Although I personally haven’t used a balance transfer offer in at least a couple years, since I run CreditCardForum obviously I am constantly staying on top of who’s giving what.

As a Discover cardholder, they periodically solicit me with balance transfer promotions (as do most credit card companies). Here is an example of an email they sent me:

Out of curiosity, I clicked on the link to find out what the offer was. It redirected me to the Discover.com website where I had to login to view the promotion. This is what it ended up being (I’m copy/pasting here):

• APR for Qualifying Balance Transfers – 0.0% APR for 12 months after the first Balance Transfer posts to your Account under this offer, then your purchase APR will apply, currently 11.99%. The purchase APR will vary with the market based on the Prime Rate.
• Balance Transfer Fee – 3.0% with a minimum of $10.00 and no maximum for each balance transfer made by the reply by date for this offer.

*Note: 11.99% is the standard APR on my account, yours may differ.

Why is that a bad idea?

Is getting 12 months interest free bad? No, but it’s not spectacular either… I would say it’s just an average offer.

If you apply for a new card instead, you will probably be able to get a Discover balance transfer offer that is up to 50% longer (18 months). You can see their current offers on this page.

Going with 18 vs. 12 months is a big difference, because remember you have to pay that balance transfer fee every time you use one of these offers. So if you took the offer which was in that email, you would not only be paying 3% now, but you would also have to pay a BT fee to do another transfer in 12 months (if your debt isn’t paid off before then).

Apply for a different Discover card?

As is the case with EVERY bank, you cannot transfer balances among their cards. So that means you cannot transfer your balance from one Discover card to another.

However I’m assuming you’re looking to transfer your balance from elsewhere. If that’s the case, you might want to consider applying for another card from Discover (one that you don’t have).

For example if you currently have the More (their most popular card) then alternate options would be applying for the Motiva or Open Road card and taking advantage of whatever 0% promotions they’re currently offering.

The lesson?

Not to beat up on the Discover card balance transfer offers, because this hold true for all issuers: as a rule of thumb, generally you won’t get the longest 0% offers from your existing card. Instead, you almost always need to apply for a new card in order to get the best deal.

The reason banks do it this way is quite obvious – if you already have a card, then you’re a captive audience. But in order to convince you to get a new card, they know they have to go that extra mile and be uber generous with their signup incentive.

One of my favorite things about Discover are the unexpected little opportunities that pop up to earn extra rewards. For most of them I receive a postcard in the mail notifying me, but I never received one for this promotion.

To see it, login to your Discover account and from the main screen, click on the “View All Promotions” button:

Once there, scroll waaaay down, almost to the bottom. You will see this:

(Screenshot was taken after I enrolled. If you haven’t signed up yet there will be a button to.)

Click on the “Double Cashback Bonus” and you will get the details for this promotion:

• Runs from January 1st through December 31st, 2012
• Gives you unlimited 2% cashback bonus on any of the following when you set them up to automatically be charged to your Discover card: cable and satellite TV, internet, phone, and satellite radio

Often times, credit card issuers like to hide all kinds of exclusions in the fine print about the types of purchases that qualify for a given category. But it looks like this is a pretty straightforward deal with no surprises:

This could net you some decent cash back if you do it all 12 months. Here’s a hypothetical spending scenario:

Cable TV + Internet = $100 per month
Cell Phone = $130 per month
————————————————————————–
Total spent = $2,760 for the year. 2% cash back = $55.20

And after you enroll, they really want you to use it because the next screen takes you to the phone numbers for the largest cable/satellite TV, cell phone, and internet providers.

One little caveat though is that you need to realize that making one-time payments on these provider’s websites isn’t supposed to count. The rules make clear that in order to get the 2% cash back offer, you need to enroll the given bill in auto-pay. That has to be setup through the provider.

Of course at the end of the day, this promotion might not be anything to write home about when you consider there is a Discover card that will earn you 2% on everything all the time.

Q: Should I cancel the Discover Payment Protection that I just enrolled in? I Googled it and am frightened to see all these things calling it a scam and even class action lawsuits. What’s up with this?

A: Before we get into whether it’s a scam or not, let’s go over how the payment protection plan from Discover actually works…

How much does it cost?

You pay $0.89 per $100 of your balance each month. When you think about it, that means if a $100 balance was carried for 12 months in a row, you will have paid a total $10.68 ($0.89 x 12). So in other words, you will have been paying what would equate to be 10.68% of your average monthly balance for this benefit… a steep price to pay. Is it worth it or not? We’ll get to that next.

What does it cover?

So what is payment protection for Discover, anyway? It’s a program that defers minimum payments on your credit card account as follows:

Events that qualify for 1 month deferments

With these so called “celebration events” your minimum payment is only deferred for one month; graduation, new job, promotion, retirement, childbirth, adoption, marriage, moving

Events that qualify for 24 month deferments

With these “Hardship Events” you might be able to have your minimum payments deferred for up to 24 months; federal/state disaster, disability, death of a domestic partner, spouse or child, leave of absence, unemployment (if involuntary), disability, hospitalization

An important warning you need to know is that there are a number of qualifications and restrictions. Just because you experience one of these events it does NOT always mean you are eligible. I recommend you read about payment protection on credit cards to learn about some of the eligibility requirements that might be in the fine print.

Events that qualify for cancellation of debt

If you (the accountholder) were to die, you might qualify for your debt to be cancelled with the Discover payment protection plan (up to $25k balance on your enrolled Discover account). But there are restrictions and this benefit is not offered in any states or territories where it is regulated as an insurance benefit. At the time of this review, that means if you are a resident of the following locations you don’t qualify: OR, VI, RI, AK, TN, IA, WI, MT, NV, PR, GU.

Is payment protection a scam or not?

Let’s break the answer down into two parts:

(1) Class action lawsuits: Although none of been recently filed that I’m aware of, in the past few years there have been states that filed class action lawsuits against Discover alleging “slight-of-hand sales tactics” were used to enroll customers in these plans. Whether that’s true or not I do not know and since the cases are still pending, it’s too early to say whether or not that’s an accurate accusation until there’s a verdict.

(2) Overpriced: Meanwhile some people feel the program is not a “scam” but that it’s just a bad deal, because the benefits aren’t worth the cost. If you read up on how credit card payment protection works it is true that these programs are rarely worthwhile. However we shouldn’t single out Discover with this, because almost every credit card issuer sells these plans and they are more or less the same.

Do you have an experience with a Discover payment protection plan, either good or bad? Share your thoughts in a comment below!

Written Sept. 2011

Q: I have seen a lot of commercials lately for a Discover that gives 5% cash back. I am interested in this but am concerned about acceptance. Is the Discover credit card accepted everywhere?

A: If you haven’t used Discover and aren’t very familiar with the company, you may be surprised to learn these facts about their credit cards:

• Discover cards have been around for over 25 years
• In 2010 it was announced that Discover is now accepted at over 90% of stores/merchants in the United States
• Discover is the most widely accepted card in China, even more accepted than Visa and MasterCard
• Acceptance in other countries is growing every year

If you live in the United States, Discover card is accepted almost everywhere (90% of merchants) so using it won’t be a problem. If you want to learn more about their 5% cash back credit card, check out our Discover More card review.

Here are some other interesting tidbits about Discover:

• Unlike most credit cards, Discover uses American customer call centers in places like Utah, New York, and other states. That means you can actually get real assistance when you call customer service.
• Discover is considered to be the pioneer in offering no annual fee cards and rewards. They turned the industry upside down when they began offering them in 1985.
• It is the only credit card accepted by the U.S. Customs Service for paying customs duty
• There are over 50,000,000 Discover cardmembers

Conclusion?
Is Discover card accepted everywhere? Well in the United States it’s pretty darn close to that! With no annual fee and high cash back, it’s definitely something everyone should have. Check out our sponsored offer for the 5% cash back Discover More.

As I’m sure you know just about every credit card company now has their own online shopping portal (like ShopDiscover) to let their cardmembers rake up rewards.

They more or less all work the same way… you login to your account and from there, click on the retailer you want to shop at. A cookie is placed on your browser when this happens and the credit card company gets a kickback for any purchases you make on the store’s website. They then turn around and give a chunk of this money back to the cardholder. That’s how they can afford to give you such high cash back.

3 ShopDiscover Tips You Need To Know…

Being that they were among the first credit card “malls” it comes as no surprise they have one of the largest selections (the ShopDiscover retailers list is huge) and some of the highest cardholder payouts around. And if you play your cards right (literally) you can save even more money when using this program. Here are 3 tips every savvy shopper must know:

1. Use coupon codes too (but be careful)

Sure, saving 10% at 1800Contacts.com is already a nice chunk of money, but I save even more by using a coupon code in conjunction with ShopDiscover. Of course every retailer is different and I can’t guarantee this always works, but for me it has.

However you need to do this the right way! Just about every coupon website stuff’s your browser with their own cookie when you click on a store’s link (or they do it through those annoying coupon copy/paste boxes). If you did this after you already entered the store through the ShopDiscover portal, the coupon website’s cookie may very well wipe out the Discover cookie… and that would mean the transactions wouldn’t count!

So gather your coupon codes ahead of time, before accessing ShopDiscover. As an added pre-caution, it may not be a bad idea to clear your cookies before entering.

2. Check the ShopDiscover retailer list often!

If you’ve been a Discover cardmember for a while, it’s easy to just assume you already know the participating retailers (I’m guilty of that). A good chunk of the merchants – I would guess 70% of them – do remain constant. However there are some merchants that may only participate in the program as a special promotion.

For example during the Christmas season of 2010, Groupon was a special participant with a whopping 20% Cashback Bonus! I didn’t find out about it until December which was really too bad, because during the month of November I had spend $45 buying 3 Groupon restaurant deals. If I would have checked ShopDiscover first and saw that, I would have been able to save an extra nine bucks!

So as a general rule of thumb, always check their website before spending money online… you never know what new participants might pop up.

3. Don’t get screwed when you redeem!

Last but not least, how you spend your Shop Discover Cashback Bonus is also extremely important!

In order to get the maximum value for your accumulate Cashback Bonus, be careful when selecting your redemption options. If you choose direct deposit or statement credit, the rewards you get will be at face value (i.e. $100 in Cashback Bonus will equal $100). But with other options like the partner gift cards, you will be able to get a lot more for your money, since the value of the gift cards are always above the face value. Lately, Discover has started to offer more merchandise, but I still find the partner gift cards offer the most bang for your buck.

Do you have the best Discover card?

The most popular Discover credit card is the More. Its 5% cash back categories just can’t be beat.

But for other spending outside of the Shop Discover program, you may want to check out our top cash back credit cards to make sure you are getting the maximum rewards possible.