Discover jumps into the rip off the customer market

[pipeguy]

Discover co-branded cards are now "enjoying" the same honest market as First Premier and Credit One in screwing the sub-prime market.

http://www.continentalfinance.net/index.php

Read the terms: http://www.continentalfinance.net/state.php (linked to each state VA shown as an example)

$300 CL, $29.99 APR, AF $75, Set up - monthly fees at $12 mon/$144 year.

[trumpet-205]

At least they have better APR...

[LS2982]

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@trumpet-205 wrote:

At least they have better APR...

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[webhopper]

I think the title to this board is a little misleading. Discover financial services has not jumped into the same waters as first premier and credit one; rather the discover payment processing network has apparently jumped into bed with a bank of the same ilk as the aforementioned companies. I do believe that in the long run this will be detrimental to the discover brand image; but they were already headed that way with letting wal mart issue discover cards backed by GE. Apparently this is a way to diversify their exposure to subprime consumers without necessarily taking a risk by doing so. Maybe they are gathering data on these consumers so that they can get a better idea of spending.g patterns; turnover rate; etchings to better prepare themselves in the future to tap into this group of customers who are a huge profit center from a fee and APR perspective.

[LS2982]

The way I see it, if you get this card or FP or credit one or whatever, your already aware of the fees, APR associated with the card so if you allow yourself to pay the crazy APR then that's your problem. Use it responsibly and it will lead to better cards in the future. Everybody has had to deal with subprime bs at one point if you messed your credit up. Just use them for what you need and move on.

[jsucool76]

I agree with LS. Plus the matrix card has been around for a while now.

[tinuviel]

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@LS2982 wrote:
The way I see it, if you get this card or FP or credit one or whatever, your already aware of the fees, APR associated with the card so if you allow yourself to pay the crazy APR then that's your problem. Use it responsibly and it will lead to better cards in the future. Everybody has had to deal with subprime bs at one point if you messed your credit up. Just use them for what you need and move on.

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I also agree with LS about this. I messed up my credit and used FP and Orchard for rebuilding. IMO, FP is a bottom of the barrel choice, but I knew what the fees were going to be and chose to use them anyway. The way that I see it, I was ultimately responsible for having messed up my credit, so if I had to pay more to get back on track, then so be it. These cards served their purpose and I've moved on.

[pipeguy]

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@webhopper wrote:
I think the title to this board is a little misleading. Discover financial services has not jumped into the same waters as first premier and credit one; rather the discover payment processing network has apparently jumped into bed with a bank of the same ilk as the aforementioned companies. I do believe that in the long run this will be detrimental to the discover brand image; but they were already headed that way with letting wal mart issue discover cards backed by GE. Apparently this is a way to diversify their exposure to subprime consumers without necessarily taking a risk by doing so. Maybe they are gathering data on these consumers so that they can get a better idea of spending.g patterns; turnover rate; etchings to better prepare themselves in the future to tap into this group of customers who are a huge profit center from a fee and APR perspective.

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I disagree in part because Discover and AmEx have their own processing networks whereas MC/Visa member issuers do not. A MC/Visa issued card is controlled by the issuing agent (say Chase or even First Premier) and they (the issuer) sets the terms. AmEx and Discover control their own networks and such set the terms for "co-branding" of cards.

Direct Quote from an article on American Banker:

Visa and MasterCard have permitted credit card issuance on their networks only by institutions with federal deposit insurance from the FDIC or NCUA. Amex and Discover exclusively issued cards on their respective networks until 2004, when the outcome of an antitrust case freed them to court Visa and MasterCard member banks.

As far as paying the penalty for rebuilding by using the likes of a $300 CL, with a $75 AF and a $144 a year maintenance fee, card, any card.... I think there are much better options, such as a secured card (rebuilding) or a debit card for general usage. IMO a $300 CL card with a built in $219 a year in fees before any interest added is just fooling one's self into thinking they have a "credit card" and paying dearly for nothing other than wasting ones own limited funds.

[Crashem]

Well the AMEX lawsuit that forced AMEX to open their transaction network up to others might have come into play here.  I don't the the specific points, but I can easily see Discover lawyers interpreting the lawsuit to mean they are forced to allow any issuer on that meets their stated requirements

[SpiceIslander]

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@LS2982 wrote:
The way I see it, if you get this card or FP or credit one or whatever, your already aware of the fees, APR associated with the card so if you allow yourself to pay the crazy APR then that's your problem. Use it responsibly and it will lead to better cards in the future. Everybody has had to deal with subprime bs at one point if you messed your credit up. Just use them for what you need and move on.

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Well said!