I was searching online to compare the new offer I have from Discover, and I found that credit cards are divided into Visa, MasterCard, Discover and American Express.

How is the Discover card different to its competitors? What are its advantages and disadvantages?

  • The answers should focus on member benefits that are unique to the networks -- warranty extension, dispute processes -- and other policies that differientiate them – William Entriken Nov 6 '15 at 16:47

Each of those is a network. Merchants displaying their logos - participate in their network and will accept cards that bear the same logo. Most merchants participate in more than one network.

Discover is mostly used in the US, while Visa, Mastercard and American Express are more widely spread in the world (Amex less, Visa and MC are much more widely spread).

In addition to being widely spread in the US, Discover is accepted everywhere where UnionPay is accepted (mostly in China) and Diners Club (mostly in EMEA).

Advantages/disadvantages? You'll have to compare specific cards, but if you're a traveler in the world - then Discover will probably not be as appealing as Visa or Mastercard.

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    AmEx tends to be oriented toward business accounts -- they play nicely with corporate expense-account management systems, for example, and they used to have good travel services before they got sloppy -- so you'll see them less commonly as personal cards. One advantage of AmEx: They have stricter requirements on some kinds of vendors. In particular: If you have a hotel room reserved on an AmEx card, and show up to find that the hotel has no space (sometimes happens), the hotel WILL find you a room somewhere nearby, or AmEx will be out there in 24 hours scraping their decal off the window... – keshlam Nov 12 '14 at 7:12
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    @keshlam My first personal credit card was Amex, and I've had an account with them since the last century, don't know what you're talking about...:) Anyway, their service is superb, but their business model is slightly different. They have only recently started allowing other banks to issue cards with their logo, and the merchants who accept them are usually more reputable and stable (in part because they're more expensive). – littleadv Nov 12 '14 at 7:17
  • There are personal AmEx accounts, certainly... but they're much, much less common, in my experience. The main exception I've seen has been Costco members, since AmEx used to be the one card they accepted. Your experience may, of course, be very different. (Yes, business model is a bit different; didn't want to get into that depth.) – keshlam Nov 12 '14 at 7:21
  • @sunk818 both Amex and dicsover "lend" their logos to banks just as well. There are plenty of bank-issued amex and diners club (owned by Discover) cards. – littleadv Dec 6 '14 at 6:14
  • @sunk818 actually it is. For Amex - they have at least one bank in every market which is franchised to give out their cards (used to have exactly one, but I think in some markets they have more). Diners Club operates exactly as Visa and Mastercard, and is the Discover's outside-the-US brand. Discover doesn't own the Diners Club trademark in the US itself. – littleadv Dec 6 '14 at 6:18

From the business side of credit cards, Discover and American Express carry their own risk. AmEx has lent their logo to banks such as Bank of America (BofA) to use the AmEx transaction network, but the financial risk and customer service is provided by BofA. Visa and MasterCard let banks use their logo and process through their respective networks for a fee. The financial risk of fraud, non-payment from merchants, etc is the risk that the individual banks carry.

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