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Discover Card is the 4th major credit card brand in the US with over 50 million card holders. The Discover Network links more than 4 million merchant and cash access locations nationwide making it the largest credit card network in the country. But unlike the three other majors, Discover is not popular outside the US though ATM machines worldwide accept it. Discover credit cards had it roots in 1981 and owe its heritage from Sears which at that time was the largest US retailer. Sears had bought the Dean Witter Reynolds brokerage company and the Coldwell, Banker & Co real estate firm to add financial clout to its customer service portfolio. Sears formed the Sears Financial Network and with it launched the Discover Card bearing the small Sears Tower logo embossed. Discover credit cards were unique in that they were the first commercial credit cards that did not levy annual membership dues to its cardholders and offered higher credit limits than the majors at that time. Unlike similar attempts to introduce credit cards like the Citibank Choice cards which failed in the market and was later re-introduced as a VISA card, the Discover card swept the industry gaining a large national following within a short time. Moreover, Discover were among the first to offer cash back rewards where as much as 1% of the purchases amount was rebated to the customers. It is interesting to note that Discover was accepted by the US Customs for credit card payments to customs duty. Discover cards had a rather tumultuous history tied up with the efforts of Sears to compete with the majors. Emerging retail gains like Wal-mart and specialty stores like Toys R Us in the late 80s resisted accepting Discover cards as the card brand had been associated with their competitor Sears. But Sears had planned to use the card as a means to have a one-stop financial service center and its promotion of the card adversely affected their sales turnover and was seen as hurting the card’s growth potential. After introducing Discover, Sears had ended accepting VISA and MasterCard, alienating its customer base. Sears prominence began to ebb and it sold its financial portfolio in 1993 while accepting VISA and MasterCard again. The Discover Card later became a product of the Dean Witter financial services firm which merged with Morgan Stanley in 1997.
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