Review: Cerulean Discover Credit Card Is Not The “Real” Deal

Discover NetworkMany people are surprised when I tell them how hard it is to get approved for a Discover card.

They don’t publicly disclose the credit score requirements, but I would say they’re comparable to American Express. In fact, I even hear from people who were turned down by Discover but approved for the AmEx Green or Gold.

So when I heard that there is now a Discover card for bad credit, I was skeptical to say the least. Turns out, I was right. Don’t apply in 2013 without reading this…

Who the heck is Cerulean?!

If you go on Discover’s website, you won’t see anything about the Cerulean credit card. Why? Because it’s not even issued by Discover! Don’t believe me? Take a look at the bottom of the application and you will see this:

fine print about card issuer

As you see right there, the issuer is Services Credit Union and it’s serviced by Continential Finance Company.

What does this mean? Unfortunately, Discover is not the issuer of this card. So when you call up customer service, you won’t be talking to Discover.

Instead you’ll be communicating with Continental Finance, who is a subprime credit card issuer with many negative customer reviews posted about them online.

Then why do they call it a Discover card?

This card processes transactions over Discover’s payment network. Similar to how Bank of America processes their cards over the Visa or MasterCard network. Aside from that connection, there really is none.

So the Cerulean is not a “real” Discover card in the sense that it’s not issued or managed by them.

And that brings us to the next logical question… will having a card managed by Continental Finance be just as enjoyable? Probably not!

The fees are frickin’ ridiculous!

The Cerulean Discover has one of the most outrageous fee structures you will ever see.

At first glance of the application, it sounds like you’re getting a good deal…

Cerulean card features

It’s true there are no application fees, but what about all the other ones they will charge you?

  • $75.00 annual fee, billed once per year
  • $144.00 per year in “monthly maintenance fees” which are billed at $12 per month. This fee doesn’t start ‘til the second year and I’ll explain why in a moment.
  • 29.99% APR on purchases
  • Cash advance fee of $5.00 or 5% of the amount of each cash advance, whichever is greater. This is also not billed until the second year.
  • 3% foreign transaction fees, which again starts at year two.

In a nutshell, during your first year you are paying $75 to have the card and then a 29.99% interest rate on any balance you carry.

But why do all the other fees not start ‘til the 2nd year? Because if they charged them during the first year, that would probably be breaking the rules.

You see the Credit CARD Act (this PDF explains it) requires that issuers cannot charge fees during the first year which exceed 25% of a card’s credit limit. Since Continental Finance’s Cerulean hybrid card has a minimum limit of only $300, the $75 annual fee in and by itself already is 25% of that amount.

But after the first year, the CARD Act doesn’t have any rules limiting fees. Presumably that’s why all these other fees don’t kick in until after the first 12 months is up.

My advice for 2013? Almost anything is better!

They’re almost on-par with the fee harvester cards issued by First Premier Bank. Yes, if you have bad credit you’re probably going to have to pay a fee, but that doesn’t mean you deserve to get ripped off with the excessive fees found on the Cerulean Discover card. Look elsewhere for something more affordable.

This review was written or last updated in November 17, 2013

The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

I had the cerulean discover card then they changed to MasterCard I’m not sure what the he double hockey sticks is going on here but they have put the discover card on my credit history of owing them $300 dollars when I called they said your in good standing well now they are MasterCard and the same they are screwing me with all these mo matenacies charges on top of the annual fee and of course the apr I never can use it because they are always charging me what should I do? I owe them money but I don’t like this and ever since I got the card my identity has been stolen 3 times! Help

Just a heads up on this Discover card. It is not the real deal and its no longer a Discover card. It has been changed to an Mastercard. The company Continental Finance issues this card. Do not waste your time, the card does not work for certain kinds of purchases so its not really a credit card. I found this out when I went to the gas pump to purchase fuel. I closed the account and a few months later received an email from them saying I was past due on my account. So I also did a credit check and found they dinged my credit report. I called and they did show that I had requested to close but nobody on their end ever followed through. The operator I spoke to explained that in order to have the debt removed from my credit report, I would have to fax over my report to another office. I asked if their was a direct number to call, she said there was not, on the fax…go figure. Warning…stay away from this will get screwed.

Barclays card is awesome and they are seriously into customer retention and service.

thank you for the heads up! my wife has this card, and fortunately has a zero balance due. but, should she cancel the card to avoid the “maintenance fees”? and will that adversely affect her credit? thanks in advance for any input!

Don’t go for Cerulean. I’m happy with Merrick Visa. I owned these two cards the same time. Merrick is very convenient for me to pay on line. I pay with Blue bird american express, Available balance update in a few days after pay. Sent me pin in a week. Raised the limit in six months and I can check my credit score. Cerulean, on the other hand, Cerulean never send me pin. I called many times and followed up after Ninty days. Now is nine months still none. Pay is not convenient. I was told they hold the payment for twelve days on top of what Bluebird gracing period. U can pay them direct thru their website but still take too long to wait for the balance to update. It takes them long time to take money out of my bank account till u forget about it and forgot to keep some money into your bank to cover it. Then, you got charge for insufficient fund from your bank and late fee from Cerulean. It’s double jeopardy. I closed mine now.

this cerulean card was ripoff fees from the very start. I wanted a discover card because wife has one, and its a go card to have, as I discover this was not a real discover card. please do not get this card I cancel it very quickly.

Thank you for the heads up about Cerulean Discover cards. It is so hard to keep up with all the fine print for these credit cards sometimes. My Venture One and Citi card have always treated me well, but, I don’t know if that would be the case if I had bad credit or left a balance on the card each month.