Review of Discover Gold Card



The Discover Gold Card was last reviewed on : 5th March 2005

Summary - The Discover Gold Card is actually a cash rebate credit card. The cash rebate is based on every $2,000 that you spend on the credit card. For every $2,000 you spend up to $6,000, you will get $20.00 rebate (ie 1% rebate percentage). For every $2,000 spent above $6,000, you get $10.00 cash rebate (ie 0.5%). You are earn up to $500 in cash rebates in a year (ie spending of up to $94,000). If you do spend $94,000 on the Discover Gold Card, your annual cash rebate percentage turns out to be 0.0532%.

There is no annual fee and APR at Prime Rate plus 8.49% is high. There is a 0% introductory APR on balance transfers for 12 months. The Discover Gold Card has a low minimum finance charge of $0.50 and a grace period of at least 25 days (more than the usual 20 days in most other cards). However, the Discover Gold Card uses the 2-cycle average daily balance method (including new purchases) of computing balances. This will less favourable to those who carry a balance, but are looking to reduce it over time.

To sum up, the Discover Gold Card offers a tiered cash rebate program based on annual expenditures, in which rebate percentage declines from 1% to 0.5% once expenditures exceed $6,000. Though there is no annual fee, a 25 day grace period, the APR is high and Discover also use the two-cycle average daily balance method of calculating balances.

I never liked the idea of a tiered rebate formula, not to mention one with a declining rebate payout as annual expenditure increases. For those who spend much higher than $6,000 on their credit cards, there are other Cash Rebate Credit Cards that offer better cash rebate payouts than the Discover Gold Card. You may want to consider the Discover Platinum Card, which pays 1% rebate, but allows you to effectively get a 2% rebate if you exchange your cash rebate for double the value gift certificates. You may also want to look at Citi Dividend Platinum Select Card or AT&T; Universal Cash Rewards Card. Both have simple rebate formula (1%), but allow you to earn 5% on "everyday purchases". Both these cards also have low apr and use the more standard average daily balance method of calculating monthly balances.

As with all Discover Cards, you need a minimum annual income of $15,000 to apply. Discover card statements can be downloaded into Money or Quicken.

Positives
  • No annual fee
  • 25 day grace period


Negatives
  • Rebate declines as annual spending exceeds $6,000
  • High APR
  • Uses 2-cycle average daily balance method to calculate monthly balances


Discover Gold Card
Reward Benefits
Rebate Percentages Reward program is based on every $2,000 of expenditure annually.
Earn 1% rebate on purchases of every $2,000 up to $6000
Thereafter, earn rebate at 0.5% for every $2,000 spent after annual expenditure exceeds $6,000
Rebate Limits $500
Credit Limit Up to $50,000
Travel and Insurance Benefits
$250,000 in travel insurance
$25,000 in auto rental insurance
Other Benefits
Online account access
24 hour cardholder service
Cost/Fees/Interest rates
Introductory rate 0% introductory APR on balance transfers for 12 months
Annual Fees No annual fee
Purchase APR Prime Rate plus 8.49%
Balance Transfer APR Prime Rate plus 8.49%
Cash Advance APR 20.99%
Penalty/Default Rate APR Prime Rate plus 10.99%, 15.99% or 19.99%
Min Finance Charge $0.50
Grace Period 25 days
Balance Calculation Method 2-cycle Average Daily Balance (including new purchases)
Cash Advance fee 3% min $5.00
Over-the-credit-limit fee $15.00 - $1000 or less
$35.00 - greater than $1000
Late Payment fee $15.00 - up to $100
$25.00 - $100-$1000
$39.00 - greater than $1000



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