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PrintDiscover Card Beginning Total Branding Change?
Credit, Debt Help October 6th, 2006On the heels of a new ad campaign launched in August, a source tells me Discover Card is going through a branding change in the coming months. Discover recently released a business card, student card, and miles card — an apparent strategy shift for the bank.
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Previously Discover offered only no-annual fee classic and platinum cards offering 1% cash back on purchases.
The branding change follows parent company Morgan Stanley’s 2005 decision not to sell its Discover division. Apparently Morgan Stanley sees a promising future for Discover after the Supreme Court upheld a ruling that MasterCard and Visa cannot exclude existing customers from issuing credit cards on the Discover network. Among other benefits, the ruling opened the door for Discover debit cards which the company unveiled in February 2006. Though I have yet to hear of the Discover Debit card taking off, new competition in a field previously dominated by Visa and MasterCard is a good thing.
How Will Discover Card change?
I expect Discover Card will continue to release new card models in an effort to broaden its appeal to consumers while continuing to expand its global merchant network. Recent programs launched by Discover include the ability to get 5% cash back (instead of the standard 1%) on purchases at select merchants. Card members must be enrolled in a separate (but free) program to get the bonus, and participating merchants change each month.
Currently Discover Card is accepted by a large number of U.S. merchants, is gaining popularity in Central America and in China and Japan, but is not yet established in Europe. The ability to prove to consumers that their Discover Card will be accepted wherever they go will be critical to future success, especially for debit cards.
Is It Worth Carrying a Discover Card?
When Discover Card was introduced it was one of only a few cards with no annual fee. Today it’s easier to get a no-annual fee card with a good rate and some sort of bonus program, so Discover needs new ways to be competitive.
Though not heavily marketed, Discover Cards traditionally give cardholders higher credit limits than they would get from a MasterCard or Visa. Discover approved me for a Discover Platinum Card with a $10,000 credit limit when I was a 19-year old college freshman. At that time I also had a Visa and MasterCard with $2,000 and $500 limits, respectively. Discover’s high credit lines are attractive to cardholders looking to payoff big purchases over time, but obviously benefits Discover more than consumers, who end up paying hundreds or thousands in interest.
If you have good credit, you can probably find a better interest rate elsewhere, but if you need the increased credit line for business travel or are looking for an everyday card that you payoff each month, Discover can be a good choice. If you request a PIN number for your Discover Card you can also get cash back at your standard interest rate (not the cash advance rate) when you make purchases at participating merchants. Again, if you pay your balance in full, that feature can further simplify your daily spending. I’ve found Discover Card’s online account access and bill paying to be the best I’ve used, and their customer service in general has been good to me.
Recently Added and Re-branded Discover Cards
The Miles Card from Discover® Card
Discover® Student Tropical Beach Card
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