Credit Card Shakeup: Capital One Reportedly Set To Acquire Discover

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Do you have a rewards credit card issued by Discover Financial?

You may have some changes coming your way soon.

The Wall Street Journal recently reported that Capital One plans to acquire Discover Financial. This deal, should it go through, will merge two of the largest credit card issuers in America. An official announcement is still pending.

This almost certainly will have a long-term impact on Discover customers, but it may also have some impact on existing Capital One customers and the credit card market as a whole as well.

Let’s take a little deeper look at what this could mean while we wait for more official details.

How This Could Impact Discover Credit Card Customers

If you have a Discover credit card in your wallet, this news may have you concerned about how things will work going forward.

It’s still too early to make any definitive statements. But it does seem, at least initially, that you’ll be able to keep your same credit card and use it on the same card network. (Of course, Capital One could reveal some plans for making changes to the existing line of credit cards in the weeks ahead.)

Discover’s big pitch to credit card customers is its lack of fees. There are no annual fees for any of its credit cards.

This is true for the Discover it® Cash Back (ranked among our best cash back credit cards), Discover it® Student Cash Back (our pick as top credit card for students) and Discover it® Miles (ranked among our best travel credit cards).

Will this continue under Capital One’s control?


Capital One also has a lengthy list of no-annual-fee credit cards, so it would stand to reason that they’re open to keeping that type of card in their portfolio.

I’m interested to see if Capital One plans to continue Discover’s “Cash Back Match” promotion. This allows consumers to double the amount of cash back or miles they earn in the first year of card membership. It helps rank the Discover it® among the cards with the best welcome bonus offers.

And what’s even less clear is what this acquisition means for customers who also use Discover’s banking products.

In addition to its credit cards, Discover also offers online banking. Some of the more popular options are a no-fee checking account that awards 1% back on all debit card purchases and a high-yield savings account that pays customers 4.35% APR.

But Capital One, which is the ninth largest U.S. bank prior to this transaction, has its own banking policies that could ultimately supersede these post-acquisition.

Capital One Credit Card Customers May Be Impacted As Well

Did you know that Discover has its own card network for payment processing?

Most credit cards, including those issued by Capital One, use either Visa or Mastercard for transaction processing. But that may change for some Capital One customers after this acquisition.

According to the Wall Street Journal report, Capital One is prepared to “switch at least some of its cards to the Discover network, while continuing to use Visa and Mastercard on others.”

There are not yet reported details on which credit cards could be impacted by that change.

Card networks set the fees that merchants pay when consumers make a purchase using a credit card. Gaining access to the Discover payment processing network could help Capital One control costs on a per transaction basis.


This could impact card usage internationally, where Discover’s card network is not as widely accepted as Visa or Mastercard.

What do you think about this new development in the credit card industry? We’d love to hear your opinion in the community.

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