Pros: No annual fee; fair grace period; helpful customer service; good incentives and services
Cons: High interest rate and late & overlimit fees; Only useful in the US
I have used Discover since 1989; around the time that they kicked off. Both my own credit card usage and the company have matured over that period of time. I have paid the price for abusing credit cards and agree with other reviewers (see here, for example) that when misused, Discover has many ways to get you! On the other hand, I find that, when used responsibly, Discover offers a good service with a good reward program and good online tools that offer a fair degree of transparency. For the past few years, I have been meticulous to use the card only when I had the means to pay it off before the 31 day grace period expires (compared to a 21 day grace period offered by my bank's gold Mastercard), to avoid cash advances and never to go over limit!
Rates and Fees
There is no annual fee. Rates are currently on the high side! (28.99% APR on my most recent statement.) Late and overpayment fees are $35. There fee for cash advances fluctuates but is not always existant.
Especially during my years of abusing credit cards, and even since, things sometimes go wrong. Contact with customer service is essential. Discover offers electronic interaction via their website and standard service by phone. Both are effective. However, as a Canadian cardholder, I sometimes encountered difficulties getting to an agent by phone upon being electronically prompted for my zip code.
As a rule, I found agents to be intelligent and helpful. Although, in my abusive days, they once left me stranded over a payment that had gotten lost in their system and meant that there was no available credit when there should have been. Overall, I find them receptive to removing fees and charges when warranted and generally helpful.
I have, from time to time challenged charges to my card and been promptly refunded.
This card is widely accepted throughout the US although, in my experience, not as widely as MC, Visa or even Amex. In other countries, not so much, if at all.... Walmart in Canada accepts it. Again as a Canadian, I occasionally experience difficulties at a US gas pump, when prompted for a zip code.
Cashback bonus currently offers a 1% cash credit at the end of each month redeemable upon reaching $50. They often offer promotions increasing that rate for certain types of purchases. For example, from July-September 2011, the cashback promotion (upon clicking a button to sign-up for it) is 5% for gas, hotels and movies. For me gas and hotels is quite significant! They often offer random cash prizes for using the cards. At the time of writing this review, a $1,000,000 prize is on the table.
Discover offers some very useful online tools including a spend analyzer which clearly demonstrates your spending habits to allow for prioritizing. They also offer a paydown, and a purchase planner. As their names indicate, both are useful in taking control of your financial situation. All reports are clearly and graphically presented as well as being downloadable.
A feature, that I often use is the secure online account number generator. This provides you with an artificial card number attached to your card. Discover's secure account numbers function enables you to shop on the Internet without disclosing your actual Discover Card Account number to merchants. The function provides you with a unique number (your "secure account number") that is only valid for purchases made with the merchant to whom you provide it. You have 0 liability in case of fraud when using this feature. Otherwise standard industry regulations are followed. Discover is good about contacting me via email and/or phone when suspect charges appear on my account. Overall, I find their security features to be top of the line.
When renting a car with Discover you are automatically covered for 25K. Not as good as my gold MC (65K), but something.
Other Perks Which I have not Tried
Other perks include Payment Protection, Wallet Protection, Identity Theft Protection, Credit ScoreTracker, Extended Warranty, Financial Planning Tools, DirectPay and Money Messenger. I cannot comment about them as I have not tried them.