topic Re: What will happen to Capital One and Discover cards? in Credit Cards

What will happen to Capital One and Discover cards?

BijouMan — Tue, 20 Feb 2024 04:21:35 GMT

Today, the news came out that Capital One will be buying Discover Financial Services. The company has not stated what will happen to any of your Capital One or Discover cards, so what exactly will happen to them? Capital One already uses Visa and Mastercard for its own products, and now it is about to own a card network, so will the company give up Visa and Mastercard or will it somehow remain partnered with them while also issuing cards through its own network? Giving up Visa and Mastercard would mean that the cards would no longer be widely usable outside the United States, which would be contradictory to Capital One's travel offerings.

Re: What will happen to Capital One and Discover cards?

Remedios — Tue, 20 Feb 2024 04:23:42 GMT

Well, what it means is that there will be plenty of $300 Discover One for good credit at 97% interest, no CLIs unless one offers them firstborn, and everyone will have to call every few weeks to promise they do intend to use their card "Plz don't lower my limit"

Network..that's barely relevant. When Cap One acquires portfolio, they bring it into their fold, they don't adjust based on "how it was", they've always done things Cap One way.

But yeah, sucks if/when it happens. Shrugies all around

Re: What will happen to Capital One and Discover cards?

Anonymous — Tue, 20 Feb 2024 04:24:54 GMT

@BijouMan wrote:
Today, the news came out that Capital One will be buying Discover Financial Services. The company has not stated what will happen to any of your Capital One or Discover cards, so what exactly will happen to them? Capital One already uses Visa and Mastercard for its own products, and now it is about to own a card network, so will the company give up Visa and Mastercard or will it somehow remain partnered with them while issuing cards through its own network? Giving up Visa and Mastercard would mean that the cards would no longer be widely usable outside the United States, which would be contradictory to Capital One's travel offerings.

The WSJ article linked in another thread stated (but who knows with what reliability) that some cards would transition to Discover but others would stay with V/MC, at least partly because of acceptance outside the US.

So, taking a wild guess, the "true" travel cards, Venture X and maybe Venture will likely stay as they are, ones less linked to international travel, such as Savor and Quicksilver, might move to Discover, and their store-brand ones would also be an obvious choice for moving to discover.

While the above is absolutely true as of now, Richard Fairbanks might change things just to annoy me. I used the EO a little too much in my youth!

Re: What will happen to Capital One and Discover cards?

1LostArk — Tue, 20 Feb 2024 05:01:05 GMT

What would the logic be for moving C1 products from V/MC to Discover? I'd probably take the Savor One off my wish list if it was on a less accepted Network.

Edit: Nevermind, more swpe fee profit for C1 if they own their card network, plus more detailed transaction data?

Re: What will happen to Capital One and Discover cards?

Zoostation1 — Tue, 20 Feb 2024 05:06:22 GMT

I could see debit cards being one of the first things to go to Discover. Overall in terms of what cards stay on Visa/MC and what cards move that's tough to predict, but I'll give it a shot.

VX - very likely stays Visa

Venture - very likely stays Visa

Savor/SavorOne - somewhat likely stays MC

VentureOne - somewhat likely stays MC

QS - likely moves to Discover

QS1 - likely moves to Discover

Plat - likely moves to Discover

Co-brand cards - Kohls likely stays Visa, other existing stay MC for but potentially go to Discover upon contract renewal, new co-brands go to Discover.

Debit cards - likely move to Discover

Re: What will happen to Capital One and Discover cards?

Anonymous — Tue, 20 Feb 2024 05:21:25 GMT

@Zoostation1 wrote:
I could see debit cards being one of the first things to go to Discover. Overall in terms of what cards stay on Visa/MC and what cards move that's tough to predict, but I'll give it a shot.

VX - very likely stays Visa
Venture - very likely stays Visa
Savor/SavorOne - somewhat likely stays MC
VentureOne - somewhat likely stays MC
QS - likely moves to Discover
QS1 - likely moves to Discover
Plat - likely moves to Discover
Co-brand cards - Kohls likely stays Visa, other existing stay MC for but potentially go to Discover upon contract renewal, new co-brands go to Discover.
Debit cards - likely move to Discover

Remember, once they own the Discover network, the default financial decision is to eventually move everything to it, to save fees and to mine data. So, from that view, people who own the individual credit card lines would have to have an argument for not moving at some point. International acceptance would be a very good one for those cards with a large international spend (none of the major travel cards loved here are on Discover, though some are on Amex). So I would certainly put the Savor cards as move-to-Discover candidates. None of this would happen that quickly, obviously moving has a big ramp up cost, but the ongoing savings and valueable data will make the C-suite happy.

ETA: there is also a viewpoint shift. Today Cap One pays fees to Visa and M/C as the cost of doing business. Once they own a payment network, these are fees to their competitors, which is much less attractive

Re: What will happen to Capital One and Discover cards?

1LostArk — Tue, 20 Feb 2024 05:22:02 GMT

I was just about to close my bucketed C1 Platinum, but I wonder if they switch the card network if that might un-bucket it. Guess I'll keep it open just in case?

Re: What will happen to Capital One and Discover cards?

ptatohed — Tue, 20 Feb 2024 05:37:24 GMT

I think all this speculating is too premature. We don't even know if the deal will pass regulatory scrutiny.

Re: What will happen to Capital One and Discover cards?

MJ-san — Tue, 20 Feb 2024 07:01:35 GMT

One little thing not talked about yet... Discover owns Diners Club. Overseas, DC is widely accepted especially around travel, but also a decent amount of retail (Europe, Israel, Japan especially). I was able to use a Discover card at a department store that accepted Diners Club in Switzerland - no FTF

I'm sure it is a small piece of the whole puzzle, but I'd hate to be an exec at Visa or MasterCard having to game out what happens next when my 3rd largest competitor merges with my 5th or 6th largest partner/customer.

Re: What will happen to Capital One and Discover cards?

coldfusion — Tue, 20 Feb 2024 12:37:56 GMT

Picturing Discover cards with 3 hard pulls and $100 CLIs....ugh.

Re: What will happen to Capital One and Discover cards?

krmurrayjr10 — Tue, 20 Feb 2024 12:39:58 GMT

I think it's worth taking an even broader view of the credit card market globally.

Obviously, Visa and MC have dominated the business worldwide for a long time. Discover has had a winding course to its current position, having been born within Sears before eventually becoming independent. Its management has, however, made some shrewd decisions over the years to remain competitive, and those decisions include the acquisition of Diners Club from Citi and the interoperability agreements with nation-specific payment systems, such as China's Union Pay.

I think today's political circumstances are likely to bring some upheaval that will lessen Visa and MC's domination of the global payments market. Europe is working on its own regional payment system. It did have one before, but MC acquired it. Maybe the second time's a charm. Visa and MC no longer work in Russia. Russia, China, India, and other countries clearly don't like the West's (read: America's) domination of the payment industry. As the populations of those countries swell, their citizens will be traveling and looking to use their cards from home wherever they go. And, they can: a Union Pay cardholder can use his or her card wherever there's a Diners Club sign in Europe or wherever there's a Discover sign in the US.

If regulators allow this merger, Capital One will be well-positioned to re-brand its credit and debit cards to Discover, where those cards could one day soon find greater acceptance than Visa, MC, and Amex. Meanwhile, other card issuers who decide to rebrand will have to pay licensing fees to Capital One.

Re: What will happen to Capital One and Discover cards?

Saleen099 — Tue, 20 Feb 2024 13:12:24 GMT

@Remedios wrote:
Well, what it means is that there will be plenty of $300 Discover One for good credit at 97% interest, no CLIs unless one offers them firstborn, and everyone will have to call every few weeks to promise they do intend to use their card "Plz don't lower my limit"

Network..that's barely relevant. When Cap One acquires portfolio, they bring it into their fold, they don't adjust based on "how it was", they've always done things Cap One way.

But yeah, sucks if/when it happens. Shrugies all around

Please don't lower my limit 🤣😂🤣😂

Re: What will happen to Capital One and Discover cards?

swankytiger — Tue, 20 Feb 2024 13:39:37 GMT

I mean I have more issues using discover domestically than AMEX. so how does cap1 aquireing them improve that? Also the election year regulatory question marks.

Re: What will happen to Capital One and Discover cards?

itslovefield — Tue, 20 Feb 2024 15:08:26 GMT

How very disappointing. I've been in rebuild - well, rebuilding the rebuild. I should have my cards paid off by end of year. Yay, me. Cap 1 is off my list for a number of reasons, we are both to blame for the acrimonious relationship. Disco was a goal card. If this happens, not so much. 🙄

Re: What will happen to Capital One and Discover cards?

gdale6 — Tue, 20 Feb 2024 16:01:12 GMT

Oh great, I hate C1, will terminate disco if c1 removes 5%.. they wanted the network so they can reduce reliance on mastercard. i want this derailed by anti trust actions.

Re: What will happen to Capital One and Discover cards?

AzCreditGuy — Tue, 20 Feb 2024 16:32:55 GMT

Being in a love/hate realtionship With Cap 1 and my 1st recent $2k CLI with Disco after 5 yrs, they are made for each other lol

But I am disappointed if the merger goes through....Disco is way better than Cap 1 and I can see Cap 1 putting restrictions on Disco products to limit themselves from credit defaults

Re: What will happen to Capital One and Discover cards?

youngandcreditwrthy — Tue, 20 Feb 2024 16:34:04 GMT

@BijouMan this is my .02. Cap one is lready the Capone of card issuers (ie the largest crd issuer in the US at least). Imo, I think they will leverage the discover network either for more prime cards or just in general to further gain market share and I can kinda foresee them coming up on Sherman AntiTrust issues or monopoly issues.

This is such an odd move. Hope it doesn't back fire on them. Truth is though, cap one and discover have EXCELLENT credit card infrastructure.. some of the best, even for subprime folks.

Re: What will happen to Capital One and Discover cards?

youngandcreditwrthy — Tue, 20 Feb 2024 16:36:04 GMT

@Anonymous I used the EO too over ten years ago LMAOO!!!! in my twennies!!!! haha I remember shooting off those emails to him, getting his direct Exec Assistant lmao.

finally got a cap one card higher than 5k too!

Re: What will happen to Capital One and Discover cards?

youngandcreditwrthy — Tue, 20 Feb 2024 16:38:11 GMT

sorry for the third message, but what about accounting for the varying visa and mc levels? WEMC, Visa Siggy, Infinite etc. Surely those things (which I think cost more for better credit applicants to the issuer that is) come into play?

I think that MC and Visa are gonna be forced to play ball if cap one wants a wholesale discount or some kind of discount off their fees (without of course the consumer getting any of it back at all -- because you know "inflation" ie corp greed)

Re: What will happen to Capital One and Discover cards?

Saleen099 — Tue, 20 Feb 2024 16:44:05 GMT

One thing I would like to mention is that this deal has been going on for over a year and a half. Warren Buffett has been selling off a lot of stock lately to make this deal happen. I want to point out that there will be four major credit card issues: American Express, Chase, Citibank, and Capital One, and they will make it a lot harder to get approved for a credit card.

Also forgot you can forget about the balance transfer offers that Discover would offer to card members.