topic Re: Discover Trifecta??? in Credit Cards

Discover Trifecta???

grillandwinemaster — Sat, 15 Apr 2017 18:22:38 GMT

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!

Re: Discover Trifecta???

Anonymous — Sat, 15 Apr 2017 18:46:54 GMT

Anything is possible. I view Discover has being very simple, straightforward and customer oriented. Points can be hard to follow and a lot of people, myself included, do not care for points. I still have no idea what to do with my MR and TY points; I view them as pretty much worthless. Chase on the other hand has made UR points wonderfully easy. Technically both my Chase cards earn UR points, but they translate to dollars so it makes sense to me. I have never cashed in MR or TY points because Amex and Citi make it difficult to deal with. Actually, that is not true, I did use some TY points on Amazon (yes, I know, that is a waste, but so are the points sitting on my account for a decade).

Also, Discover was the original cash back card. I would rather them make the Discover card even more competitive in the cash back market (perhaps matching or beating Double Cash) rather than create points. Not to mention how difficult and expensive it is to create and maintain a competitive points loyalty program.

Re: Discover Trifecta???

CreditCuriosity — Sat, 15 Apr 2017 19:12:23 GMT

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.

Re: Discover Trifecta???

wasCB14 — Sat, 15 Apr 2017 19:19:37 GMT

@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

Re: Discover Trifecta???

grillandwinemaster — Sat, 15 Apr 2017 20:07:36 GMT

@Anonymous wrote:
Anything is possible. I view Discover has being very simple, straightforward and customer oriented. Points can be hard to follow and a lot of people, myself included, do not care for points. I still have no idea what to do with my MR and TY points; I view them as pretty much worthless. Chase on the other hand has made UR points wonderfully easy. Technically both my Chase cards earn UR points, but they translate to dollars so it makes sense to me. I have never cashed in MR or TY points because Amex and Citi make it difficult to deal with. Actually, that is not true, I did use some TY points on Amazon (yes, I know, that is a waste, but so are the points sitting on my account for a decade).

Also, Discover was the original cash back card. I would rather them make the Discover card even more competitive in the cash back market (perhaps matching or beating Double Cash) rather than create points. Not to mention how difficult and expensive it is to create and maintain a competitive points loyalty program.

Good points Co Native. I agree with you that a straight 2% card similar to Citi Double Cash would be coveted.

Re: Discover Trifecta???

grillandwinemaster — Sat, 15 Apr 2017 20:08:58 GMT

@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.

Maybe they should convert to a straight 2% card?

Re: Discover Trifecta???

austinguy907 — Sat, 15 Apr 2017 20:12:03 GMT

IT - 1%/5% spends

Chrome - 2% up to $1K spend each quarter

NHL = IT w/ NHL LOGO's on them

Miles - 1.5% "Miles" but, cash equivalent + free wifi on flights

So, there's 3 options if you really wanted to mess around with it. Disco is simple and they're not every other bank out there. If you want to stack rewards and mess around with programs then there's Chase, Citi, AMEX, etc.

The whole reason I can see for other places to offer different tiers of rewards is to stack up the AF's they charge to make up for the rewards they're selling you. Most trifecta's are costing you at least $500/yr in AF's to collect points from them. So, of course if you're spend is high enough $10K+ then it makes sense to get something back. If you travel 5 times per year then most of the higher tier cards make sense with $400+ AF since you'll cash in on the travel rebates ~$300/yr and free WIFI and other tangible benefits while on the road.

Disco doesn't want to be like everyone else or they would let everyone in that applies. It's hard to get in the door for either type of card. Their actions speak volumes though once you're in and start playing the game with them for CLI's and such. They won't go and HP you if you wouldn't benefit from a deeper examination of your CR for a CLI. They'll actually discuss the reasons with you instead of just repeating the whole you'll get a letter in the mail spiel other companies give you. Of course there's tons of potential with the SP CLI and if that doesn't satiate your appetite for your CL you can go ahead and call lending and ask for a HP to a specified amount.

Personally..... a lot of this points shuffling and stacking has an ADD appeal to all of the moving objects that are distracting. Everyone scheming to get the most for the least amount of effort or cash. If you take a different approach and just let things accumulate in your piggy banks then focus on something else it's a nice little bank of rewards when you find yourself wanting/needing to head off somewhere and having it end up being 50% or less of the retail cost because your rainy day piggy bank is there waiting for you.

Re: Discover Trifecta???

Sharingan — Sat, 15 Apr 2017 20:20:26 GMT

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.

Lastly, while I'm sure it's fun to muse, the goal shouldn't be to copy "completely" or exactly what a competitor is doing or already has. Citi and AmEx do not have equivalent 'trifectas' to Chase's, likely for good reasons. In Discover's case, I think they would be far better off exploring other ideas, primarily those involving cashback.

Re: Discover Trifecta???

grillandwinemaster — Sat, 15 Apr 2017 20:25:30 GMT

@wasCB14 wrote:
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

You make some valid points. I agree that customer service reps are well schooled in there product offerings. I also agree with you that a points rewards program could have the potential to convolute there offerings, and thus create confusion with CSR's.

I also feel that Discover should drop, or merge the Chrome with the 1.5 cash back card. I see no reason to offer an additional product for essentially .5% on two categories.

I disagree with you As far as discontinuing the NHL card is concerned. I would think that being the official card sponsor of the NHL has to bring some large collateral benefits to Discover.

Of course, I speak as someone that does not have access to Discover internal sales/ swipe figures, across there product lines, and I can only speculate as to the benefits of being the official card sponsor of the NHL.

Perhaps as a stock holder you can share further light on this? Thanks for your reply and sharing your knowledge.

Re: Discover Trifecta???

grillandwinemaster — Sat, 15 Apr 2017 20:38:27 GMT

@austinguy907 wrote:

IT - 1%/5% spends
Chrome - 2% up to $1K spend each quarter
NHL = IT w/ NHL LOGO's on them
Miles - 1.5% "Miles" but, cash equivalent + free wifi on flights

If you take a different approach and just let things accumulate in your piggy banks then focus on something else it's a nice little bank of rewards when you find yourself wanting/needing to head off somewhere and having it end up being 50% or less of the retail cost because your rainy day piggy bank is there waiting for you.

Austin, your right on the money. I'm beginning to understand that Discover has a different target customer, or demographic. I actually don't travel as much as the average "travel" customer to make the AF' s justifiable.

I like the rainy day piggy bank analogy. With my travel habits, this probably makes more sense for me than paying exorbitant annual fees.

Thanks for your input.

Re: Discover Trifecta???

MyLoFICO — Sat, 15 Apr 2017 20:42:15 GMT

@wasCB14 wrote:
@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.

Re: Discover Trifecta???

grillandwinemaster — Sat, 15 Apr 2017 20:47:21 GMT

@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.

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?

Re: Discover Trifecta???

grillandwinemaster — Sat, 15 Apr 2017 20:52:17 GMT

@MyLoFICO wrote:
@wasCB14 wrote:
@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.

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.

Re: Discover Trifecta???

MyLoFICO — Sat, 15 Apr 2017 20:56:56 GMT

@grillandwinemaster wrote:
@MyLoFICO wrote:
@wasCB14 wrote:
@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.
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.

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.

Re: Discover Trifecta???

wasCB14 — Sat, 15 Apr 2017 21:12:13 GMT

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.

Re: Discover Trifecta???

wasCB14 — Sat, 15 Apr 2017 21:33:18 GMT

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.

Re: Discover Trifecta???

galahad15 — Sat, 15 Apr 2017 22:30:23 GMT

@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.

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?

Re: Discover Trifecta???

Steelersboy — Sat, 15 Apr 2017 22:35:06 GMT

@grillandwinemaster wrote:
@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.
Maybe they should convert to a straight 2% card?

Or maybe even 3%?

Re: Discover Trifecta???

Anonymous — Sun, 16 Apr 2017 00:01:17 GMT

Good read.

Re: Discover Trifecta???

wasCB14 — Sun, 16 Apr 2017 00:15:57 GMT

@galahad15 wrote:
@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.
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?

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.