How is Discover different from a Visa or a MasterCard?
Each of those is a network. Merchants displaying their logos - participate in their network and will accept cards that bear the same logo. Most merchants participate in more than one network. Discover is mostly used in the US, while Visa, Mastercard and American Express are more widely spread in the world (Amex less, Visa and MC are much more widely spread). In addition to being widely spread in the US, Discover is accepted everywhere where UnionPay is accepted (mostly in China) and Diners Club (mostly in EMEA). Advantages/disadvantages? You'll have to compare specific cards, but if you're a traveler in the world - then Discover will probably not be as appealing as Visa or Mastercard. From the business side of credit cards, Discover and American Express carry their own risk. AmEx has lent their logo to banks such as Bank of America (BofA) to use the AmEx transaction network, but the financial risk and customer service is provided by BofA. Visa and MasterCard let banks use their logo and process through their respective networks for a fee. The financial risk of fraud, non-payment from merchants, etc is the risk that the individual banks carry.
I guess it depends on your bank. My bank (Rabobank) recently did introduce this feature. You don't get a card per category, though. Instead you set up rules to match each expenditure to one of the existing pots. "As others have stated, credit (signature required) is processed through their respective networks (Visa, MasterCard, Discover, or American Express). A ""debit"" card tied to your checking account, still go through the same credit network even though the funds are guaranteed from your checking rather than a free loan 30-60 days which has the potential to be unpaid. This type of debit card purchase may be eligible for a lower processing rate for less risk. Debit cards can also be processed through the debit network (PIN required, no signature). This is typically a straight fee such as $0.35.  Fees vary, but let me give you a simple comparison: Say you are at the supermarket and buy $50 worth of groceries with a debit card with Visa logo. You are asked ""credit"" or ""debit"": At my supermarket, this is why I am given the option to enter my PIN first. If I want to pay by credit, I have to tap Cancel to process via credit signature." "you could get a discover card and then just ""freeze"" it.  you might need to unfreeze it for a few minutes when you sign up for a new service, but it is unlikely an ongoing subscription would process a charge in that window. i believe merchants are charged a small fee for a transaction even if it is declined, so they won't try constantly forever. discover account freeze faq capitalone offers this freeze feature on their ""360"" debit cards. you can even freeze and unfreeze your card from their mobile app. this feature is becoming more common at small banks and credit unions too. i know of 2 small local banks that offer it. in fact, almost any bank can give you a debit card, then set the daily POS limit to 0$, effectively making it an atm-only card. but you may need to call the bank to get that limit temporarily lifted whenever you want to sign up for a new service. alternatively, jejorda2's suggestion of virtual account numbers is a good idea. several banks (including discover) have discontinued that feature, but i believe citi, and boa still offer them. side notes:" In my experience dealing with credit cards and store cards, you may find that the store card is much more flexible than the credit card in terms of the enforcement of the card agreement.  For instance, I've missed payments on credit cards and only been 1 day late and saw a rate increase, but on a store card when the same thing happened, it was like they didn't even notice.  Granted, this was a 100% store card with no VISA/MC logo on it, and it was through their bank. This may not be true of all store cards and your experience may differ, but I felt like the store card was more of a tool for acquiring the merchandise and helping the store make a sale than it was for some big bank to make money off of my interest. With credit cards, you are the product, and the bank makes money purely from interest. The store, on the other hand, makes money from selling the product, and credit helps increase sales. My suggestion is to avoid credit altogether as all debt is risk, but if you must use credit, you may have a better experience with the store card. Of course, don't forget to consider the interest rates, payment plan, and other fees that may apply as they may affect your decision in terms of which to go with. Back when they started, Discover undercut Visa and Amex fees by about a point. This was also true when I worked for a mail-order computer retailer in the '90s: if a customer asked us which credit cards we took, we were told to list Discover first (and AmEx last) because Discover had the lowest merchant charges. Possibly this is no longer true today, but for quite a while it was a significant selling point of the Discover card to merchants, and a reason why many did sign on. (A reason some stores did not sign on was that Discover was owned by Sears, and many businesses that competed with Sears didn't like the idea of sending any of their profits to the competition.) Today, Discover also owns Diners Club and the fees for those cards are higher. The truth is that Visa does not require a merchant to enter the cvv number before authorizing a transaction.  The only information that is really needed is the credit card number and expiration date. Chip and Pin cards are popular in Europe, however in the US we don't have them.  Visa/MC and Amex can issue chip and pin cards but no merchants or machines are set up here to take them.  Only certain countries in Europe use them and since you could possibly have a US visitor or a non-chip and pin person using your machine or eating at your restaurant they usually allow you to sign or just omit the pin if the card doesn't have a chip. It is definitely less secure, but the entire credit card industry in the US is running right now without it, so I don't think the major credit card companies care too much (they just pass the fraud on to the merchants anyway). "These days, just about any bank has the ability to schedule payments for free.  I usually use this.  My wife has a Chase MasterCard, because they used to automatically credit the 1% cash back monthly.  Now they ""improved"" the card, and you need to go online and redeem the rewards, either in $20 increments, or to pay off a previous purchase, which seems to be a real gimmick.  They probably get back the 1% cash back for that purchase if you use this feature.  Weird people." Per their merchant agreements, Visa and MasterCard say that the signature on the back of the card is the proper way to identify the card holder.  If a card is not signed, the merchant is supposed to check your ID and make you sign the card before accepting it for payment.  Merchants are not allowed the require an ID for paying with a signed card. Of course, store employees rarely know all these things.  Some will gladly accept an unsigned card.  Some will try to make you show your ID. One reason why some merchants in the US don't accept Discover is that the fee the store is charged is higher than the average. Generally a portion of transaction fee for the network and the issuing bank goes to the rewards program. In some cases a portion of the interest can also be used to fund these programs. Some cards will give you more points when you carry a balance from one month to the next. Therefore encouraging consumers to have interest charges. This portion of the program will be funded from the interest charges. Profits: Rewards: Some rewards are almost always redeemed: cash once the amount of charges gets above a minimum threshold. Some are almost never redeemed: miles with high requirements and tough blackout periods.  Credit cards that don't understand how their customers will use their cards can run into problems. If they offer a great rewards program that encourages use, but pays too high a percentage of points earned can lead to problems. This is especially true when a great percentage of users pay in full each month. This hurt Citibank in the 1990's. They had a card with no annual fee forever, and a very high percentage never had to pay interest. People flocked to the card, and kept it as an emergency card, because they knew it would never have a annual fee. You can check your score through your discover card account (only credit card)  2 month difference   Nothing has changed. Have gone about regular business with no dramatic increase in spending  I'm 21 and I'm almost exactly a year into my first card The only card I've seen offer this on credit card purchases is Discover.  I think they have a special deal with the stores so that the cash-over amount is not included in the percentage-fee the merchant pays.  (The cash part shows up broken-out from the purchase amount on the statement--if this was purely something the store did on its own without some collaboration with Discover that would not happen). The first few times I've seen the offer, I assumed it would be treated like a cash-advance (high APR, immediate interest with no grace period, etc.), but it is not.  It is treated like a purchase. You have no interest charge if you pay in full during the grace period, and no transaction fee.  Now I very rarely go to the ATM. What is in it for Discover?  They have a higher balance to charge you interest on if you ever fail to pay in full before the grace period.  And Discover doesn't have any debit/pin option that I know of, so no concern of cannibalizing their other business.  And happier customers. What is in it for the grocer?  Happier customers, and they need to have the armored car come around less often and spend less time counting drawers internally. http://www.andrewsfcu.org/ is one of the only US financial institutions to issue a low or no annual fee chip and pin visa or mastercard.. Andrews is primarily for civilian employees of the Andrews Air Force Base but is available to members of the American Consumer Council, which offers free membership, see http://www.andrewsfcu.org/page.php?page=330 .  The chip and pin card is a visa with $0 annual fee and charges a 1% foreign transaction fee. Getting one is modestly difficult because you have to first join the credit union then apply for the card, then go through underwriting as if it were a personal loan rather than a revolving credit account.  Still, for travelers, it is probably worth it. "In the end, all these fees hurt the average consumer, since the merchant ultimately passes cost to consumer. Savvy consumers can stay at par or get ahead, if they put in the effort. It's a pain, but I rotate between 4 cards depending on time of year and type of purchase, to optimize cash back. My cards are:  1. 5% rewards card on certain categories, rotates each quarter 2. 2% travel/dining card (fee card, but I travel a bunch so it's worth it, no foreign transaction fees) 3. 1.5% rewards card for everything else 4. Debit card (swiped as a CC) for small purchases (i.e. lunches) at credit union for ""enhanced"" high interest checking account, requiring certain # swipes/month. This alone returns to me ~$800/yr." From experience, Mastercard and Visa charge vendors about the same (around 2%-5%) while American Express and Diners Club are astonishingly expensive (6%-10%) and you'll find that few small retailers are very comfortable accepting these. The variation comes from the volume of trade that vendors provide.  A big retailer will negotiate a very low rate while smaller businesses will be hit with higher charges.