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In a constantly changing financial market, it is often that we see companies rise and fall like the sun. Whether it is a small upstart company that eventually gets purchased by a mega conglomerate or a once powerful company tumble due to poor financial decisions, seeing new names and faces near the top of the market isn't rare. For Discover, starting from nothing and ending up as something - BIG - is their story in a nutshell.
We're going to take a look at the expansive and inspiring history of Discover, both as a credit card provider and as a company striving for growth. Who knows what you may "discover" about them...
Young Company, Big Aspirations
Discover is a fledgling financial service, but has risen up to be one of the stronger institutions in the country. A product of Sears, Dean Witter and later Morgan Stanley, it was turned into its own independent publicly traded company in 2007. Since then, Discover has slowly been acquiring subsidies. In 2008, Discover would purchase Diners Club, a charge card company from Citigroup that has been active in the credit card market since 1950, for $165 million. Diners Club, popular in the foreign markets, would merge with the Discover Network and create a large international network.
How Discover Built Its Name
While there had been many attempts to usurp or even compete with Mastercard and Visa, it had simply not been done by that point. However, the Discover Card offered something different. With no annual fee - a rarity at the time - a higher spending limit than similar cards, and what we know as "Rewards" (2% at the time) the card took national consumers by storm.
For retailers, there were lesser merchant fees. By 1993 though, Sears would sell off its financial services due to up and coming retailers like Wal-Mart. By 2004, Discover would compete with the big boys, Mastercard and Visa in the court room.
Discover claimed the two companies blocked companies from offering Discover cards if they also offered Mastercard and Visa. The court would rule in Discover's favor. This would lead to Discover acquiring PULSE - an electronic transfer company - in 2005. This would allow Discover to issue and market debit cards. Discover would partner up with Walmart and Sam's Club soon after.
Current Discover Cards
Unlike the major financial service institutions Visa, Mastercard, and American Express, Discover issues their cards directly. It is currently the fourth largest issuer of credit cards in the country. Currently, Discover offers four all-inclusive credit cards:
- Discover it® Cashback Match™: This Discover It card comes with 0% APR on both purchases and balance transfers for 14 months, making this the longest intro APR period for purchases of all Discover it cards. You will also earn 5% cash back on purchases up to $1,500 in popular rotating categories, and earn 1% cash back on all other purchases.
- Discover it® - 18 Month Balance Transfer Offer: This offers 0% APR for purchases for 6 months and 0% APR for balance transfers for 18 months. You will also earn 5% cash back on purchases up to $1,500 in popular rotating categories, and earn 1% cash back on all other purchases.
- Discover it® chrome: This Discover It card comes with 0% APR on both purchases and balance transfers for 12 months, and the ongoing interest rate is between 11.24%-23.24%. Earn 2% cash back on up to $1,000 in combined purchases each quarter at restaurants and gas stations, and 1% cash back on all other purchases.
- Discover it® for Students: Discover It for Students comes with 0% APR on purchases for 6 months and 10.99% APR on balance transfers for the first 6 months. Students will also earn 5% cash back on purchases up to $1,500 in popular rotating categories, and earn 1% cash back on all other purchases.
- Discover it® chrome for Students: This is a good card for students who are interested in earning points on purchases that don't rotate every quarter. Earn 2% cash back on up to $1,000 in combined purchases each quarter at restaurants and gas stations. Students will also enjoy 0% APR on purchases and 10.99% APR on balance transfers for 6 months.
*Check the terms and conditions for more information.
Former cards include Discover More, Discover Open Road, and Discover Miles. The Discover Card was once just an offering from Sears in the 1980's, but now it has a brand all its own. That just shows the power of growth and a good idea.
Currently, Discover Financial is led by David Nelms. The University of Florida and Harvard grad has been with Discover since 1998. In March of 2012, Discover announced $2 billion in share repurchases of its common stock. The company recently launched the Discover It card, which is supposed to revolutionize the rewards program that the provider once offered. This is a sign of great things to come. With a little more time and continual development, who knows what Discover can do.
*Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.
*The content in this article is accurate at the publishing date, and may be subject to changes per the card issuer.