Discover credit cards range from secured cards for bad credit to some of the best rewards cards for people with good credit or better. However, there are some major mistakes that people commonly make with Discover credit cards that could end up costing you money if you’re not careful.
Forgetting to Sign Up for New Bonus Categories
Some Discover credit cards have a rewards structure where cardholders can earn bonus rewards in different categories that rotate every quarter. These categories have included things like grocery stores, gas stations, wholesale clubs, streaming services, restaurants and more.
The catch is that you need to activate your card’s bonus categories each quarter through Discover’s website in order to earn the bonus rewards rate. Keep in mind that if you wait until late in the quarter to activate, you won’t retroactively get the bonus rate on purchases you’ve already made. Therefore, you should activate as soon as possible.
Forgetting About the First-Year Bonus
All Discover credit cards have a special first-year bonus. It’s called “Cashback Match®” or “Discover Match®” on cards that don’t offer cash rewards. As the name suggests, Discover will match all of the rewards you earn during the first year at the end of that year. So if you earn $500 in cash back during the year, for example, you’ll get another $500 in cash back at the end of the year.
Therefore, there’s a big incentive to use your card frequently during the first year, because the size of your bonus increases with every dollar you spend. Just don’t let that entice you to overspend. It’s also important to note that it can take up to two billing periods after your account anniversary for your matched rewards to appear in your account.
Assuming There’s No Penalty for Paying Late
Discover credit cards do not have a penalty APR for late payments, and they will not charge you a fee the first time you pay late. However, any subsequent payments will incur expensive late fees.
There are also other ways that paying late hurts you. It can lead to credit score damage, and it will cause you to lose your card’s grace period, which means interest will start accruing on new purchases right away. In fact, the only way to not lose your grace period is to pay your bill on time and in full.
Making It Your Primary Card for Traveling Abroad
Although Discover credit cards do not charge foreign transaction fees, Discover also has less international acceptance than Mastercard and Visa credit cards do. You don’t want to find yourself in a foreign destination without an easy way to make purchases, so it’s best to have a no foreign transaction fee credit card on the Visa or Mastercard network, too.
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