. "Busting Common Myths About Discover Card’s Acceptance." Discover. "Discover Card International Acceptance." Discover. "2021 Annual Report." Discover. "Discover It Cash-Back Credit Card."