Comparing Visa And Discover Cards

Two popular types of credit cards — Visa and Discover — get a lot of attention due to their popularity and perks, yet they don’t work quite the same. Visa is a credit card network; it does not issue credit cards. This is why you see Visa credit cards issued by major banks like Chase or Capital One. Discover, on the other hand, is a credit card issuer and a credit card network. Other major credit card networks include American Express (which also issues its own cards) and Mastercard (which is not a card issuer).

Credit card networks process payments and set rules for how their cards can be used, while credit card issuers determine credit cards’ rewards, benefits and offers. The fact that Discover is both a card network and a card issuer doesn’t necessarily make it better or worse. It’s just one important detail to be aware of as you compare top credit card offers.

When shopping for a new credit card, it’s easy to become overwhelmed by all of the options, details and even the networks they run on. Below, we’ll explore the similarities and differences between Visa and Discover, and why you may want to consider one over the other.

Visa vs. Discover credit cards: At a glance

Global acceptance winner: Visa

Global acceptance is one area where Visa beats Discover, with usage in more than 200 countries and territories worldwide. According to the card network, there are currently 4.8 billion Visa cards in use and more than 150 million merchant locations.

In comparison to Visa, Discover cards are accepted at more than 70 million locations. Discover boasts that their cards are accepted at more than 99 percent of places that accept credit cards in the U.S., but the Discover coverage map shows huge gaps in global acceptance in Africa, the Middle East and Eastern Europe.

The reality is that there are more destinations worldwide where Discover cards aren’t accepted, whereas you’ll almost always be able to use a Visa in places where credit cards are accepted as payment.

Foreign transaction fees winner: Discover

Despite gaps in global acceptance, Discover does take the lead here — its cards never charge foreign transaction fees. If you are traveling to a country where Discover acceptance is prevalent, this could save you from having to pay a foreign transaction fee (usually 3 percent) on your purchases abroad.

When it comes to Visa credit cards, some charge foreign transaction fees while others do not. This means you’ll want to be careful when picking a Visa credit card if you frequently travel abroad.

Cardholder benefits winner: Visa

For cardholder perks, Visa comes out ahead. The selection of perks you’ll receive as a cardholder depends on the type of Visa card you have — a traditional Visa credit card, a Visa Signature card or a Visa Infinite card. However, even bottom-tier Visa cards come with benefits like 24/7 customer service, roadside dispatch, emergency card replacement, emergency cash advance and zero fraud liability.

With Visa Signature, you’ll receive perks like extended warranties and travel and emergency assistance services. With Visa Infinite, you’ll get elite benefits like trip cancellation and interruption insurance, lost luggage reimbursement, return protection and more.

Discover credit cards tend to be light on benefits. You’ll receive benefits like zero fraud liability, identity theft monitoring, free overnight card replacement, 24/7 customer service and a free FICO score on your credit card statement. Plus, many Discover cards will not charge you a late payment fee for your first late payment (after that, up to $41).

Annual fees winner: Discover

Discover credit cards never charge an annual fee, which can be helpful if you want to earn rewards without paying for the privilege.

Visa credit cards may or may not charge an annual fee—this depends on the card issuer and specific card offer. You’ll find plenty of Visa credit cards that offer rewards without an annual fee – like the Chase Freedom Unlimited®, for example – but you’ll also find premium credit cards like the Chase Sapphire Reserve®, which comes with a $795 annual fee.

Welcome offer winner: Depends

The welcome offer winner depends on the card. Most Visa credit cards come with generous welcome bonuses that you can earn if you meet a spending threshold within the first few months of account opening. Discover credit cards, however, do not offer traditional welcome bonuses; they offer Cashback Match for the first 12 months.

Let’s take a look at the previously-mentioned Visa card examples. The Chase Freedom Unlimited allows new cardholders to earn a $200 bonus after spending $500 on purchases in the first three months from account opening. The Chase Sapphire Reserve, on the other hand, offers new cardholders 100,000 points (worth $2,000 in travel, per Bankrate’s valuations) and a $500 Chase Travel promo credit after spending $5,000 on purchases in the first three months.

In comparison, Discover cards’ Cashback Match welcome offer matches all cash back and miles you earn after the first year. So if you earn $200 in cash back during your first year, at the end of the year, Discover will double that amount to $400 in total cash back. Discover’s Cashback Match offer has the potential to earn more bonus rewards during the first year than comparable no-annual-fee Visa cards, which typically offer a welcome bonus of $200 to $300. But because your Cashback Match bonus is tied to how much regular cash back you earn in your first year, you’ll need to be smart about maximizing bonus categories and spend a lot to receive the maximum bonus.

For example, to earn $200 in Cashback Match on the Discover it® Cash Back Credit Card, you’d need to spend $4,000 in the card’s rotating 5% categories in the first year. The Chase Freedom Unlimited’s welcome offer will give you a $200 bonus after you spend $500 on any purchases in the first three months.

There are also no spending thresholds to meet with Discover cards, making it easier to earn a bonus, however small, compared to the all-or-nothing offers of most Visa cards.

However, if you’re more interested in a luxury travel card — which Discover doesn’t currently issue — then a Visa card like the Chase Sapphire Reserve offers a better welcome bonus and value.

Rewards rate winner: Depends

The rewards rate winner depends on the card you choose and whether you maximize rewards earnings.

Many Visa credit cards let you earn rewards, although the offers can vary dramatically. Some let you earn a flat rate of cash-back for all purchases, while others let you earn a higher rewards rate on certain category purchases, like gas or groceries. And then there are Visa cards that let you earn points for travel or rewards in a flexible program like Chase Ultimate Rewards, which give you higher value for your points when redeeming for select travel through Chase. Also note that some Visa credit cards, like the Chase Sapphire Reserve, let users transfer their points to airline and hotel partner programs, which is a benefit you won’t find with Discover credit cards.

When it comes to Discover credit cards that earn rewards, the focus is mainly on cash back instead. For example, you may want to opt for a cash-back credit card like the Discover it® Cash Back, which offers 5 percent cash back (after activation) on rotating categories each quarter (on up to $1,500 in purchases, then 1 percent), plus 1 percent on all other purchases.

Maybe you want to earn travel rewards with the Discover it® Miles, which offers an unlimited 1.5X miles on all purchases. Just be aware that this card doesn’t offer any travel-specific benefits, nor does it have the option to transfer miles to airline or hotel partners. Instead, you can redeem the miles you earn for cash back or a statement credit.

Odds of approval winner: Tie

Both Visa and Discover consider their approval process to be proprietary, so there are no hard and fast rules to help you determine whether you can get one of their cards.

They also have cards with credit requirements ranging from poor to excellent credit. For example, the top rewards cards from both issuers are typically available to consumers with very good or excellent credit. For consumers with poor credit, the Discover it® Secured Credit Card helps consumers to build credit from scratch or repair credit mistakes from the past. Meanwhile, the U.S. Bank Secured Visa® card* is a Visa card option that can help you do the same.

The Chase Freedom Rise® Credit Card℠* is also a newer card from Visa that helps build credit. Having a banking relationship and at least $250 on deposit with Chase will increase your chances of getting approved for the card.

Who should choose a Visa credit card?

• Those who want more options for earning rewards: while both Visa and Discover offer rewards cards that let you earn a return on everyday purchases, Visa has a lot more options from a variety of different issuers. Whether you’re looking for cash back or travel points and miles, you’re much more likely to find a card that best fits your goals and spending habits from Visa’s vast selection.
• Those looking for premium card benefits: If you’re hoping for elite credit card benefits like airport lounge access, annual travel credits or statement credits for Global Entry or TSA Precheck, then this is another area where Visa pulls out ahead since Discover cards do not offer these benefits. The Visa cards that do offer these benefits tend to come with considerable annual fees, but the perks can more than offset the costs if used strategically.
• Those who want to use their card internationally: while Discover cards have no foreign transaction fees and are accepted in many places around the world, their overall global acceptance rate is still lower than Visa cards. If you travel a lot, it’s worth choosing Visa over Discover to ensure you have the highest possible chance of being able to use your card wherever you go. Just be sure to pick a Visa card with no foreign transaction fees.
• Business owners: Discover doesn’t offer any business credit cards, while Visa has a solid selection of them. If you’re a small business owner, freelancer or entrepreneur looking to earn rewards on your business spending, a Visa card can be a good option.

Who should choose a Discover credit card?

• Those who can maximize Cashback Match: depending on your spending habits, a Discover card with Cashback Match could be more rewarding than a Visa card with a lump-sum welcome bonus. There’s no limit on how much you can earn through Cashback Match, making this offer potentially lucrative for high spenders.
• Those who want to minimize fees: all Discover cards have no annual fee and no foreign transaction fees, while fees for Visa cards vary by issuer and card. If you want to avoid an annual fee and foreign transaction fees but don’t want to comb through the terms and conditions of every card you’re considering, choose Discover.
• Those who want some protection from late payment penalties: Discover doesn’t charge a penalty APR on its cards and there’s no late payment fee for your first late payment ($41 late payment fee afterwards). While you should always try to pay your credit card bill on time and in full to avoid interest and keep your credit score up, knowing that you won’t be charged a fee for missing a payment once might give you some peace of mind.

The bottom line

So, Visa vs. Discover — which is better? It doesn’t matter so much whether you wind up with a Visa card or a Discover card. The key consideration is which card gets you where you want to be. At the end of the day, only you can decide which credit card is best for your wallet. To find the best card for you, think about your spending habits and needs, and compare individual cards in terms of their fees, rewards and cardholder perks.

For example, if you’re interested in earning rewards, compare top rewards credit cards to find the rewards rates and benefits that work best for you. And if you’re looking to consolidate debt, it would be a good idea to consider a 0 percent APR credit card, which will allow you to pay off debt interest-free over a select period of time. No matter your needs, there’s a credit card out there for you.

Frequently asked questions

• Does Discover have any business credit cards?
  

  While Discover once offered a business credit card that earned cash back, the issuer is no longer accepting new applications for this product.

• What are the downsides of having a Discover credit card?
  

  Discover credit cards have a lower acceptance rate at merchants around the world, and they are not usable in large swaths of Africa and the Middle East. Discover credit cards can also have fewer benefits than the best rewards credit cards from Visa and other card networks.

• How many countries accept Discover cards?
  

  According to updated information from Discover, its cards are accepted in 200+ countries and territories globally with more than 70 million merchant acceptance points worldwide.

• Why are Visa cards so popular?
  

  Visa cards are popular due to their broad global acceptance and the range of card options available. Many of the best Visa credit cards earn cash back, airline miles, hotel loyalty points or flexible rewards for travel while offering valuable cardholder benefits along the way.

*The information about the U.S. Bank Secured visa card and the Chase Freedom Rise has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.