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In this article:
- What Do Credit Card Issuers and Payment Networks Do?
- Why Does a Card’s Payment Network and Issuer Matter?
- Where Discover and Amex Cards Are Accepted
- Why You Might Want to Use Discover or Amex Cards
- Drawbacks to Using Discover and Amex Cards
- American Express Cards to Consider
- Discover Cards to Consider
- Higher Credit Scores Can Help You Get the Best Cards
Some credit card seekers may shy away from American Express and Discover cards due to the belief that they aren't as widely accepted as Visa or Mastercard. While this used to be true, Discover and American Express now boast near-universal merchant acceptance. In early 2020, a Nilson Report study found that 99% of places in the U.S. that allow payment by credit card now accept their cards.
If this increased acceptance rate makes these cards more appealing, here are some of the things you should know about Amex and Discover—and a few of the best rewards cards each offers.
What Do Credit Card Issuers and Payment Networks Do?
To understand how credit cards work, it's important to recognize the difference between a credit card issuer and a credit card network. An issuer is a financial institution (Bank of America, for instance) that backs your credit card; it's also the organization that manages your bill and other aspects of the card (such as rewards). A credit card network processes transactions between merchants and the financial institution, basically making it possible for customers to use their credit cards to pay for purchases.
The four major credit card networks in the U.S. are Mastercard, Visa, American Express and Discover. Mastercard and Visa only serve as networks and don't issue their own cards. Amex and Discover, on the other hand, issue their own credit cards in addition to being credit card networks that process payments. American Express partners with a few other banks, including Wells Fargo, to offer credit cards through them as well.
If that sounds confusing, grab one of the rewards credit cards in your wallet. Let's say you have the Southwest Rapid Rewards® Priority Credit Card. If you look at the card, you will see that it is issued by the financial institution Chase and participates in the Visa credit card network. It is also part of Southwest Airlines' Rapid Rewards points program, but that doesn't really make a difference to where it is accepted (it's just a way to help customers rack up points toward rewards travel).
Why Does a Card's Payment Network and Issuer Matter?
When opening a new credit card or deciding whether to continue carrying one you already have, it's crucial to consider both the bank that issues it and the network it is part of. That's because each issuer will offer different types of rewards and other cardholder benefits, such as cash back on purchases, or perks through travel partners including airlines or hotels.
You should choose a card that earns the types of rewards points or miles that you will be able to get the most use out of. For instance, Citi is one of the issuers for American Airlines' AAdvantage mileage rewards program cards, while American Express issues cards that earn Delta SkyMiles. So if you fly American more than Delta, you might want to pick up one of Citi's cards, and vice versa.
Likewise, you should be aware of the network a credit card is part of because each network provides different cardholder benefits, such as purchase protection or rental car insurance, depending on the specific card you carry. The other major difference between credit card networks is in the number of places or businesses where they are accepted. That's mainly because of the processing fees that credit card networks charge merchants for transactions.
For a long time, Visa and Mastercard charged lower fees than American Express and Discover, which meant merchants tended to gravitate toward those payment networks. In the past few years, however, Amex and Discover have both made changes that have lowered the cost for small businesses to accept their cards for transactions. As a result, Amex and Discover cards are now accepted at more places than ever.
Where Discover and Amex Cards Are Accepted
Both American Express and Discover have been quick to point out to their existing cardholders as well as folks thinking about applying for a new credit card that the old perceptions about their cards not being as widely accepted as those from Visa and Mastercard have become outdated.
Discover now notes on its website that its cards are accepted at 99% of places nationwide that take credit cards. Plus, they can be used at banks, credit unions and ATMs for cash advances and certain stores, such as some grocery outlets, to withdraw cash over and above the price of your purchase.
American Express as well has made a big push in the past few years to get its acceptance to close to the level of Visa and Mastercard, and it looks to have accomplished that goal—99% of places in the U.S. that take credit cards now accept American Express.
These increased acceptance rates mean you can now shop with confidence. But if there's any doubt, many businesses display decals on their doors or registers noting which payment networks they accept. This makes it easier for you to know whether you can use your credit cards to pay for purchases there. These stickers may not be accurate, however, so the best way to know if a merchant or business accepts your credit card is simply to ask directly.
Why You Might Want to Use Discover or Amex Cards
Using a credit card instead of cash can be a great way to protect your purchases finances from theft and easily earn rewards points toward travel, or cash back for statement credits that can save you money. Both American Express and Discover offer some excellent credit cards with a variety of rewards that many people might find useful. Not only that, but some of their cards field valuable welcome offers and low introductory interest rates in case you need to carry a balance.
For instance, the Discover it® Cash Back currently offers a 0% intro APR on purchases and balance transfers for 14 months (with an 11.99% - 22.99% Variable APR APR after that). It earns 5% cash back on rotating categories up to a quarterly maximum when activated, plus 1% cash back on all other eligible purchases. Not only that, but for new cardholders, Discover will automatically match all the cash back you've earned at the end of your first year with no minimum spending or maximum rewards. The card doesn't charge foreign transaction fees if you use it to make purchases abroad, and cardholders can access their FICO® credit score for free.
Drawbacks to Using Discover and Amex Cards
There are two major issues that folks might have with using Discover or Amex cards. The biggest is that cards in either network are still not as widely accepted internationally as those from Visa and Mastercard. So if you travel abroad frequently, you might not be able to use your card at certain businesses. However, both Amex and Discover are working to improve that.
Discover has increased its international acceptance with the Discover Global Network, which partners with different payment networks in other countries, including Diners Club International, Pulse and over a dozen other entities. Travelers can use this map to learn more about Discover's international acceptance. According to its most recent investor information, American Express claims its cards are accepted in 170 countries and territories. While impressive, it's still lower than Mastercard's claim of acceptance in 210 countries.
The other thing to look out for are foreign transaction fees. Some cards incur these annoying charges when you use them to make purchases outside the U.S. Discover cards do not charge foreign transaction fees, but some American Express cards do, so it's important to look at your specific card's benefits before using it on a trip. For example, the popular Platinum Card® from American Express does not charge foreign transaction fees; however, the Amex EveryDay® Preferred Credit Card charges a 2.7% foreign transaction fee. That might seem small, but it can add up over the course of a trip.
American Express Cards to Consider
American Express has one of the most diverse stables of rewards credit cards available. Which one might be right for you will depend on what types of rewards you want to rack up, the annual fee you are willing to pay, and where you tend to shop the most. That said, here are three great cards to consider at the moment. Terms apply to American Express benefits and offers.
American Express® Gold Card: Earn 60,000 Membership Rewards points after you spend $4,000 on purchases on your new card in your first 6 months of card membership. Among other rewards earning opportunities, you'll earn 4 points per dollar at U.S. supermarkets on up to $25,000 per calendar year in purchases (then 1 point per dollar), and 4 points per dollar on restaurant spending worldwide, including takeout and delivery. Enroll to earn up to a total of $10 in statement credits monthly when you pay with your card at Grubhub, Seamless, The Cheesecake Factory, Ruth's Chris Steak House, Boxed and participating Shake Shack locations. Select one qualifying airline and then receive up to $100 in statement credits per calendar year when charging incidental fees like checked bags and in-flight refreshments to your card (this benefit ends December 31, 2021). The annual fee is $250.
Blue Cash Preferred® Card from American Express: Earn $250 back in the form of a statement credit after you spend $1,000 in purchases on your new card in your first 3 months. The intro APR on purchases for 12 months from the date of account opening is 0%, then it becomes a variable APR of 13.99% to 23.99%. The card earns 6% cash back at U.S. supermarkets on up to $6,000 per year in purchases, then 1%. It also earns 6% cash back on select U.S. streaming subscriptions and 3% back at U.S. gas stations, and on transit including taxis, rideshares, parking, tolls, trains, buses and more. Earn 1% cash back on other purchases. The annual fee is $95.
Delta SkyMiles® Gold American Express Card: Earn 35,0000 bonus miles after spending $1,000 in purchase on your new card in your first 3 months of card membership. Earn 2 miles per dollar spent at restaurants including takeout and delivery worldwide and at U.S. supermarkets as well as on eligible purchases made directly with Delta. Enjoy your first checked bag free on Delta flights and earn a $100 Delta flight credit after spending $10,000 in purchases on your card in a calendar year. There is a $0 intro annual fee for the first year, then $99 thereafter.
Discover Cards to Consider
While not as wide-ranging as Amex's roster of cards, Discover still offers some fantastic options. Here are the top two.
Discover it® Cash Back: For new cardholders, Discover will automatically match all the cash back you earn at the end of your first year. The card earns 5% back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, gas stations and others, then 1% cash back on other purchases. Rewards categories have a quarterly maximum and require activation. There is no annual fee, and the card is offering 0% intro APR on purchases and balance transfers for the first 14 months. After that, the APR will be between 11.99% to 22.99% variable.
Discover it® Miles: This card is also offering 0% intro APR on purchases for the first 14 months and 10.99% intro APR on balance transfers. After that, it goes up to 11.99% to 22.99% variable. There is no annual fee, and Discover will match all the miles new cardholders earn in the first year. For instance, if you earn 25,000 miles through spending, Discover will match it with another 25,000 miles. The card earns unlimited 1.5 miles per dollar on all purchases with no maximum. Miles can be redeemed as a statement credit for travel purchases or cash.
Higher Credit Scores Can Help You Get the Best Cards
While Mastercard and Visa credit cards have long been accepted much more widely than their competitors from American Express and Discover, that has changed a lot lately. Both Amex and Discover cards are now accepted at 99% of places that take credit cards in the U.S., and both networks are working hard to expand their acceptance rates in other countries too. That makes it easier for cardholders to use their cards both at home and abroad, but it also means that there are a lot more choices for great rewards cards out there since using them is no longer much of an issue when it comes to where you shop. For more information on credit cards and to see current offers, you can pull up personalized options through Experian CreditMatchTM.
All information about the Amex EveryDay® Preferred Credit Card has been collected independently by Experian and has not been reviewed or provided by the issuer of the card.