Discover is no longer releasing full year 5% calendar early.

[Anonymous]

I sent Discover a message wondering why the calendar wasn't released and see below.

What does everyone think?

[simplynoir]

As someone who doesn't hold a Discover card I can see both sides of this. For those customers that plan ahead I can see it being a small annoyance that they will not be able to coordinate purchases in advance. But I also see Disco's side of it they can take landscape of what other issuers are doing like Chase with their rotating categories and plan accordingly. There may also part of the reason they're doing this is because of the current/future state of the economy and want relevant categories to facilitate consumer spending

[gdale6]

6 months of the year mine is SD as the cats are useless to me, if they want to try this and operate like Chase its ok with me as long as the same old cats are not set in front of us.

[mrphilli]

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@simplynoir wrote:

As someone who doesn't hold a Discover card I can see both sides of this. For those customers that plan ahead I can see it being a small annoyance that they will not be able to coordinate purchases in advance. But I also see Disco's side of it they can take landscape of what other issuers are doing like Chase with their rotating categories and plan accordingly. There may also part of the reason they're doing this is because of the current/future state of the economy and want relevant categories to facilitate consumer spending

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I agree with this view. I could see this change as a "we're trying to build up hype"-kind of thing for Discover, too. In prior years, once the quarterly calendar was announced, I'd make a mental note of it and then move on with little to no fanfare. I'm sure they (and every other company out there) are hoping to drive more attention and gain more users, even in this economy. Anything they can spread out over time gives them more content to pursue engagement with on social media.

As much as I like to plan out my spending over time, I would rather see a credit card company offer more competitive and relevant categories/merchants for these kinds of temporary bonuses. So, if Discover can achieve that, then I'm all for this change. There have definitely been quarters in the past where my Discover card was exiled to the back of my wallet. (Don't feel too bad for them, though. They had one of those flimsy Synchrony card cut-outs to keep them company! )

[Aim_High]

Thanks for that update, @Anonymous.  For those who are heavily into maximizing 5% category return with multiple cards and like to plan far in advance, I could see this being a significant change and annoyance.  In my case, it's not a huge issue but I would prefer knowing more than 30 days out. 

While you could make the argument that the change <could> be more advantageous to cardholders, I tend to be more skeptical.  With Discover becoming more open and flexible to varying categories, it sounds like they are considering shaking up the status quo.  Gas and grocery quarters which have been consistent categories might have become more expensive for them as, with the rising prices on each, they may have more consumers reaching the $1,500 quarterly cap.   So maybe they will be replaced by less useful (i.e. less costly to Discover) categories. 

Combined with the recent news about Discover not allowing product changes at this time, it appears like they are doing a comprehensive review of their card products.  Their last new card was in 2015 with Discover IT Miles, so I wouldn't be surprised to see some new card(s) revealed in the next 12 or so months.

[uncredited]

I'm still hoping theyre introducing something new, AND let existing customers PC when they do.  With the categories being unknown I'm maybe glad I didn't get to pc to rotating. Chrome is still 1% and nothing other than 1% for me, but the categories being random is what I don't like about the idea. Most of the Freedom Flex categories would end up unused a lot of the time for me, and the same would have been true here I'm thinking.  Kinda hoping they'll someday let us pc to miles at least, 1.5% is better than 1 other than unknown months.  But if there's something new soon that we can PC to, I'd really most prefer to line up for that. None of the current rewards programs are too alluring for me.  The change sucks but like some of the other threads talked about recently, rotation isn't for everyone either way.  Wish I knew Miles wasn't really travel and was 1.5% back when I could pick!

I'll be curious from the sidelines what the categories end up being though.

[wasCB14]

Discover's average rewards rate for 2021 was 1.38% (10-K p29). So their average customer is still using the card for a lot of 1% spend.

Of course, they have been struggling to grow in the last few years.

[Anonymous]

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@wasCB14 wrote:

Discover's average rewards rate for 2021 was 1.38% (10-K p29). So their average customer is still using the card for a lot of 1% spend.

Of course, they have been struggling to grow in the last few years.

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Yes, we forget in MF land that for many people, one card may be all they use, so discover gets the 1%, and, if lucky, some 5% if the timing and category match!

I wonder what the comparable figure is on Chase Freedom/Freedom Flex.  I would expect the 3% to help the CFF but ...

[wasCB14]

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@Anonymous wrote:

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@wasCB14 wrote:

Discover's average rewards rate for 2021 was 1.38% (10-K p29). So their average customer is still using the card for a lot of 1% spend.

Of course, they have been struggling to grow in the last few years.

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Yes, we forget in MF land that for many people, one card may be all they use, so discover gets the 1%, and, if lucky, some 5% if the timing and category match!

I wonder what the comparable figure is on Chase Freedom/Freedom Flex.  I would expect the 3% to help the CFF but ...

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JPM in 2021:

$17.9 billion in 2021 CC reward costs (which presumably includess SUBs) (10-K p 213)

$23.6 billion in interchange/processing revenue (p213)

$1,360.7 billion in combined debit/credit card sales volume (p66)

$893.5 billion in non-commercial CC sales volume (p66)

Of course, that's presumably with SUBs and across all products. I don't know if we can get much more precise than "somewhere between 1.31% and 2%"

Discover had only $1.2 billion of discount and interchange revenue in 2021...compared to $8.7 billion (7x as much) in credit card interest. They make their money from people carrying big balances.

[calyx]

It makes sense from their end.

The only real impact it has for me is if I want to get a new card to get that sweet cashback match for 10%.  Knowing if there's a Paypal quarter in there is key for me since good timing would let me hit that one hard (last two years it's been during months my 6mo insurance policy is due, so that's been nice).   But other than that, it's just carrying on like before.