I don't get the appeal of the Discover Cash back m... - Page 5 - myFICO® Forums

Anonymous · ‎02-18-2020

Surprised your still secured with Discover. I opened a $300 secured with them Dec 2018. In June of 2019 they sent back my security deposit and graduated the card with a $2,000 limit.

The wife got hers ame time as I buy with $200. A month after mine graduated, hers did too with a $3,000 limit.

I requested another increase in December 2019 and was denied due to "not enough experience at current limit". I applied for another card the same or next day and got a second card with $4,000 limit and zero interest for 14 months in BT and purchases.

Discover is hard to predict after they give the initial increase at the promised 7 month mark.

Anonymous · ‎02-18-2020

@Anonymous wrote:
@Anonymous wrote:
@Anonymous wrote:
@KLEXH25 wrote:
Discover It categories are all things I spend my money on, so when they match the first year and I'm essentially getting 10% back on my purchases, I'm ok with that. Not to mention 0% APR for 14 months. If all you're looking for is chasing SUBs, then sure Discover is not good for that. But a lot of us still find value in the 5% categories well past the first year, as well as additional BT offers and extended 0% apr offers.
I use the 0% APR on new cards and store away the full payment to earn interest. Depending on the spend and length of the promo, I can usually grab at least an additional $200 (taxable interest) on a new card, thus expanding the "SUB".
Could you eleborate exactly what you are doing? Are you taking what normally would be the paid in full credit card payment and putting it into a savings account and only paying the minimum?

Yes, whenever I open a new card with a 0% APR, and especially when I have a lot of immediate spend, I will run up the balance on the card, and each month pay the minimum payment. The amount that I put on the card minus the minimum payment goes into a high interest money market account to earn interest. This is done each month until the 0% promo ends. When it ends, I pay the balance in full before interest kicks in. That amount will be 15-20K, or whatever the credit line is. I keep the interest earned on my purchases.

I don't recommend that everyone do this as it requires 2 things: extreme discipline in handling finances, ensuring payments aren't missed and the full amount is paid before the promo ends, and an excellent and thick credit file, so to not spook lenders and have them believe that you are in financial trouble.

I believe it is called stoozing. I heard about this about 1.5 years ago and always been fascinated to try it my twist on it; but have not.

I had a situation, about four years ago, I had to get a new pre-owned car loan. My lively hood depended on it. Getting the loan was fast (two weeks) and pain free. I believe one of the reasons the auto loan was pain free because of my good but thin credit file and zero utilization at the time. But if I was stoozing, my utilization would be sky high and most likely denied for the loan?

Anonymous · ‎02-18-2020

@dlister70 wrote:
This is my 3rd straight year with a Discover It cashback match card, and I try to maximize the 5% categories as much as possible so that I get 10% back. The cashback match means that I also don't have to carry a different 2% card for the year. I will probably do it for a 4th year when this one is up.

Also you get better value for gift card redemption on Discover. Last year I bought 35 gift cards to Chili's with my cashback match when they were $20 for a $25 card. That extra $5 per card ended up being an extra $175 in value for my cashback. Then on top of that, I was using the Chili's "To Go" club everytime I picked up dinner there, and you got a $25 gift card everytime you spent $250 (even though I was just spending the gift cards). So that got me another $75 worth of gift cards from using the gift cards that I got from Discover. Unfortunately, the Chili's program ended at the end of 2019.

All told, it was $707 of cashback last year, but I looked at it as $957 of value because my gift cards were making gift card "interest" from the Chili's program.

I won't get as much this year, because last year I had to put a roof on my house and used the Discover card for that since it was essentially a 2% card, but just by using it as my "everything else" 2% card and making sure to use it during the 5% categories, I get a pretty decent return on my otherwise organic spend. I don't typically chase after sign up bonuses, but this one was pretty easy to do without having to open multiple cards and rotate my wallet all year to whatever card had the SUB.

It's simplicity and it's decent payback are the appeal.

Discover lets you apply for the same card every year over again?

Edit: nevermind I see this question is answered here:

https://ficoforums.myfico.com/t5/Credit-Cards/I-don-t-get-the-appeal-of-the-Discover-Cash-back-match...

longtimelurker · ‎02-18-2020

@Anonymous wrote:
@Anonymous wrote:
@Anonymous wrote:
@Anonymous wrote:
@KLEXH25 wrote:
Discover It categories are all things I spend my money on, so when they match the first year and I'm essentially getting 10% back on my purchases, I'm ok with that. Not to mention 0% APR for 14 months. If all you're looking for is chasing SUBs, then sure Discover is not good for that. But a lot of us still find value in the 5% categories well past the first year, as well as additional BT offers and extended 0% apr offers.
I use the 0% APR on new cards and store away the full payment to earn interest. Depending on the spend and length of the promo, I can usually grab at least an additional $200 (taxable interest) on a new card, thus expanding the "SUB".
Could you eleborate exactly what you are doing? Are you taking what normally would be the paid in full credit card payment and putting it into a savings account and only paying the minimum?

Yes, whenever I open a new card with a 0% APR, and especially when I have a lot of immediate spend, I will run up the balance on the card, and each month pay the minimum payment. The amount that I put on the card minus the minimum payment goes into a high interest money market account to earn interest. This is done each month until the 0% promo ends. When it ends, I pay the balance in full before interest kicks in. That amount will be 15-20K, or whatever the credit line is. I keep the interest earned on my purchases.

I don't recommend that everyone do this as it requires 2 things: extreme discipline in handling finances, ensuring payments aren't missed and the full amount is paid before the promo ends, and an excellent and thick credit file, so to not spook lenders and have them believe that you are in financial trouble.
I believe it is called stoozing. I heard about this about 1.5 years ago and always been fascinated to try it my twist on it; but have not.

I had a situation, about four years ago, I had to get a new pre-owned car loan. My lively hood depended on it. Getting the loan was fast (two weeks) and pain free. I believe one of the reasons the auto loan was pain free because of my good but thin credit file and zero utilization at the time. But if I was stoozing, my utilization would be sky high and most likely denied for the loan?

As Cardnut said, you do it when you don't expect to need to be applying for more credit. If you are keeping the funds liquid, such as an a high interest savings account, if something happens and you need a car loan, you can quickly pay off the card. (Yes, might need to wait for the payment to report. And might not work so well with Vantage or FICO 10 when it comes!)

Anonymous · ‎02-18-2020

@JNA1 wrote:
Discover also has an underrated gift card program where you can redeem your cash for a lot of $20 for $25, $45 for $50, and sometimes even $20 for $30 gift cards. These are great deals if you plan to go these businesses anyway. A lot of theirs are useable gift cards too, and not obscure boutiques that nobody has ever heard of, like some cards offer.

Good to know!

Anonymous · ‎02-18-2020

@Anonymous wrote:
@Anonymous wrote:
@Anonymous wrote:
@Anonymous wrote:
@KLEXH25 wrote:
Discover It categories are all things I spend my money on, so when they match the first year and I'm essentially getting 10% back on my purchases, I'm ok with that. Not to mention 0% APR for 14 months. If all you're looking for is chasing SUBs, then sure Discover is not good for that. But a lot of us still find value in the 5% categories well past the first year, as well as additional BT offers and extended 0% apr offers.
I use the 0% APR on new cards and store away the full payment to earn interest. Depending on the spend and length of the promo, I can usually grab at least an additional $200 (taxable interest) on a new card, thus expanding the "SUB".
Could you eleborate exactly what you are doing? Are you taking what normally would be the paid in full credit card payment and putting it into a savings account and only paying the minimum?

Yes, whenever I open a new card with a 0% APR, and especially when I have a lot of immediate spend, I will run up the balance on the card, and each month pay the minimum payment. The amount that I put on the card minus the minimum payment goes into a high interest money market account to earn interest. This is done each month until the 0% promo ends. When it ends, I pay the balance in full before interest kicks in. That amount will be 15-20K, or whatever the credit line is. I keep the interest earned on my purchases.

I don't recommend that everyone do this as it requires 2 things: extreme discipline in handling finances, ensuring payments aren't missed and the full amount is paid before the promo ends, and an excellent and thick credit file, so to not spook lenders and have them believe that you are in financial trouble.
I believe it is called stoozing. I heard about this about 1.5 years ago and always been fascinated to try it my twist on it; but have not.

I had a situation, about four years ago, I had to get a new pre-owned car loan. My lively hood depended on it. Getting the loan was fast (two weeks) and pain free. I believe one of the reasons the auto loan was pain free because of my good but thin credit file and zero utilization at the time. But if I was stoozing, my utilization would be sky high and most likely denied for the loan?

I'm sure it has a name. I did it a lot during the great recession, probably not the best time to do it lol.

I do it with car loans. I was getting 5% back in 2008 and got a new car loan at 0.9%. Saved me about $400. Again in 2014 and I just did it a few months ago. Was getting 2.4% rate while paying 1.9% on a new car loan. That's actually a small loss due to interest being taxable income. I did the math, but thought it was worth $55 to get an installment loan on my CRs. The rates have dropped since then, so it will cost more than $55.

I consider the 0% on purchases part of the sign up bonus. When I got my DISCOVER card, I saw the option to get double cash back the first year. So I went and clicked a link to get it and got approved. What I learned from that is not to click ANY link. The offer I got with that link was a 0% on BT w/no fee, but no cash back match. That was worthless to me. So I got basically no SUB on the card.

notmyrealname23 · ‎02-18-2020

@Anonymous wrote:
Surprised your still secured with Discover. I opened a $300 secured with them Dec 2018. In June of 2019 they sent back my security deposit and graduated the card with a $2,000 limit.
The wife got hers ame time as I buy with $200. A month after mine graduated, hers did too with a $3,000 limit.
I requested another increase in December 2019 and was denied due to "not enough experience at current limit". I applied for another card the same or next day and got a second card with $4,000 limit and zero interest for 14 months in BT and purchases.
Discover is hard to predict after they give the initial increase at the promised 7 month mark.

Beats me, man. Won't graduate a Chrome Secured (and this was after 12 month of perfect payment/enough use that I got $80ish Cashback Match, so it's not like I left it in a sock drawer, even though the low line of credit is a PITA for utilization), will give me a new line of unsecured credit that costs them a second year of Cashback Match. So great, I'll cancel the old card and take my first year of Cashback Match and go for year two. I had close to 40k in unsecured lines of credit by the time I was a year in on that secured Chrome.

I don't get it but I'm not complaining, more of their money for me.

Anonymous · ‎02-18-2020

@Anonymous wrote:
@Anonymous wrote:
@Anonymous wrote:
@Anonymous wrote:
@Anonymous wrote:
@KLEXH25 wrote:
Discover It categories are all things I spend my money on, so when they match the first year and I'm essentially getting 10% back on my purchases, I'm ok with that. Not to mention 0% APR for 14 months. If all you're looking for is chasing SUBs, then sure Discover is not good for that. But a lot of us still find value in the 5% categories well past the first year, as well as additional BT offers and extended 0% apr offers.
I use the 0% APR on new cards and store away the full payment to earn interest. Depending on the spend and length of the promo, I can usually grab at least an additional $200 (taxable interest) on a new card, thus expanding the "SUB".
Could you eleborate exactly what you are doing? Are you taking what normally would be the paid in full credit card payment and putting it into a savings account and only paying the minimum?

Yes, whenever I open a new card with a 0% APR, and especially when I have a lot of immediate spend, I will run up the balance on the card, and each month pay the minimum payment. The amount that I put on the card minus the minimum payment goes into a high interest money market account to earn interest. This is done each month until the 0% promo ends. When it ends, I pay the balance in full before interest kicks in. That amount will be 15-20K, or whatever the credit line is. I keep the interest earned on my purchases.

I don't recommend that everyone do this as it requires 2 things: extreme discipline in handling finances, ensuring payments aren't missed and the full amount is paid before the promo ends, and an excellent and thick credit file, so to not spook lenders and have them believe that you are in financial trouble.
I believe it is called stoozing. I heard about this about 1.5 years ago and always been fascinated to try it my twist on it; but have not.

I had a situation, about four years ago, I had to get a new pre-owned car loan. My lively hood depended on it. Getting the loan was fast (two weeks) and pain free. I believe one of the reasons the auto loan was pain free because of my good but thin credit file and zero utilization at the time. But if I was stoozing, my utilization would be sky high and most likely denied for the loan?
I'm sure it has a name. I did it a lot during the great recession, probably not the best time to do it lol.

I do it with car loans. I was getting 5% back in 2008 and got a new car loan at 0.9%. Saved me about $400. Again in 2014 and I just did it a few months ago. Was getting 2.4% rate while paying 1.9% on a new car loan. That's actually a small loss due to interest being taxable income. I did the math, but thought it was worth $55 to get an installment loan on my CRs. The rates have dropped since then, so it will cost more than $55.

I consider the 0% on purchases part of the sign up bonus. When I got my DISCOVER card, I saw the option to get double cash back the first year. So I went and clicked a link to get it and got approved. What I learned from that is not to click ANY link. The offer I got with that link was a 0% on BT w/no fee, but no cash back match. That was worthless to me. So I got basically no SUB on the card.

Also your turning a secured loan into a unsecured loan. If a financial catastrophe occurred your car could not be repossessed.

Anonymous · ‎02-18-2020

@Anonymous wrote:
@Anonymous wrote:
@Anonymous wrote:
@Anonymous wrote:
@Anonymous wrote:
@Anonymous wrote:
@KLEXH25 wrote:
Discover It categories are all things I spend my money on, so when they match the first year and I'm essentially getting 10% back on my purchases, I'm ok with that. Not to mention 0% APR for 14 months. If all you're looking for is chasing SUBs, then sure Discover is not good for that. But a lot of us still find value in the 5% categories well past the first year, as well as additional BT offers and extended 0% apr offers.
I use the 0% APR on new cards and store away the full payment to earn interest. Depending on the spend and length of the promo, I can usually grab at least an additional $200 (taxable interest) on a new card, thus expanding the "SUB".
Could you eleborate exactly what you are doing? Are you taking what normally would be the paid in full credit card payment and putting it into a savings account and only paying the minimum?

Yes, whenever I open a new card with a 0% APR, and especially when I have a lot of immediate spend, I will run up the balance on the card, and each month pay the minimum payment. The amount that I put on the card minus the minimum payment goes into a high interest money market account to earn interest. This is done each month until the 0% promo ends. When it ends, I pay the balance in full before interest kicks in. That amount will be 15-20K, or whatever the credit line is. I keep the interest earned on my purchases.

I don't recommend that everyone do this as it requires 2 things: extreme discipline in handling finances, ensuring payments aren't missed and the full amount is paid before the promo ends, and an excellent and thick credit file, so to not spook lenders and have them believe that you are in financial trouble.
I believe it is called stoozing. I heard about this about 1.5 years ago and always been fascinated to try it my twist on it; but have not.

I had a situation, about four years ago, I had to get a new pre-owned car loan. My lively hood depended on it. Getting the loan was fast (two weeks) and pain free. I believe one of the reasons the auto loan was pain free because of my good but thin credit file and zero utilization at the time. But if I was stoozing, my utilization would be sky high and most likely denied for the loan?
I'm sure it has a name. I did it a lot during the great recession, probably not the best time to do it lol.

I do it with car loans. I was getting 5% back in 2008 and got a new car loan at 0.9%. Saved me about $400. Again in 2014 and I just did it a few months ago. Was getting 2.4% rate while paying 1.9% on a new car loan. That's actually a small loss due to interest being taxable income. I did the math, but thought it was worth $55 to get an installment loan on my CRs. The rates have dropped since then, so it will cost more than $55.

I consider the 0% on purchases part of the sign up bonus. When I got my DISCOVER card, I saw the option to get double cash back the first year. So I went and clicked a link to get it and got approved. What I learned from that is not to click ANY link. The offer I got with that link was a 0% on BT w/no fee, but no cash back match. That was worthless to me. So I got basically no SUB on the card.
Also your turning a secured loan into a unsecured loan. If a financial catastrophe occurred your car could not be repossessed.