Discover Trifecta???

[MyLoFICO]

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@wasCB14 wrote:

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@grillandwinemaster wrote:

Discover already has the following:

Discover IT-             5% rotating categories

Discover Miles-     1.5% cash back

I believe Discover could benefit from a 3rd credit card offering to allow it to 

compete completely with Chase.  A 3rd credit card offering to compete with 

CSR and/or CSP with transfer partners and all would, in my opinion, create

brand loyalty to Discover, the way that Chase has created with the Chase

Trifecta.  We can call Discover points, "Discover Dream" points, or Double

D's!

I would love for Discover to enter the loyalty program market the way Chase

has UR, Amex MR and Citi TYP.  

What are your thoughts on this? Any and all opinions are apreciated.  For

or against is fine.  I'm curious to see if the MyFico community would find

a new rewards program from Discover useful.

 Thanks!

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I am an occasional 5% customer and a DFS shareholder.

I very much disagree with you. The premium card market is already pretty crowded. Discover should stay on the current path.

Discover is one of the best card options for people who want good customer service, don't travel much, and don't want to pay an annual fee. Being straightforward and relatively customer-friendly is how they earn loyalty with their customers, not by having transfer partners. Sometimes the way to win a fight (like Platinum vs. Prestige vs. CSR) is to just stay out of it. Let other banks compete for the high rollers (and get stuck with a bunch of bonus chasers in the process) while you keep customers who have one primary card and are happy to earn 1% cash on most spending.

As a customer, I wouldn't mind them offering something with a big bonus to try to compete. But as a shareholder...I don't see it as a sensible venture.

Part of the reason the customer service is great is that the CSRs know the product. If anything, I think they should simplify further and drop the Chrome and NHL cards.

Go back to:

5% rotating unsecured

Some sort of student or secured card

A 1.5% cash card

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I'm not a shareholder but I own several candle holders and cup holders, that may or may not be relevant. That being said, I agree with this post. I think most people like simplicity. I know I do. I like that about Discover, a lot. I like the looks of the other cards you mentioned but I send them enough cash as it is, to have them send me some back is a good thing, even though its not enough to cover what I send them. 

[grillandwinemaster]

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@Sharingan wrote:

I don't see this happening either. Discover would probably lose their shirts trying to compete in this segment, especially given the expenditures needed to secure partnerships and entice profitable customers to their premium product. The ideal customer is very likely already entrenched in another rewards program, and it's unlikely that Discover would be capable of offering a competitive card (transferable points, large sign up bonus, travel expense reimbursements, etc) that wouldn't put significant losses on the books for them. Additionally, Discover's presence abroad is still an issue. How useful is a premium, travel based credit card (or its companion 1.5% card) that can't even be used in many places when traveling? I don't even bother bringing mine anymore when I am in Europe. 

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More excellent points!  For a moment I forgot that there's very limited Discover acceptance over seas.  Discover would have a very tough time competing for this segment of the market until acceptance abroad is comparable to Visa  and MasterCard.  

Off topic:  How does Amex acceptance compare to Discover acceptance when traveling abroad?  

[grillandwinemaster]

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@MyLoFICO wrote:

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@wasCB14 wrote:

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@grillandwinemaster wrote:

Discover already has the following:

Discover IT-             5% rotating categories

Discover Miles-     1.5% cash back

I believe Discover could benefit from a 3rd credit card offering to allow it to 

compete completely with Chase.  A 3rd credit card offering to compete with 

CSR and/or CSP with transfer partners and all would, in my opinion, create

brand loyalty to Discover, the way that Chase has created with the Chase

Trifecta.  We can call Discover points, "Discover Dream" points, or Double

D's!

I would love for Discover to enter the loyalty program market the way Chase

has UR, Amex MR and Citi TYP.  

What are your thoughts on this? Any and all opinions are apreciated.  For

or against is fine.  I'm curious to see if the MyFico community would find

a new rewards program from Discover useful.

 Thanks!

---

I am an occasional 5% customer and a DFS shareholder.

I very much disagree with you. The premium card market is already pretty crowded. Discover should stay on the current path.

Discover is one of the best card options for people who want good customer service, don't travel much, and don't want to pay an annual fee. Being straightforward and relatively customer-friendly is how they earn loyalty with their customers, not by having transfer partners. Sometimes the way to win a fight (like Platinum vs. Prestige vs. CSR) is to just stay out of it. Let other banks compete for the high rollers (and get stuck with a bunch of bonus chasers in the process) while you keep customers who have one primary card and are happy to earn 1% cash on most spending.

As a customer, I wouldn't mind them offering something with a big bonus to try to compete. But as a shareholder...I don't see it as a sensible venture.

Part of the reason the customer service is great is that the CSRs know the product. If anything, I think they should simplify further and drop the Chrome and NHL cards.

Go back to:

5% rotating unsecured

Some sort of student or secured card

A 1.5% cash card

---

I'm not a shareholder but I own several candle holders and cup holders, that may or may not be relevant. That being said, I agree with this post. I think most people like simplicity. I know I do. I like that about Discover, a lot. I like the looks of the other cards you mentioned but I send them enough cash as it is, to have them send me some back is a good thing, even though its not enough to cover what I send them. 

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MyLo, I'm not a share holder,  and I don't own any candles and more so,  any candle holders.  But I do agree with the simplicity aspect of Discovers business model. 

[MyLoFICO]

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@grillandwinemaster wrote:

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@MyLoFICO wrote:

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@wasCB14 wrote:

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@grillandwinemaster wrote:

Discover already has the following:

Discover IT-             5% rotating categories

Discover Miles-     1.5% cash back

I believe Discover could benefit from a 3rd credit card offering to allow it to 

compete completely with Chase.  A 3rd credit card offering to compete with 

CSR and/or CSP with transfer partners and all would, in my opinion, create

brand loyalty to Discover, the way that Chase has created with the Chase

Trifecta.  We can call Discover points, "Discover Dream" points, or Double

D's!

I would love for Discover to enter the loyalty program market the way Chase

has UR, Amex MR and Citi TYP.  

What are your thoughts on this? Any and all opinions are apreciated.  For

or against is fine.  I'm curious to see if the MyFico community would find

a new rewards program from Discover useful.

 Thanks!

---

I am an occasional 5% customer and a DFS shareholder.

I very much disagree with you. The premium card market is already pretty crowded. Discover should stay on the current path.

Discover is one of the best card options for people who want good customer service, don't travel much, and don't want to pay an annual fee. Being straightforward and relatively customer-friendly is how they earn loyalty with their customers, not by having transfer partners. Sometimes the way to win a fight (like Platinum vs. Prestige vs. CSR) is to just stay out of it. Let other banks compete for the high rollers (and get stuck with a bunch of bonus chasers in the process) while you keep customers who have one primary card and are happy to earn 1% cash on most spending.

As a customer, I wouldn't mind them offering something with a big bonus to try to compete. But as a shareholder...I don't see it as a sensible venture.

Part of the reason the customer service is great is that the CSRs know the product. If anything, I think they should simplify further and drop the Chrome and NHL cards.

Go back to:

5% rotating unsecured

Some sort of student or secured card

A 1.5% cash card

---

I'm not a shareholder but I own several candle holders and cup holders, that may or may not be relevant. That being said, I agree with this post. I think most people like simplicity. I know I do. I like that about Discover, a lot. I like the looks of the other cards you mentioned but I send them enough cash as it is, to have them send me some back is a good thing, even though its not enough to cover what I send them. 

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MyLo, I'm not a share holder,  and I don't own any candles and more so,  any candle holders.  But I do agree with the simplicity aspect of Discovers business model. 

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You should buy some but buy them fom Home Depot, Lowes, Costco or Sam's so you get the 5% back right now. lol 

I think people are confused enough when it comes to bills, banks and credit cards. One thing I always liked about Disco is #1, it's dead. And # 2, its just click and go. The cash back takes a long time to post and payments and charges too, but I think most average folks don't watch these things like I most of us do. 

[wasCB14]

It's a publicly traded company. I have no information that isn't available to the general public through SEC filings.

A few observations from that public info, though:

Not very much of their revenue (or profit) comes from interchange fees. Their other banking activities (student loans, person loans, deposits) are small (though growing). Spending on the Discover credit network is small and growing slowly. Spending on the Pulse debit network they own is falling quickly and a fading part of the business.

The company contrasts sharply with Amex. Amex customers spend a huge amount and pay their balances off quickly. The Amex loan portfolio is small for the volume of transactions they handle (think of all the personal and business charge cards). Very little profit comes from interest.

Discover customers, on average, spend less and often carry balances. The CC loan portfolio yields about 12% interest, from which they take about 2.5% to 3% in credit losses, and pay very little in interest on their deposits and borrowings (about 0.5% to 4.5%, averaging 3%). While we get 0%/2%/4% promotions, there are a lot of people out there paying interest to Discover at high APRs.

It's much more of a consumer finance company than a payments network.

[wasCB14]

Also, keep in mind that they still have several legacy cards still in use:

More, Open Road, Motiva, Miles by Discover (different from the more popular 1.5% "Discover It Miles")...even some sort of business card I know little about. I'm not sure if or when they will move those customers to the newer generation of products.

There is some value in the NHL association, but keep in mind that (apart from discounts on NHL gear) it's identical to the regular It.

[galahad15]

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@wasCB14 wrote:

Also, keep in mind that they still have several legacy cards still in use:

More, Open Road, Motiva, Miles by Discover (different from the more popular 1.5% "Discover It Miles")...even some sort of business card I know little about. I'm not sure if or when they will move those customers to the newer generation of products.

There is some value in the NHL association, but keep in mind that (apart from discounts on NHL gear) it's identical to the regular It.

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Very fascinating info...just curious, does anyone know if Discover potentially allows PCs to any of its legacy cards, the same way Citi will still allow PCs to its legacy Dividend card?

[Steelersboy]

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@grillandwinemaster wrote:

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@CreditCuriousity wrote:

Never see it happening.  For one most of their starting liimits  for people would make it a worthless travel card.  I suppose this is what the "miles" card is suppose to be is their attempt at this, but as you now it is just a cash back card with a 30$ a year wifi or whatever credit.  They will stick with what they know IMO and that is just cashback.

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Maybe they should convert to a straight 2% card?

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Or maybe even 3%? 

[Anonymous]

Good read.

[wasCB14]

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@galahad15 wrote:

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@wasCB14 wrote:

Also, keep in mind that they still have several legacy cards still in use:

More, Open Road, Motiva, Miles by Discover (different from the more popular 1.5% "Discover It Miles")...even some sort of business card I know little about. I'm not sure if or when they will move those customers to the newer generation of products.

There is some value in the NHL association, but keep in mind that (apart from discounts on NHL gear) it's identical to the regular It.

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Very fascinating info...just curious, does anyone know if Discover potentially allows PCs to any of its legacy cards, the same way Citi will still allow PCs to its legacy Dividend card?

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No PCs to the legacy cards as far as I'm aware...but I can't really imagine why anyone would want one (unless novelty is worth lower rewards and higher fees). The legacy personal cards are inferior to the current offerings from Discover and other issuers. I don't know the future of the business card, but the rewards on it are not competitive by current standards.

Many people have reported the opposite: PCing the personal legacy cards to the newer generation (Chrome, 5%, 1.5%, etc.). That's possible and IMO smart to do.

On MF many people love to have a lot of options, but the reality is that sometimes it's better to have a smaller selection of better cards.