Significant Discover Card Changes Coming
Some sweeping changes are coming to your Discover Card, and unfortunately, most of them are not good. Effective for billing periods after May 1, 2009, a number of changes to its cash back program will be made:
- Cash back redemptions, which either are transferred to a bank account or issued as statement credits, will now only start at $50, and must be made in multiples of $50.
- In addition, gift card redemptions will still start at $20 but no longer need to be in multiples of $20.
- Transactions conducted in a foreign currency will begin being charged a 2% fee.
- Perhaps most importantly, the first $3000 of annual spend only earns 0.25% cash back. Spending above $3000 continues to earn 1%.
Additionally, there are some changes to the terms for those who do not pay in full. Thanks to reader Robert for alerting us to these changes.
Discover’s customer service has decreased steadily in the last two years, so probably not worth getting one with these changes!
While the latest Discover card changes are irksome, it is interesting that a J.D. Power and Associates consumer survey found that Discover card ranks #2 in overall customer satisfaction (AMEX is #1). Not that their rating is all that great — Discover card earned just 751 out of 1,000 possible points in the survey.
While credit card companies are hurting financially, they are looking for new ways to charge fees, raise rates and lower benefits. New Federal Reserve rules will limit some of these practices starting in June, 2010, but in the meantime, banks can pretty much do what they want.
This makes it imperative that everyone keep careful track of any changes in their credit card terms.
@NativeStar
You’re exactly right that these changes reinforce the importance of keeping track of your account terms in these uncertain financial times.
For a bit more detail on your other points, other readers can see the posts where I mentioned that JD Power ranked Discover #2 in customer satisfaction and when the Federal Reserve passed the consumer ‘credit card bill of rights.’
It’s almost like you’ve been reading this blog. 😉
Discover’s regular cash back rate is a joke. I use their card only for purchases under the “get more” 5% cash back.
WATCH OUT!
After years of having the same due date each month they changed our last month due date making our payment two days late. They charged a $39 dollar late fee and raised our rate from 16% to 39%. THEY WILL BE GETTING A CALL ON MONDAY MORNING. That should be illegal.