Discover the value
Written: Apr 01 '02 (Updated Apr 26 '03)
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Pros: cashback, good security, good handling of merchant disputes, web site features
Cons: good security, transient late fees
The Bottom Line: Good cash reward card
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| Arthur.Rubin's Full Review: Discover Card |
Discover has generally been valuable for me -- but, as in my last credit card review, let me first tell you about my usage of the card. I have a 5-figure credit limit on the card, which I've only pushed once.: I usually use run up about $500-2,000 each month, which I pay promptly, although sometimes not promptly enough, according to their records. (BTW, in case you're wondering, much of this is medical bills, some of which are later reimbursed by insurance.) Almost all of my recurring monthly charges are also on this card, including ISP services and my long distance phone bill, so I wouldn't consider using the card for balance transfers. On this card, I'm only familiar with normal (heavy) use, so I'm not familiar with their promotional rates or additional services.
UPDATE: In December 2002, after my mother's death, we had decided that we probably needed travel to visit my father, so we switched normal usage and recurring charges to our Citibank AAdvantage card. In March 2003, Discover called with a 0% promotional rate (and the transfer fee was waived) for balance transfers. Not being one to turn down free money, we took advantage of it to pay off some other credit cards.
Cashback (R) award
This is their primary advertising slogan: It pays to Discover the card that pays you back. (I've only heard this, rather than noticed seeing it, so I don't know if there is a colon after the name of the card.)
There is no cashback award on cash advances.
Up until this month, the annual cashback award has been calculated as:
1/4% on the first $1,000
1/2% on the next $1,000
3/4% on the next $1,000
and
1% thereafter. If you're a heavy user (over $3,000 per year), you can figure this as 1% less 15$.
The award has been available after your card anniversary date as (your option) (1) (their option) a check or a credit to the card, (2) gift certificates in double the amount at selected stores, (3) to open a Discover Bank savings account, or (4) donate to charity (their choice of charity, I believe).
The new schedule is:
1/4% on the first $1,500
1/2% on the next $1,500
and
1% thereafter, with the exception of a maximum of 1/10% to 1/4% on purchases at a selected list of "warehouse stores" (including WalMart). If you don't use the card at "warehouse stores", you can figure this as 1% less $18.75.I've seen many reviews complaining about this $3.75 per year. I mean, get real. What can you buy with $3.75? The warehouse store restriction is more serious. You might also note that Sears outlet stores are conspicuously absent from the list of warehouse stores.
The award will be available at any monthly statement when it reaches $20, and will only be available in multiples of $20, issued as $20 checks or as $40 gift certificates at selected stores.
Late fees
According to my records, I've only had one permanent late fee since 1999. They frequently fail to process the payment for over a week after receipt, but they've usually backdated the payment to the actual receipt date and removed the late fee and interest charges -- the last two times before I've gotten around to calling them. They don't seem to be on my credit reports, but I'm not sure I'd notice a prior month's late report on most of them.
Merchant disputes
They've been good on this, giving a provisional credit immediately. My disputes have included charges for purchases not made, double charges, and billing for (properly) canceled hotel/motel reservations. They (or the merchant) even credited one charge I didn't expect -- furniture customization charges when the delivery was delayed so long that we decided to cancel the order. The only disputed charge which they did not eventually credit was a motel charge, where the motel claims we made the reservation for June 18, when we intended to make it for July 18, and actually arrived on July 18. Both charges came through on the card on the same day. We did have the reservation number available, but there was no way to tell from that number what day it was on.
Requested credit line increase
We only requested a credit line increase once -- we were buying a used (ahem -- previously owned) car from a (more-or-less) reputable car dealer, and we were going to put the full amount on the Discover card, but the full price (including tax, license, dealer prep, bribes* , etc.) was within $1000 of our 5-figure credit limit.. We got approval of a $2500 increase (we requested $5000, with the advice of the agent) within 3 days.
* Thinking about it, I may not be kidding about the bribes -- the dealer was later shut down by the state for various auto finance law violations. We still have the license plate frame. It may be a collector's item -- well, sort of. At least the license plate and the frame may have the same manufacturer!
Security
We frequently receive a call from Discover card security asking about suspicious activity on the account. In December 2000, this paid off, as it turns out the card was "stolen" by misdirection -- the thieves called in a change of address and requested a new card. This may indicate a flaw in the authentication system, but....apparently, they gave a disconnected number for the new phone number, so security contacted us at our phone number for the suspicious activity call. There were a lot of suspicious incidents, including a call which Discover card claimed to have received from the Fullerton police department, which the Burbank police department, which had caught the thieves, checked out and found no record of in Fullerton. Nonetheless, the card was canceled promptly, and we never saw the charges made by the thieves. The only difficulty was remembering to inform all the ISPs of the new card.
Web site
In additional to the usual statements (12 months worth) and transactions since the last statements, you can set various alerts which you can be informed of by E-mail, including:
-- minimum payment not yet received (about a week before the due date)
-- statement available
-- payment received
-- outstanding credit exceeding $xxxx, available credit less than $xxx (Yes, these are available separately. I don't know why it's not a single checkbox with a secondary option.)
-- single transaction exceeding $xxx
-- merchant credits received
-- balance transfer posted
Alerts which do not seem to be available include :
-- late fee or over limit fee applied (well, you can read it on the statement when it's available)
-- late fee or over limit fee rescinded
-- interest rescinded
-- payment check bounced (this happened to me twice, actually -- it was the other bank's fault)
Nominal interest rate: 19.99% for purchases, 21.99% for cash advances
Promotional balance transfer interest rate: 0% (The promotional rate does not apply to new purchases)
Promotional rate term: Approximately 6 months
Balance transfer fee: I don't know. I know that this is important, but as I wouldn't consider using the card for balance transfers, and my highest outstanding interest rate is less than 4%, I haven't kept track. It's no more than 3%, but....I'll probably update the review with this information the next time I get a promotional rate offer from them.
Grace period (actual): one month exactly: statement closing date IS previous due date. There is, of course, no actual grace period on cash advances.
Late fee: $29
Over-limit fee: $29
Card Level: Well, the card is black in color, but I think the level is platinum.
My related reviews:
http://www.epinion.com/content_2580455556 on Credit Card Promotional Rates
http://www.epinion.com/content_59646971524 on MBNA
http://www.epinions.com/content_97389153924 on Citibank AAdvantage
Recommended:
Yes
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Epinions.com ID:
Arthur.Rubin
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 in Personal Finance |
 in Personal Finance |
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Member: Arthur Rubin
Location: Brea, CA, USA
Reviews written: 97
Trusted by: 108 members
About Me:
Expert in mathematics, computers, income tax, with a wide variety of interests.
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