What the Capital One-Discover Merger Means for Your Bank Account

 

Nearly 16 months after the high-profile deal was first announced, Capital One and Discover are expected to finalize their merger on May 18, combining to become the sixth-largest U.S. bank by asset size.

“The combination of Capital One and Discover will create a leading consumer banking and payments platform with unique capabilities, modern technology, powerful brands and a customer franchise of over 100 million customers that spans the marketplace,” said Capital One founder and CEO Richard Fairbank in an April 2025 earnings call.

Federal regulators approved Capital One’s $35.3 billion acquisition of Discover Financial Services earlier this year despite opposition from consumer advocates and some top Democrats, who cited concerns about reduced competition, financial stability and potential harm to low-income consumers and those with poor credit scores.

Other experts, however, say the deal could result in an improved experience for customers, especially those who have deposit accounts with either bank or those who bank elsewhere and might be looking to switch. They say potential features and perks that may be offered include cashback rewards, sign-up bonuses and expanded access to fee-free checking accounts.

While both banks may be best known for their credit cards, each offers several types of deposit accounts with similar features. Capital One and Discover offer free checking accounts with no minimum balance requirements. Discover’s account comes with a popular cashback debit card, while Capital One pays a small amount of interest on its checking account. Both offer high-yield savings accounts and certificates of deposit that earn competitive rates. Discover also offers a money market account.

Here’s a closer look at what the Capital One-Discover merger could mean for banking customers at each institution, as well as for those considering opening a new deposit account.

Rewards and Cashback Debit Cards

Discover’s cashback debit card pays 1% on up to $3,000 in purchases a month. It’s also a rare product to find at a bank these days.

Many banks, including Capital One, stopped offering debit card rewards after the Durbin amendment to the Dodd-Frank Act of 2010 placed a cap on interchange fees — often called swipe fees — that banks can charge merchants for debit card transactions. This cut into the banks’ revenues, and many adjusted by eliminating rewards.

However, because Discover serves as both a card issuer and a card network, it is exempt from those caps.

One of Capital One’s first moves following the merger will likely be to shift its debit cards to Discover’s payment network, which would lift the caps on its swipe fees and generate extra revenue, says Eric Fruits, senior scholar at the International Center for Law and Economics, which published a white paper on the merger in July 2024.

As a result, Fruits says he expects Capital One customers to get access to cashback rewards, similar to what Discover debit card users enjoy now.

“Where they might see a change over the next few months or a year or so would be an opportunity to get some sort of rewards debit card,” Fruits says. “Because by bringing in Discover, they get to get around the Durbin amendment and so that then opens up the opportunity. I think that could be a real boost not just for Capital One, but for Capital One customers.”

Kaiji Chen, a professor of economics at Emory University, agrees that rewards debit cards will probably be offered to Capital One account holders soon. “I think that’s an attractive part of the merger,” he says.

More Branches and ATMs

Discover account holders will gain access to Capital One’s 250-plus branches and more than 50 cafes, which is a considerable upgrade. Discover operates essentially as an online bank, although it maintains one full-service branch location in Delaware.

“They have a lot of branches and networks across the nation,” Chen says. “I think that’s the largest benefit that the Discover bank account holder would have.”

Customers of each bank will get access to more ATMs nationwide, although there will be an overlap since Capital One and Discover partner with some of the same ATM networks. Capital One says the combined bank will have a network of more than 80,000 ATMs and 16,000 cash deposit locations. Capital One currently offers more than 70,000 fee-free ATMs, while Discover customers have access to more than 60,000.

[SEE: Best Free Checking Accounts in 2025]

Expanded Access to Free Checking

Opponents of the merger have warned that it could negatively impact lower-income consumers and those with lower credit scores. The deal would give the company control of a sizable portion of the subprime credit card market, and consumer advocates worry this would leave those borrowers with few alternatives.

However, Fruits and his colleagues at ICLE suggest the merger may lead Capital One to offer some banking features that could potentially encourage more “underbanked” consumers to open fee-free checking accounts.

“By switching its debit cards to Discover’s payment networks, Capital One might offer more attractive products to depositors,” Fruits and his co-authors write in their white paper. “In particular, it could expand access to free checking accounts with no minimum balance requirements to a wider range of low-income consumers. And it could offer debit cards with cashback to lower-income consumers who would not qualify for credit cards. The benefits for this important underserved community could be enormous.”

Sign-up Bonuses for New Bank Accounts

Even if you don’t have an account with Capital One or Discover, you might want to keep an eye out for future bonus offers, especially if you’re looking to switch banks, Fruits says. Similar to how Capital One may give rewards to existing customers after moving to Discover’s payment network, there is also a possibility it will advertise sign-up bonuses to entice new customers as well.

[Related:Best Bank Account Bonuses in 2025]

What to Watch Out for if You Bank With Capital One or Discover

Here are a few aspects of the Capital One-Discover merger that account holders may want to keep an eye on:

— International acceptance of debit cards. Discover debit cards can be used outside the U.S., but they aren’t accepted in as many places as Visa or Mastercard. Capital One customers who are accustomed to using their debit cards internationally may want to check for accepting locations ahead of time or bring a backup card option.

— Notices of conversions or necessary actions. You’ll want to watch for any notifications of changes to your account in the months following the merger. Capital One says it will notify customers of any coming changes to their accounts or actions they need to take.

— Exposure to subprime borrowers. The credit card business of the combined bank will be taking on a considerable slice of the subprime market. Chen says he’d want to monitor whether that percentage rises, especially if you’re concerned that it could pose a risk to the bank’s health. “If I’m a Capital One deposit holder, I would like to keep an eye on how this merger bank asset portfolio is going to be readjusted,” Chen says. “Is there going to be too much subprime lending?”

How Soon Might Capital One Roll Out New Features?

Capital One officials haven’t said what types of changes they plan to roll out or how soon any may be implemented. In an April news release, Capital One said there would be no immediate changes to customer accounts at either bank and that customers would be notified well in advance of any conversions or other changes to accounts.

Fruits says he anticipates cashback debit cards to be available to Capital One customers relatively soon.

“It could happen pretty fast,” Fruits says. “They’ve probably been planning on doing something like this for two or three years, so I don’t see any real incentive for them to delay. Unless we hit a recession, and then all bets are off on what anyone will do.”

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What the Capital One-Discover Merger Means for Your Bank Account originally appeared on usnews.com