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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
Terms apply to American Express benefits and offers. Visit americanexpress.com to learn more.
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.
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.
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 Platinum Card® from American Express does not charge foreign transaction fees (see rates and 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 restaurants (including takeout and delivery in the U.S.). 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. Keep in mind, unlike typical credit cards, the American Express® Gold Card only lets you carry a balance for certain charges—not all of them. The annual fee is $250 (see rates and fees).
Blue Cash Preferred® Card from American Express: Earn 300 back after you spend $3,000 in purchases on the Card within the first 6 months of Card Membership. You will receive cash back in the form of statement credits. The intro APR on purchases for 12 months from the date of account opening is 0%, then it becomes a variable APR of 14.74% to 24.74% (variable). 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 (after an introductory annual fee of $0 for the first year; see rates and fees).
Delta SkyMiles® Gold American Express Card: Earn 40,000 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 worldwide, including takeout and delivery in the U.S. and at U.S. supermarkets. You can also earn 1 mile per dollar on all other eligible purchases.
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.