On Monday, Discover announced that it had reached a deal with Citigroup to purchase Diners Club International for $165 million. This acquisition should eventually result in increased global acceptance of Discover, enabling Discover cardholders to use their cards at international merchants that accept Diners Club. In turn, international Diners Club cardholders would be able to use their Diners Club card at merchants who accept Discover in North America. Discover expects that integration of the networks would take two to three years.
Currently Discover is only accepted in North and Central America, the Carribbean and China, so adding the Diners Club network will significantly expand its global reach and make it a bigger player among upscale consumers and business travelers.
Discover More cardholders can now sign up for the 5% cash back bonus in April to June. The 5% bonus is available on up to $400 in purchases between April 1 and June 30 at stores in the following categories: department stores, clothing stores, home improvement stores and lawn and garden stores.
Discover More cardholders can enjoy a 5% cash back bonus on purchases in February in the following categories:
- candy shops
- pet stores
Purchases that earn this bonus will be limited to $200.
You can sign up for the offer at this link. (Note: Any purchases made in February before signing up will not be eligible for the bonus.)
Courtesy of FW, we have this Discover More promo:
Get a $100 CashBack bonus when you’re approved by April 6, 2008 and make $500 in purchases with your card within 3 months.
In addition, there is a balance transfer offer of 3.9% until January 2010, but it carries a balance transfer fee of 3% with a min of $10 and no cap. To apply, visit apply.discovercard.com and use promotion code: DAFM.
In the latest sign that the credit crunch is spreading, the AP reports that the rate of delinquent and defaulting credit card accounts has skyrocketed recently. Credit card companies have been revising their estimates of 2008 write-offs upward due to defaults; for instance, Capital One last month projected at least $4.9 billion of default-related write-offs.
Every issuer has responded in at least some way to mitigate their risks. This is most evident in my survey of offers to new customers. Here are some illustrative examples:
- Just in the past month, Discover has reduced the intro 0% period for purchases on their consumer cards from 12 months to just 6 months.
- Despite the decline in the prime rate, Capital One has increased the APR on its consumer cards by half a point, also in the past month.
- Chase has also been aggressive in systematically reducing its exposure by making its balance transfer offers much less attractive. While Chase’s offers of 12 months at 0% APR used to be plentiful on its affinity cards, the available options have shrunk immensely. In fact, the number of cards that offer an intro 0% APR for 12 months has shrunk from well over 100 a half year ago, to just 7, by my latest count. The max balance transfer fee has also increased on many cards, from $75 to $99.
These changes appear to be working for Chase, as its trust was the one exception in October where delinquencies and defaults both declined. Unfortunately for deal-hunting credit consumers, this may translate into deals being leaner in the times ahead.
For reference, here are the 7 Chase offers that I found still carry a 0% intro APR for 12 months:
On an off-topic note, does anyone else find it oddly coincidental that the only university-related card with 0% for 12 months represents a team playing for the national championship in football?
Discover is pushing even harder to capture more of your holiday spending, with another offer for existing Discover More card holders. From FW:
Login into your account and the advertisement is on the front page.
“From December 1, 2007 through December 31, 2007, use your Discover Card to get 5% CashBack Bonus at grocery stores.
Get whatever you need for your holiday celebration and earn 5% CashBack Bonus on $200 in grocery store purchases.
Note that since the offer is for up to $200 in purchases, it only amounts to a max $10 bonus, and that the Discover Miles and the Open Road card are not eligible.
For a limited time, when you sign up for a new Discover Biz Card account, you will receive a 10% “Special Holiday Offer”:
Earn a full 10% Cashback Bonus on your first $2,000 in restaurant purchases and a full 10% Cashback Bonus on your first $2,000 in home electronic store purchases for up to three months after your account is opened. Restaurant purchases are those made at merchants we classify as full-service restaurants, cafes, cafeterias and fast food locations. Home electronic store purchases are those made at merchants that specialize in the sale of electronic devices used for home entertainment and small electronic products, such as Best Buy and Circuit City.
Discover’s popular Holiday Mall promotion is back and is bigger than ever. For every $200 you spend on your Discover card at one of 160 participating shopping centers between November 1 and December 31, 2007, you’ll receive a $20 Discover gift card. There is a limit of five gift cards awarded per account.
For more details and to see a list of participating malls, see this link.
While the standard Discover Biz offer is 0% on purchases and balance transfers for 12 months, this promo offers 0% on balance transfers for 18 months and 5.99% on purchases for 10 months. The balance transfer fee is 3% and caps at a maximum of $75.
Other terms of the offer appear standard, including no annual fee, 5% on office supplies, 2% on gas and PurchaseChecks.
Link (via FW)
Note: This offer expired December 31, 2007.
On Friday, Morgan Stanley spun-off Discover Financial Services to focus on its higher-growth, core businesses. Already, there is speculation that Discover will be bought out in the near future:
“We believe there is a reasonable likelihood of a sale of Discover over the next two years,” wrote Eric W. Wasserstrom, a UBS research analyst, in a report initiating coverage on the company with a “neutral” rating.
Potential suitors include Citigroup, General Electric and Wal-Mart.