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The Discover It card has largely become irrelevant to me year round for quite some time now, and I really only keep it for history (one of my oldest accounts from the Discover More days), Discover Deals, and because I like the company for some reason. The reward structure has become quite stale and dated in my opinion, although I'm sure many still find it acceptable for now.
It's not as if I only shop on Amazon or buy gas just 3 (or 6) months in the year; so of course a cognizant consumer (like myself) would have made plans to, if not already supplanted the Discover It and its inadequacies with more suitable options (PenFed Platinum Cash, Chase/Synchrony Amazon Prime cards) to satisfy the recurrent need. I've had a Chase Amazon card lying around for a while now, and its improvement has certainly brought it to the forefront for my Amazon purchases, and has also allowed me to replace the bookstore category on one of my Cash+ cards.
For me, the Prime Card will be a card I never carry in my wallet. It will be dedicated to Amazon use, and therefore I can leave it in the SD.
The Prime Card does diminish the value of Discover IT. I never really used it in Q2 (I don't eat at restaurants much). Q1 was fine, but I already had a 5% gas card (RIP SM). All that leaves is 5% home improvement in Q3. That may still get some use, but I suspect that Discover will adjust to have some less attractive categories, just as Chase Freedom has.
UncleB wrote:
Also keep in mind that there are likely large numbers of people who for whatever reason won't get the Amazon Visa but may already have (or get) Discover, so for them Discover will remain a solid option for 5% off Amazon purchases for half the year.
I'm one of the customers that falls in this category. I don't have the Amazon prime, nor do I have any desire to take a hp, New trade line, and AAofA reduction for the sole purpose of having an Amazon dedicated card. In my household, Discover ROCKS!
I can still use Discover It for the first 6 months of the year, but for the 2nd half of the year I am strongly leaning to Chase's Amazon. The only exceptions I see are:
1) If you already have the Amazon store card and spend less than $500 per month on Amazon.
2) You only spend on Amazon during the holiday shopping season.
3) You don't spend on Amazon at all.
4) You have the Amex Blue Cash Preferred and get Amazon gift cards year round.
@Anonymous wrote:I can still use Discover It for the first 6 months of the year, but for the 2nd half of the year I am strongly leaning to Chase's Amazon. The only exceptions I see are:
1) If you already have the Amazon store card and spend less than $500 per month on Amazon.
2) You only spend on Amazon during the holiday shopping season.
3) You don't spend on Amazon at all.
4) You have the Amex Blue Cash Preferred and get Amazon gift cards year round.
4a) You have the Ink or OBC
5) You have the Cash + and can choose Bookstores as 5% category without giving up too much on something else.
I like Discover as a company, can't say anything bad, but the card itself has become fairly useless for me much of the time. Most of the 5% categories have not been significant spend areas for me and have grown narrower over the years. It's my oldest card and has a large limit and low APR, so I keep it, but it has not been heavily used for a long time.
If I had to guess, I would say in the wake of the Prime Visa, it's entirely possible Discover simply won't offer 5% on Amazon in the future. Although many of the 5% categories are fairly consistent year over year, they can and do change, so offering it in the past doesn't mean it's permanent. It's also possible they will offer 5% on Amazon in an effort to compete. The $1,500 cap doesn't bother me as I don't spend enough to hit it anyway.
The rotating 5% structure is dated and stale for sure and my next guess is that the structure will eventually be changed or phased out. Citi discontinued their Dividend for new apps 2 years ago; Chase has been downplaying the 5% Freedom card; it just seems the 5% rotating card's time has come and gone. Most consumers prefer less hassle with their rewards. In the meantime I think Discover will probably just continue to water down the categories just like Chase has with Freedom some quarters.
I have noticed the same thing. Chase Freedom Unlimited doesn't offer as much cash back as the regular Chase Freedom, but the company tries too hard to advertise the Chase Freedom Unlimited. Then you have other major players in the cash back game now like Costco Citi Visa, Chase Amazon Prime, and US Bank's 5% card. Even Bank of America cash rewards increased their quarterly spending limits from $1500 to $2500.
I'm passing on Chase Amazon despite already being a Prime member. I spent about $3k there in 2016.
Most of what I buy on Amazon is eligible for Citi Price Rewind. It's a gamble, but a few big rewinds put my average on eligible items well over 5%. It does involve some extra effort, of course.
Digital content doesn't qualify, but Freedom and Discover cover much of the year. Add in an occasional Amex offer and I usually have some small gift card balance. I wasn't even using Sallie much for Amazon.
So for me, a Prime Visa would actually end up getting fairly little spend.
@kdm31091 wrote:
The rotating 5% structure is dated and stale for sure and my next guess is that the structure will eventually be changed or phased out. Citi discontinued their Dividend for new apps 2 years ago; Chase has been downplaying the 5% Freedom card; it just seems the 5% rotating card's time has come and gone. Most consumers prefer less hassle with their rewards. In the meantime I think Discover will probably just continue to water down the categories just like Chase has with Freedom some quarters.
I have to agree with you that the 5% rotating categories are going the way of the Dodo bird. In the meantime, the Freedom 5% proves its usefulness when combined with the Chase Trifecta. Without this 1-2-3 punch, it's use is limited.
The Discover IT on the other hand, benefits from no such relationship and must stand alone on its own merits.