Discover is a
credit card brand issued primarily in the United States. It was introduced by
Sears in 1985 and currently issued by
Capital One. Discover was the first credit card that did not charge an annual fee and offered a higher-than-normal credit limit. A subsequent innovation was "Cashback Bonus" on purchases.
Most cards with the Discover brand are issued by
Discover Bank, formerly the Greenwood Trust Company. Discover transactions are processed through the
Discover Network. In 2005, Discover Financial Services acquired
Pulse, an
electronic funds transfer
Electronic funds transfer (EFT) is the transfer of money from one bank account to another, either within a single financial institution or across multiple institutions, via computer-based systems.
The funds transfer process generally consists ...
network, allowing it to market and issue debit and ATM cards. In February 2006, Discover Financial Services announced that it would begin offering Discover
debit card
A debit card, also known as a check card or bank card, is a payment card that can be used in place of cash to make purchases. The card usually consists of the bank's name, a card number, the cardholder's name, and an expiration date, on either ...
s to other financial institutions, made possible by the acquisition of Pulse.
Discover is the third largest credit card brand in the U.S., with 60.6 million cardholders or about 8% of cards in circulation, placing it well behind
Visa (48%) and
Mastercard (36%), but slightly ahead of
American Express (7.5%).
History
At the time Discover was introduced, Sears was the largest retailer in the United States. It had purchased the
Dean Witter Reynolds brokerage organization and
Coldwell, Banker & Company (real estate) in 1981 as an attempt to add financial services to its portfolio of customer services. Ray Kennedy Sr., father of
country
A country is a distinct part of the world, such as a state, nation, or other political entity. When referring to a specific polity, the term "country" may refer to a sovereign state, state with limited recognition, constituent country, ...
singer
Ray Kennedy and the
credit manager for Sears, conceived the card.
[Whitburn, Joel (1996). ''The Billboard Book of Top 40 Country Hits'', p.173. .] After a trial period in 1985, starting with a $26.77 purchase at an Atlanta Sears on September 17,
the actual launch was pushed through by
Philip J. Purcell and
Mitchell M. Merin, the company's senior vice president for corporate administration and manager of financial analysis, respectively.
Together with the Discover Card (and its issuing bank, the Greenwood Trust Company, owned by Sears), this was named the Sears Financial Network. Early Discover Cards bore a small embossed symbol representing the
Sears Tower, then the company's headquarters.
Discover was part of
Dean Witter, and then
Morgan Stanley, until 2007, when
Discover Financial Services became an independent company. Novus was once the major processing center that partnered with the company. The Novus logo was retired, replaced by the Discover Network logo.

Unlike other attempts at creating a credit card to rival
MasterCard and
Visa, such as
Citibank's
Choice card, Discover gained a large national consumer base. It carried no annual fee, which was uncommon at the time, and offered a typically higher credit limit than similar cards. Cardholders could also earn a "Cashback Bonus", in which a percentage of the amount spent would be refunded to the account (from 1% to 5%), depending on how much the card was used. Discover was also noteworthy for being the only credit card accepted by the
U.S. Customs Service to pay
customs duty, effective February 19, 1987. Since it did not charge a percentage fee to retailers, unlike Visa, MasterCard, and American Express, Discover was also the only credit card accepted at
Sam's Club; the retailer has since started to accept MasterCard and American Express (see below). A 1989 study found that Discover had strong consumer adoption in the U.S.; the number of households with Discover cards increased by 2.1 million, or 14 percent, in 1989. In this same year, Discover also signed a restaurant in Delaware as its 1 millionth merchant in its payment network.
The plan to create a one-stop financial-services center in Sears stores was not as successful as Sears had hoped, and its promotion of Discover was thought both to hurt Sears turnover and to restrict the card's potential. Other retailers resisted it, as they were developing their own credit products and they believed they would be helping their competitor. Sears began to face difficulties in the late 1980s in light of these developments, and with strong competition both from
Walmart
Walmart Inc. (; formerly Wal-Mart Stores, Inc.) is an American multinational retail corporation that operates a chain of hypermarkets (also called supercenters), discount department stores, and grocery stores in the United States and 23 other ...
and from so-called
category killers such as
Toys "R" Us. Discover's introduction was costly; Sears's Discover credit card operations accounted for a loss of $22 million in the fourth quarter of 1986, and a loss of $25.8 million in the first quarter of 1987.
In 1993, Sears spun off its Dean Witter division into a new publicly-traded company, and began to accept MasterCard and Visa in addition to its store credit card and Discover. Discover became part of the Dean Witter financial services firm, and the new company was called Dean Witter, Discover & Co. In 1997, this company merged with Morgan Stanley to become Morgan Stanley Dean Witter, Discover & Co. In 1999, this company rebranded itself as
Discover Financial Services, Inc.
Discover Bank
The Greenwood Trust Company was founded in 1911 and is based in
Greenwood, Delaware. It was acquired by Discover Financial Services in 1985 and renamed Discover Bank in 2000. The original location of the Greenwood Trust Company on East Market Street in Greenwood is now the town hall and police station.
Global alliance
Starting around 2005, to increase acceptance around the world, Discover has formed several agreements with other payment networks internationally. This allows Discover cardholders to perform transactions while traveling abroad. Vice versa, cardholders of other countries may utilize their cards at U.S. merchants that accept Discover. Some major examples include:
*
Diners Club International worldwide
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BC Card in South Korea
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JCB in Japan
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RuPay in India
*
TROY
Troy (/; ; ) or Ilion (; ) was an ancient city located in present-day Hisarlik, Turkey. It is best known as the setting for the Greek mythology, Greek myth of the Trojan War. The archaeological site is open to the public as a tourist destina ...
in Turkey
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UnionPay in China
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Verve in Nigeria
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DinaCard in Serbia
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Elo in Brazil
* ATH in Puerto Rico
* Mercury throughout the Middle East
* NAPAS in Vietnam
* Prosa in Mexico
Currently, Discover is accepted in 185 countries.
Business developments

In October 2004, the
Supreme Court of the United States
The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all Federal tribunals in the United States, U.S. federal court cases, and over Stat ...
chose not to review a ruling in Discover's favor that challenged exclusionary policies of Visa and MasterCard, stating that MasterCard and Visa were violating antitrust regulations. Before this ruling, Visa and MasterCard would not allow banks to issue a Discover or American Express card if they issued a Visa or MasterCard. Within days of the court ruling, Discover filed a lawsuit in federal court seeking damages from Visa and MasterCard.
Shortly after the 2004 Supreme Court ruling, Discover struck its first deal to have its cards issued by another financial institution,
GE Consumer Finance, which began to issue credit cards for retailer
Walmart
Walmart Inc. (; formerly Wal-Mart Stores, Inc.) is an American multinational retail corporation that operates a chain of hypermarkets (also called supercenters), discount department stores, and grocery stores in the United States and 23 other ...
and its wholesale warehouse stores,
Sam's Club. Transactions were processed on the Discover Network. Sam's Club exclusively accepted Discover for many years; since November 2006, it has also accepted MasterCard for purchases. In April 2014, Walmart announced that they were ending their relationship with Discover and would begin converting all Discover-branded cards to
Mastercard beginning in June 2014.
HSBC
HSBC Holdings plc ( zh, t_hk=滙豐; initialism from its founding member The Hongkong and Shanghai Banking Corporation) is a British universal bank and financial services group headquartered in London, England, with historical and business li ...
has issued Discover-branded credit cards processed through the Discover Network since its acquisition of card issuer Metris in late 2005. Metris had originally signed an agreement with Discover in September 2005, three months prior to the HSBC acquisition.
In September 2012, Discover was ordered to pay over $200 million in fines and customer reimbursements to settle accusations by U.S. federal regulators that it had engaged in deceptive telemarketing tactics.
Acquisition by Capital One
On February 19, 2024,
Capital One announced that it would acquire Discover Financial Services in an all-stock transaction valued at $35.3 billion. If the deal is approved by regulators, the combined company will become the largest credit card issuer in the U.S. The deal has faced scrutiny from antitrust experts.
Advertising
From 1998 to 2007, Discover Card owned a billboard at
One Times Square, just above the flagpole where the
Times Square Ball is placed, until
Toshiba
is a Japanese multinational electronics company headquartered in Minato, Tokyo. Its diversified products and services include power, industrial and social infrastructure systems, elevators and escalators, electronic components, semiconductors ...
bought the space. As a result, its logo could be seen on national television during
New Year's Eve, while the ball dropped. Discover also sponsored the ball drop itself.
From its opening in 2001 to 2012,
Sugarloaf Mills Mall in
Lawrenceville, Georgia, was named Discover Mills in a
naming rights partnership with Discover Card. The slogan for the mall was "Where Discover Card is the Smart Choice". It was the first shopping mall to have granted naming rights to interested companies.
Since 2008, Discover has been the official credit-card partner of the
National Hockey League
The National Hockey League (NHL; , ''LNH'') is a professional ice hockey league in North America composed of 32 teams25 in the United States and 7 in Canada. The NHL is one of the major professional sports leagues in the United States and Cana ...
. As part of this deal, Discover offers team- and league-branded credit cards as well as a 10% discount on purchases made from the NHL's online store using Discover.
In 2024, actress
Jennifer Coolidge starred in Discover Card's television commercials.
See also
References
External links
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{{Sears Holdings
Credit cards in the United States
Sears Holdings brands
Products introduced in 1985
Products and services discontinued in 2025
Discover Financial