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 quite work 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 and Mastercard.

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.

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 3.6 billion Visa cards in use and more than 70 million merchant locations.

Discover boasts that their cards are accepted at more than 95 percent of places in the U.S., but the Discover coverage map shows huge gaps in global acceptance in Africa, the Middle East and Eastern Europe. In comparison to Visa, Discover cards are accepted at more than 48 million locations.

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.

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.

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 the bottom-tier Visa cards come with benefits like 24/7 customer service, roadside dispatch, an auto rental collision damage waiver, 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 intriguing 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 top-tier credit cards like the Chase Sapphire Reserve®, which comes with a $550 annual fee.

Welcome offer winner: Depends

The welcome offer winner depends on the card. Most Visa credit cards come with generous sign-up 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 sign-up bonuses; they offer Cashback Match for the first 12 months.

Let’s take a look at the previously-mentioned Visa card examples. Chase Freedom Unlimited allows new cardholders to earn an additional 1.5 percent cash back on top of all purchases’ original cash back rate (on up to $20,000) for the first year (offer through Bankrate), a potential value of up to $300 in cash back. The Chase Sapphire Reserve, on the other hand, offers new cardholders 60,000 points after spending $4,000 on purchases within the first three months—a $900 value.

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 cash back. Thus, 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 sign-up bonus of $200 to $300. There are also no spending thresholds to meet with Discover cards, making it easier to earn the bonus.

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 sign-up 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 grocery shopping. And then there are Visa cards that let you earn points for travel or rewards in a flexible program like Chase Ultimate Rewards, which allows some Chase cardholders to receive a 25 percent to 50 percent points boost when redeeming points for travel through Ultimate Rewards.

As for rewards, there are numerous Discover credit cards that offer rewards. 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. Or, maybe you want to earn travel rewards with the Discover it® Miles, which offers an unlimited 1.5X miles on all purchases.

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.

Why should you choose Visa?

Visa credit cards tend to be a good option if you have good to excellent credit and you want to earn rewards. They can help you to earn cash back on all of your spending, as well as travel rewards or flexible points you can spend in more than one way.

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. Plus, these types of benefits can more than recoup any annual fees for Visa cards.

You may also want to consider Visa if you travel internationally often and want a credit card with the broadest level of global acceptance possible. Just make sure you pick a Visa credit card with no foreign transaction fees.

Why should you choose Discover?

There are plenty of reasons to choose Discover cards over Visa cards, including the fact that their cards come with no annual fee and no foreign transaction fees. While Discover cards don’t come with a traditional sign-up bonus, Discover will double all rewards you earn after the first year through its Cashback Match program—which offers serious cash back rewards potential.

Discover credit cards also come with credit-building and protection tools like a free FICO score on your monthly statement, free Social Security number alerts and free overnight card shipping. Plus, many Discover cards will not charge you a late payment fee for your first late payment (After that, up to $41).

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.