Two Popular Credit Card Companies Are Merging And This Holder Could Benefit

In February of 2024, credit card company Capital One first released a statement about acquiring another credit card company, Discover. No longer competitors, the merger would hand existing Capital One shareholders at the time 1.0192 shares for every Discover share, representing a bonus of 26.6% on Capital One's $110.49 closing price at the time. The all-stock transaction was valued at a colossal $35.3 billion, and gave Capital One shareholders 60% to Discover shareholder's 40% ownership of the new company. 

Even as a the smallest platform of any U.S. operated payment network, Discover had built an impressive network of 70 million merchants across the globe. With the merger, Capital One said it would invest money to further grow Discover. This would also allow the newly combined company to leverage a digital first approach to their business model, and with the addition of Discover's national direct savings bank, the integration of everyday banking between Capital One's 259 branches, 80,000 no-fee ATMs, 16,000 cash deposit outlets, and 55 Cafes would guarantee a massive expansion of the new company's banking interests.

However, as credit card debt continues to explode in the U.S., 30 groups ranging from consumer interest to civil rights organizations banded together to warn against the merger, saying it would ultimately raise credit card fees and interest rates. Despite this, in April 2025, the Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency approved the merger anyway. The merger officially closed on May 18, 2025.

For those who might question the merits of using a debit or credit card for everyday purchases, the merger between Capital One and Discover may make answering that easier. Now the sixth largest bank in the U.S., based on assets, the merger presents new potential benefits for existing customers. For one thing, Discover cardholders now have access to all of Capital One's physical banking locations, which dwarfs Discover's existing outlet of one. Capital One cardholders get the benefit of Discover's debit card network, with Capital One transferring their debit cards into their system.

This merger could also unlock new cashback rewards for debit cards which, while one of several little-known credit card perks that most people don't take advantage of, is also an extremely rare perk offered for debit cards. The Interim CEO and President of Discover, Michael Shepherd, said in an April 2025 Capital One press release, "The combination of our two great companies will increase competition in payment networks, offer a wider range of products to our customers, increase our resources devoted to innovation and security, and bring meaningful community benefits." Now that Capital One is leveraging Discover's digital network, longtime customers of both can enjoy the benefit of brick and mortar locations, and expanded product offerings. However, the jury is still out on what that means for credit card premiums going forward. 

When you consider the numerous ways banking fees are costing you, the first obvious perk of the new debit cashback card from the merger of Capital One and Discover is the benefit of no fee checking accounts. This extends to ATM withdrawals, with no fee applied to over 60,000 ATMs in the extended network. Another perk? Overdraft protection from things like automatic withdrawals for bill payments, checks, and ACH transfers delivered through other lenders. Without overdraft protection, having a check bounce can hurt you financially, and even lead to additional costs like having to pay an insufficient fund fee. However, this service is also fee-free for Capitol One/Discover cardholders now.

Aside from the everyday banking bonuses, you can earn 1% cashback on up to $3,000 worth of purchases every month through the previously mentioned Discover debit card. Even better, there is no expiration date for when you can claim these rewards. You'll want to check the small print on this offer however, since closing your cashback debit card will result in you losing your reward points. This perk can add up, allowing you to earn you up to $360 per year. Plus, this cashback perk also applies when paying with digital wallets including Google Pay, Apple Pay, and Samsung Pay, – protecting your cash while you earn cashback rewards.