any strings attached: discover card?

[EmperorNero]

Discover credit card:

• no APR

• no annual fee

• 1% (up to 2%) cash back

so what's the cash? aren't they losing money? my parents just got this preapproved credit card thing in the mail and I remember my economics teacher recommending discover. so what are the pros and cons?

 

[Raspewtin]

I don't know about interest rates since I don't care about that (always pay bills) but what I hate about Discover is that it picks and chooses certain merchants to give you 1% back. Some merchants don't result in 1% back. That was too much to keep track of and too much BS, so I found another card.

 

[ATLien247]

I would think that the "no APR" is an introductory offer. If it isn't, that is a hell of a deal!

 

[~zonker~]

I like the Discover Card. It's only 1% back after you have charged $2,500 though. So if you use the card a lot, it is a good deal. I buy groceries with it.

There are quite a few places who don't take it, however. Mostly restaurants. They are still making money, don't worry. They charge the merchant 2-3% for each transaction, you get 1%..

 

[kranky]

1. The zero APR only lasts for a short time. They hope you charge up a lot of stuff while there's no interest being charged, and when the interest charges start you can't pay it all off right away.

2. The no annual fee is very common for any card issuer, nothing special.

3. The cashback is an enticement to get people to charge more. A lot of people focus on getting more cash back, forgetting that the amount of cash back is a drop in the bucket compared to the interest many people pay.

The only way to make out on the deal is to never carry a balance and therefore pay no interest charges. Then the cash back is really cash back, and not the equivalent of a tiny discount on the interest rate.

I have a cashback card from a bank that was the greatest deal ever - up to 2% with no cap. (I think Discover has an upper limit on the amount of cash back you can get in a year). After 2.5 years, we've gotten over $500 back and never paid a dime of interest or an annual fee. But yesterday we got a letter saying they are canceling the cash back feature as of the end of the year. Oh well, it was fun while it lasted.

 

[~zonker~]

No upper limit on the cashback awards... check here

 

[qacwac]

i like mine.