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[Friday, December 12, 2008]
Discover Wants You to Spend More on Credit Cards
Some of the major US card issuers, Citibank, for example, incurred unbelievable losses stemming from the second wave of the credit crunch. This also caused them to withdraw new applications, cancel inactive credit cards or reduce their limits. Thousands of customers have already been affected, getting their available credit shrunk, APRs hiked and scores damaged as a result of it.
Discover customers are not an exception but things are more lenient and even promising here. Take its Holiday Mall Promotion program in November, 2008 or the launch of a new biodegradable plastic card released in December, 2008. Isn't it evidence that Discover Card is far yet from winding up its offers and benefits? Discover is too big and trustworthy to punish its loyal customers, this is fact.
But the credit crisis can't but have told on Discover's card business and financial health on the whole. They have already reduced the duration of the 0% intro APR balance transfer period and raised finance charges on some offers. With all this, Discover encourages spending on its consumer and business accounts and offers to convince customers to do it more actively. A blogger on a respectful website shares experience how a Discover representative likes calling him at weekend nights and asking him why the credit card is not used as much as they want.
In the light of the recently taken measures against dawdling accounts, when Discover cut limits for good credit customers, the push to spend does make sense. For this, the company is ready to award each purchase in qualifying spending categories. A good example is Discover More cards that award you 5% cash back bonus per dollar spent in changing categories such as gas, groceries, medicine, home improvements and others.
Its special benefit is a gift card that you can purchase with an eligible amount of cash back earned. More Card allows you to maximize the cash back rewards by redeeming them for gift plastic at more than 100 brand-name partners.
Discover business cards come with valuable benefits, too. Along with the standard 5% back bonus on office supplies, you may also be eligible for $100 cash back on spending up to $1000 in three months. So, it really pays to use Discover credit cards for everyday purchases, doesn't it?
A constraint for most users is the tougher credit rules and new requirements. Cautious customers keep balances low and use plastic rather seldom and mostly for convenience purchases such as gas or groceries. But the latest occurrence of a limit reduction came over a Discover customer who used his card just this purpose. He never carries balances, uses the plastic 3 to 5 times per month, has a high credit score and always pays the bill the day he receives the email notification. Anyway the limit was cut by $2000 and the reason was not the credit history. Discover took it as unnecessary for him, that' all.
Well, let it be so, if you do not spend much. But if you carry balances, your debt to available credit ratio goes up, hurting the score. Discover offers you a better option. What's more, unlike some big card issuers who withdrew their offers, Discover still has a widest collection of consumer and business credit cards available for online applications.
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