Best Discover Credit Cards of 2020

Discover credit cards have been around since the mid-1980s, and since then, the Discover brand has been known for its solid products and excellent customer care. Today, it ranks fourth in terms of global credit card market share, and according to the 2019 J.D. Power survey, it scored the highest customer satisfaction rating among national issuers.

Discover’s customer-centric approach dates back to its beginnings, when it set a new trend by launching a credit card with no annual fee and cash back rewards. Though a common product in this day and age, it was considered an innovative combination at the time. Today, Discover credit cards still stand out for being light in fees. Apart from a lack of annual fee, customers also enjoy no foreign transaction fee, no overlimit fee and no late fee for the first missed or late payment.

While Discover doesn’t have a huge portfolio, it serves a wide range of consumers, from savvy cardholders with stellar credit to beginners with limited credit history. Over time, its products have evolved to include credit cards with different primary features. Here are our picks for the year ahead:

Best Discover credit cards of 2020

Discover it® Cash Back — Best overall cash back credit card

  • APR: 11.99% to 22.99% standard variable rate
  • Annual fee: $0
  • Primary feature: 5% cash back rewards on popular quarterly rotating categories, up to a maximum of $1,500 per quarter; 1% cash back on all other purchases.
  • Introductory bonus offer: 0% APR for 14 months on both purchases and balance transfers, with 3% intro balance transfer fee if completed by April 10, 2020. Automatic matching of cash back you’ve earned at the end of your first year. 

Discover it® Secured – Best for building credit

  • APR: 22.99% standard variable rate
  • Annual fee: $0
  • Primary feature: Start building credit history with a minimum refundable deposit of $200. 
  • Introductory bonus offer: Intro 10.99% APR for six months on balance transfers, with 3% intro fee, if completed by November 10, 2020, then standard variable APR and 5% fee for balance transfers thereafter. Automatic matching of cash back you’ve earned at the end of your first year.

Discover it® Student Cash Back — Best first credit card for students

  • APR: 12.99% – 21.99% standard variable rate
  • Annual fee: $0
  • Primary feature: 5% cash back rewards on popular quarterly rotating categories, up to a maximum of $1,500 per quarter; 1% cash back on all other purchases.
  • Introductory bonus offer: Intro 0% APR for six months on purchases. Intro 10.99% APR for six months on balance transfers with 3% fee if completed by November 10, 2020, then standard variable APR and 5% fee for balance transfers thereafter. Automatic matching of cash back you’ve earned at the end of your first year.

Discover it® Business Credit Card — Best for simple business rewards

  • APR: 12.99% to 20.99% standard variable rate
  • Annual fee: $0
  • Primary feature: earn unlimited 1.5% cash back for every dollar on all purchases.
  • Introductory bonus offer: Intro 0% APR for 12 months on purchases. Automatic matching of cash back you’ve earned at the end of your first year.
Name of card0% Purchase APR periodRegular APRAnnual fee
Discover it® Cash Back — Best overall cash back credit card14 months11.99% to 22.99%$0
Discover it® Secured — Best for building creditNot applicable22.99%$0
Discover it® Student Cash Back — Best first credit card for studentsSix months19.49%$0
Discover it® Business Credit Card — Best for simple business rewards12 months12.99% to 20.99%$0

FAQs

While the terms and features differ between Discover credit cards, they generally have low fees, decent rewards and easy redemption. They can be inexpensive to keep in your wallet — provided you repay outstanding balances in full each month. However, if you tend to carry balances, then the rewards you earn won’t be enough to compensate for the interest charges.

Do you need good credit to get a Discover card?

Yes and no. You need good or excellent credit for Discover’s cash back card, gas and restaurants card, travel card, NHL card, balance transfer card and business card.

However, for those with a less-than-perfect credit history, Discover offers two student cards and a secured credit card. With the secured credit card, you’re required to make a security deposit up to the amount of your credit line. If you demonstrate financially responsible behavior over a period of time (by making on-time payments and not incurring interest charges regularly), then you may be able to get your security deposit back and convert to an unsecured card.

It’s also worth noting too that you can view your FICO score for free on your monthly statements.

Does Discover offer a premium card?

No. Discover’s target market are primarily consumers who prioritize low fees and strong (but not necessarily top-of-the-market) cash back rewards.

What bank issues Discover cards?

Discover is a credit card network and an issuer — it issues its own cards through the Discover Bank. This is a bit different from Visas and Mastercards, which are both payment networks only. In practice, Discover credits cards are not as widely accepted internationally, so they may not be the best cards to take on holidays.

Which is better: Discover or American Express?

It depends. Discover and American Express have different strengths. Generally, AmEx cards are great for those who love travel rewards and value a broad product range. Discover credit cards, on the other hand, suit those who want cash back rewards and low fees. That said, every product has their own terms and features, so choosing the right credit card is about finding one that matches your spending habits and financial goals.

Let’s take a closer look at key differences between these two cards:

Fees

All Discover credit cards come with no annual, overlimit or foreign transaction fees. While there are some AmEx cards without an annual fee, many of them have one, and some charge foreign transaction fees too.

Rewards and benefits

AmEx offers cash back cards, but none of them have rotating bonus categories. You can get membership rewards points credit cards too, but AmEx’s key strength undoubtedly lies in its travel cards — it has got 10 of them on offer, including some co-branded cards for hotels and airlines. Many come with additional perks like car rental loss and damage insurance, global assist hotline and baggage insurance. It’s great if you’re looking for travel related rewards and benefits. AmEx provides return protection too, so you can shop with confidence knowing you could be eligible for a refund even if the merchant won’t take back your purchase.

In some ways, Discover feels more “no-frills” compared to AmEx because you won’t get perks like travel and shopping protection. Discover only has eight credit cards available, including one travel card and one business card, so your choice is definitely more limited.

But Discover makes up for this with its innovation. Firstly, it has cash back cards with rotating rewards categories, which gives you outstanding cash back rates on bonus categories that change on a quarterly basis. It also has a gas and restaurants card to suit those who prefer a simpler rewards structure. And instead of a traditional welcome bonus, Discover promises to double the cash back new members have earned at the end of their first year. With no ceiling to how much Discover will match, you can end up with a sizeable bonus, though you’ll have to wait a whole year to receive it.

Products for limited credit

Discover is a better choice for those looking to build credit, as its product range includes two student credit cards and a secured credit card. AmEx doesn’t offer either currently.

Does Discover have a 5% cash back option?

Yes, you can get 5% cash back with the Discover it Cash Back credit card (student and non-student) and the NHL Discover it card. These are all credit cards with rotating rewards, which means they offer high cash back rates on specific categories that change on a quarterly basis. Discover’s rotating bonus categories are broad and include gas, groceries and restaurants.

The downside is that you’ll have to monitor rewards categories and activate them to be given the full cash-back rate. There is a spending cap of $1,500 per quarter on bonus categories as well. So while you can get a lot more from your spending, rotating rewards credit cards require a bit of work.

There are other credit cards on the market with a similar offering, such as Chase Freedom, but the advantage you’ll have with Discover is that bonus categories for each quarter are announced at the beginning of the year. This allows you to predict how well your spending will match the rewards on offer throughout the year, and you can even time purchases to maximize your cash back.

Redemption is another strong point. You can redeem cash rewards for statement credits, direct deposit into your bank account or a donation to select charities. You can use rewards to shop on Amazon or buy gift cards if you have at least $20 in cash-back bonus. Better still, there are no minimum redemption requirements and your rewards won’t expire for the life of the account.

The final word

While Discover isn’t known for fancy benefits or top-of-the-market rewards rates, it undoubtedly gives cardholders something back for everyday spending. There are generous 0% APR periods on purchases and/or balance transfers for interest savings, and the unlimited cash back match can potentially be highly lucrative. Rewards redemption is easy too with Discover credit cards, as you can redeem any amount at any time.

When considering card options, it’s important to consider your spending patterns, financial goals and how much work you’re willing to do to maximize your rewards. For example, if you’re passionate about travel, then you might prefer travel instead of cash back rewards. Similarly, if you’re unlikely to remember, or simply don’t have the time to monitor the rewards calendar and activate bonus categories, then a flat-rate cash-back card would be a better choice than one with rotating rewards categories.

 

Kristie Kwok

Personal Finance Contributor

Kristie Kwok is a finance content writer with in-depth knowledge of the banking industry from her previous work experience in banks such as UBS, Lloyds Banking Group and Royal Bank of Scotland. She is a qualified accountant with a Bachelor of Commerce degree, specializing in Accounting and Finance.