Understanding Discover Credit Cards
Credit cards allow you to make purchases and pay over time. With so many options on the market, discovering the right credit card takes research. When weighing your choices, keep your financial situation and spending habits in mind to find the best fit.
What is a Discover Card?
Discover Financial Services issues Discover credit cards. As one of the major credit card networks in the United States, Discover has a wide reach and acceptance. The company offers several credit card options cash back rewards, travel perks, student benefits, and more.
The Discover it® Cash Back card allows you to earn 5% cash back in rotating quarterly categories. All other purchases earn 1% back. There is also an option to earn more rewards your first year. The Discover it® Balance Transfer card provides an intro 0% APR on balance transfers for 18 months. This can save money if trying to pay off credit card debt.
Benefits of a Discover Card
Discover cards do not charge an annual fee. They offer U.S.-based customer service around the clock. Your FICO® Credit Score is free on each monthly statement. That allows cardholders to monitor their credit score at no extra cost.
Discover cardholders also get free Social Security number alerts. This informs you if the company detects your SSN on risky websites. Additionally, Discover does not charge fees for foreign transactions. This makes the card ideal for international travelers.
Cash Back Rewards
Discover cash back credit cards allow you to earn a percentage of money back on purchases. Many cards offer bonus rewards like 5% cash back on quarterly categories. Common categories include gas stations, grocery stores, restaurants, and Amazon.com. All other purchases typically earn 1% back.
You can redeem the rewards for statement credits, bank deposits, Amazon.com purchases, and more. Some households can earn hundreds of dollars back per year with strategic spending. Just make sure to pay your balance off each month to avoid interest and fees.
Choosing the Best Discover Card
Discover offers four main personal credit cards and a student card. Consider annual fees, interest rates, and rewards when comparing your options:
- Discover it® Cash Back
- Discover it® Balance Transfer
- Discover it® Chrome
- Discover it® Secured
- Discover it® Student Cash Back
Cash Back or Travel Rewards?
The Discover it® Cash Back and Discover it® Miles cards earn the same bonuses and have similar benefits. The main difference is whether you want to earn cash back or travel miles.
With the cash back card, you would earn statement credits towards purchases. The miles card accrues rewards to use towards travel reservations. Determine which suits your spending habits better.
Good Credit Score Required
Discover credit cards require applicants to have good or excellent credit. That typically means a FICO® Score of at least 690 or higher. If you have bad credit, Discover may deny your application.
The Discover it® Secured card is an exception. It is made for those rebuilding credit. You make a refundable security deposit that becomes your credit limit. Responsible use can demonstrate to lenders that you deserve an unsecured card.
Prequalification and Eligibility
Before formally applying, it is wise to check if you prequalify for a Discover card. Prequalification uses a soft credit check that does not impact your score. That allows you to see offers matched to your credit history.
Some other factors lenders evaluate include your income, existing debts, address history, and banking information. Taking a few minutes to prequalify gives you better approval odds upfront.
Tips for Discover Card Applications
Below are some tips when applying for a Discover credit card:
- Check your credit reports and FICO® Scores ahead of time
- Reduce credit utilization below 30% if too high currently
- Pay all bills on time leading up to your application
- List any taxable income you receive
- Have pay stubs or tax returns available if asked
Preparing these items demonstrates your creditworthiness. It also shows the lender you are organized and on top of your finances. Taking these steps can set you up for acceptance of a new Discover card.
Get Support If Denied
Even if denied for a Discover card, do not get discouraged. The denial letter will provide guidance on becoming eligible in the future. You can also call Discover's reconsideration line for additional support.
By taking the right financial steps over several months, you may qualify upon trying again. Giving yourself plenty of time to build credit can raise your odds of getting approved.
FAQs
What is the minimum credit score needed for a Discover card?
Most Discover cards require a minimum credit score of 690 or higher. The exception is the Discover it® Secured card which is made for those rebuilding credit.
Can Discover cards be used internationally?
Yes, Discover has no foreign transaction fees. This makes Discover a good credit card option for international travel and purchases.
How do I redeem Discover cash back rewards?
Discover rewards can be redeemed for statement credits, bank deposits, Amazon.com purchases, gift cards, and through PayPal. You can set up automatic redemptions as well.
What perks come with the Discover student card?
The Discover it® Student Cash Back card offers 5% cash back on rotating categories and 1% back on other purchases. It also provides a $20 statement credit for good grades each school year.
Disclaimer: This article is for informational purposes only and does not constitute medical advice. Always consult with a healthcare professional before starting any new treatment regimen.