topic Re: Discover is missing... in Credit Cards

Discover is missing...

Anonymous — Thu, 04 Jan 2018 22:21:11 GMT

Just about all the big lenders have thrown their hats into the premium credit card space. For the purpose of this post a premium credit card is one that charges an annual fee over $300 and provides market competitive benefits and features. There's one glaring omission though and Discover is noticably absent.

According to Google Trends there was a marked and substantial decrease in interest in the Discover It card over the month of December. Discover has also noticably decreased marketing efforts. There's all the fixings of a prep for a new announcement. Surprisingly, interest in the Discover It is linked to interest in the Chase Sapphire Reserve as the 3rd most related search associated to "Discover It". The CSR followed the terms "Best credit cards 2017" and "Discover Scorecard".

Do you think Discover is going to enter the premium market this year? What would you like to see from a premium Discover card?

Perhaps you think the Discover It is about to change or be revamped?

Re: Discover is missing...

Anonymous — Thu, 04 Jan 2018 22:26:43 GMT

2019 maybe. 2018 doubtful.

Chase is still losing money on CSR but likely will change in 2018. Other lenders are obviously monitoring the situation because there's a likely opportunity to steal CSR clients but not if Chase never gets in the black with CSR.

One thing to note is that Chase is a financially conservative bank that typically funds credit limits with their own money while Discover is a bank that is known for assembling investment traches so third parties fund credit limits. See my post on ABSs here.

Since Discover uses ABS to finance credit lending, there is no possible way they can compete with a premium card because it means they have to take an even bigger loss while investors get the larger piece of the pie. The only way to compete with CSR is for the servicer to also be the lender -- taking risk but earning full rewards. In addition, Discover is not really a bank that wants super prime members because they're not relying on merchant processing fees as much as interest earnings. Discover is not VISA/MC so for them their profit focus is probably closer to Amex than Chase.

Re: Discover is missing...

Anonymous — Thu, 04 Jan 2018 23:30:25 GMT

Another obstacle is partners. Cards that charge that sort of fee are generally some sort of travel card, with a system that allows points earned on the card to be transferred to one or more loyalty programs. Most airlines and hotel chains are already partnered. Now with enough money, a bank may be able to lure a partner away, but that adds to the cost of the endeavor.

Re: Discover is missing...

Anonymous — Thu, 04 Jan 2018 23:40:54 GMT

Discover is already undervalued by a lot of folks because their current arsenal is already super competitive but most folks either ignore the opportunities or don't realize what's available.

Examples:

IT Miles is a straight 3% cash back on all spending the first year. While purported to be a miles card, it's a cashback card and at 1.5% it's nothing great but with 100% cashback match after 12 months, 3% is amazing for a card with no annual fee.
IT Chrome is a 2% cash back on general spend and 4% on dining/gas with the first year match.

Discover lets you combine limits, so you can do any one of the above cards for 12 months, then app the other card and combine your old limit into the new one.

They don't really need to try to compete with any of the $450+ AF cards since they do just fine with no fee, and have very competitive rewards at least for the first year.

Their standard IT card being a 10% category card the first year is probably a good card to do as your third Discover card since you can then combine your limits built from the previous 2 cards. A nice 3 year plan and only 3 hard inquiries over 3 years. Not a bad triple combo to look at if you don't have any 2%/3%/4%/10% cards already.

Re: Discover is missing...

CreditCuriosity — Fri, 05 Jan 2018 00:57:05 GMT

Discover after the first year is only a meh BT card along with capped cats which essentially makes it a 1% card with bad limits for most of us . Just my 2 cents whenever I see a discover thread I feel I need to weigh in. Many CU's/Banks spank it certainly after the first year and some will certainly give the capped cats and 2% after it a run even for the first year.

They will never enter the premium travel market in my opinion they would get steam rolled by the big players and as other has mentioned no partners that make it a even better value if people are after travel cards

Re: Discover is missing...

Anonymous — Fri, 05 Jan 2018 01:19:41 GMT

@CreditCuriousity wrote:
Discover after the first year is only a meh BT card along with capped cats which essentially makes it a 1% card with bad limits for most of us . Just my 2 cents whenever I see a discover thread I feel I need to weigh in. Many CU's/Banks spank it certainly after the first year and some will certainly give the capped cats and 2% after it a run even for the first year.

They will never enter the premium travel market in my opinion they would get steam rolled by the big players and as other has mentioned no partners that make it a even better value if people are after travel cards

Hope you feel better Sure would NOT offer you employment with Discover Bank! WOW! What an attitude ... just thinkin' ... although where Discover Card has gone in the last year plus is not in a positive direction when looking at the market place offerings for credit cards. Have had mine for seven years now and it is hard to find a need for use. Did a rant on another post so I will spare you one here

Re: Discover is missing...

AverageJoesCredit — Fri, 05 Jan 2018 02:21:45 GMT

Maybe come out with the Discover THAT card

I mean, how imaginative was it, pardon the pun lol, to come up with It as your main card

Re: Discover is missing...

Anonymous — Fri, 05 Jan 2018 05:20:33 GMT

Discover could at least come out with a $95/year travel card with some decent benefits, but then again, they've been cutting standard benefits from their cards that every V/MC/AX card offers.

Perhaps 6% back on dining (up to $7,000 a year, then 0.5%), 3% back on gas and groceries, and 0.5% on everything else with primary rental car insurance, lost item, tickets, and baggage/trip cancellation and interruption insurance, with cash back match in the first year.

One way to improve their current cards would be to offer a 10% bonus on rewards redeemed to a Discover checking account. If one redeems $490 to their Discover cash back checking, they're getting $539 instead.

Re: Discover is missing...

wasCB14 — Fri, 05 Jan 2018 06:01:33 GMT

I'm not holding my breath for a super premium card from Discover. They're a consumer finance company with a CC division but have no significant travel/lifestyle/perks expertise or relationships. I think they're smart to not throw away money trying to compete in a market segment they can't win. They stay in their lane and keep making money.

Re: Discover is missing...

K-in-Boston — Fri, 05 Jan 2018 06:25:36 GMT

I have to agree that I don’t see Discover being at all competitive in the super premium market. In addition to a lack of travel partners (who’s left? Motel 6?), acceptance is a huge factor. While in theory the cards should work fine via reciprocal arrangements with UnionPay and JCB, many travelers to Asia have reported headaches trying to actually use the card. And Discover acceptance in Europe is almost unheard-of the last I checked. Yes there is the Diners Club reciprocal agreement but even DC acceptance in Europe is fairly low. Even Amex is far and away more widely accepted (and almost universally accepted at the mid/upper-level hotels, restaurants and shops in many places). I just don’t see it happening.

Re: Discover is missing...

Anonymous — Fri, 05 Jan 2018 06:41:24 GMT

Discover never imo had the image to project being a premium card. Granted I have an $11K limit on mine and because of the limit i had to use it unless I could get a hold of DW cards with her higher limits. When Disco was the first cash back card I knew several "friends" who used it for everything because it was only cash back pony show. They all had good income over $100K een back then and are still Disco loyal.

Re: Discover is missing...

Anonymous — Fri, 05 Jan 2018 07:35:49 GMT

Rummaging through my memory banks ... several years back Discover had a Black Premium and Black Premium Plus Cards that were by invitation only with a spend minimum of $40,000 annually. The front line CSRs did not claim to have any knowledge on it so must have had its own servicing numbers and reps. Used to be able to dig out a little on its existence but that all seems to be gone. The cards had the travel orientation with the full benefits but where or how it disappeared I know not. What happened to the Discover Miles etc?