Discover credit cards are accepted nationwide at around 99% of places that accept credit cards, according to Discover's website. But that wasn't always the case. In fact, not too long ago, it wasn't uncommon to encounter retailers, restaurants, and grocery stores that wouldn't take a Discover credit card, mainly because its processing fees were higher than competing issuers, like Mastercard and Visa. And while Discover cards enjoy much better acceptance rates today, there are still places that don't accept them. Like these three.
1. Costco
Costco only accepts Visa credit cards at its warehouses. However, if you order from Costco through Uber Eats or Instacart, you can charge the purchase to Discover. Ordering Costco online could be more expensive, as you'll pay delivery, processing fees, tip to the driver, and a markup on Costco's goods. But if you're keen on using your Discover card to buy your Costco groceries, these delivery apps could make it work.
2. Some local businesses
Some local businesses and restaurants -- that is, those that aren't franchised or part of national brands -- won't accept Discover credit cards, mainly because the processing fees are slightly higher than Mastercard and Visa. For example, whereas Visa charges 1.79% (plus $0.08) per in-person transaction, Discover charges 2.05% (plus $0.08). Because many small businesses have narrow profit margins to begin with, a 0.26% difference in processing fees is certainly enough to refuse the more expensive credit card.
This is changing, however. Many small businesses now rely on payment processors like Stripe and Square, which accept Discover. Others have added Discover to their credit card acceptance list to keep up with its popularity.
To be sure, I still find myself in situations in which a local business doesn't accept my Discover credit card. Recently, in fact, my Discover was refused twice in the same day. First, it was from the parking meter, which accepted everything but Discover, then it was a merchant selling vegetables at a farmers market.
Sometimes, you'll even find merchants online who don't take Discover. For example, the Nintendo eshop only accepts Mastercard and Visa. In this case, as with most online purchases, I can get around this by using Google Pay or PayPal, as you can add your Discover card to both and pay that way.
3. Most places abroad
If you're traveling outside the U.S., don't rely on being able to use your Discover credit card to make purchases. While Discover may have grown its presence among U.S. businesses, abroad it still has work to do. As someone who travels frequently outside the U.S., I can testify to its sparse coverage in comparison to Visa and Mastercard.
That said, I believe Discover is expanding its international presence. It's not as rare as it used to be to find merchants in big cities, like London and Berlin, accepting Discover as a method of payment, even less rare where American tourists tend to frequent the most. Even if the merchant only displays Mastercard and Visa as accepted methods, it's worth asking if they take Discover, as sometimes they're able to even if they don't advertise it.
At any rate, I would still have a Visa or Mastercard in your wallet, just in case. Although Discover has improved its acceptance rate over the years, it's not yet as widely accepted as those two card issuers. And although I love my Discover credit card, it's not the best for every purchase. For that reason, it's prudent to have more than one great credit card, not only to guarantee you'll have one that's accepted, but also to get the most rewards on every purchase.
