Posted by William Charles on February 24, 2018
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Published on February 24th, 2018 | by William Charles

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Discover To Remove Many Card Benefits After February 28th, 2018

This was originally posted on December 2nd, 2017. Discover is now communicating this directly to cardholders on login.

Discover has announced that they will to remove the following credit card benefits after February 28th, 2018:

  • Extended Product Warranty
  • Return Guarantee
  • Purchase Protection
  • Auto Rental Insurance
  • Flight Accident Insurance

Official Statement

Discover has made the following official statement:

Regarding cardmember benefits changes:

We regularly evaluate our cardmember benefits to ensure that we are meeting or exceeding our cardmembers’ current needs and expectations. We recently notified Discover cardmembers that due to prolonged low usage, effective February 28, 2018, we will discontinue Extended Product Warranty, Return Guarantee, Purchase Protection, Auto Rental Insurance and Flight Accident Insurance.

We will continue to offer and invest in the many free benefits in which Discover cardmembers find the most use and value, including Price Protection, 24/7 account monitoring, our $0 Fraud Liability Guarantee on unauthorized purchases made with a Discover Card, FICO® Credit Scorecard, and our recently launched Social Security Number Alerts, where, for cardmembers who activate, we monitor thousands of risky websites and alert them if their Social Security Number is found.

 

For more information about these and our many other cardmember benefits, visit Discover.com/benefits.

Our Verdict

In the conversations I’ve had with Discover it seems like the reason they are removing these benefits is that they are under utilized and they want to introduce benefits more cardholders use. Reading between the lines I’d say that the benefits being removed are overused by a small minority of cardholders and they want to replace those with benefits used by a majority of cardholders. I think the biggest loss is probably purchase protection, but that will vary from cardholder to cardholder. Obviously losing benefits like this is never good, but it will be interesting to see what if any benefits Discover will add instead.

 



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Dave C
Dave C

I mean, these are all insurance products basically. By their very nature, they’re going to not be used that often. Sound like a cop out to me. I mean, how many warranty claims do they per card?

Blue
Blue

I have a suspicion that the automation of claims for these types of products we’re seeing pop up all over have changed the rating and cost that the underlying insurance providers are billing cc companies as contracts renew. Expect to see changes across the industry if this is the case.

Dave
Dave

That sounds like the opposite of what they’re saying then, since that would really be from too many claims i.e. overusing.

J. Grant
J. Grant

What they’re telling us is just pillow-talk.

The reason the benefits are being taken away is because they’re too expensive for Discover. They’re trying to cut costs. That’s all there is to it. What they tell us, the consumers, is just fluff. Always is.

It’s always “for the benefit of the consumer”; in reality, it’s for the benefit of the shareholders and company directors that get hundreds of thousands, or even millions in yearly bonuses for saving the company many millions of dollars.

Wong
Wong

They should start with cutting their mailing costs because I get two Discover It invitations per week.

JamaicanTraveller
JamaicanTraveller

Between me, my wife, my mom and 2 of my bothers we see ~ 10-20 mailers a week, across different households. And with the exception of 1 person we all have Discover cards already… The ads tend to be about applying for a new card or balance transfer deals (which are available online)

Jacque
Jacque

I was getting those,but a simple call to customer service has pit an end to that. I feel these mailers leaves an open door to fraud anyway.

Peter
Peter

Automation is for price protection claims and Discover is keeping that benefit.

alvinroast
alvinroast

I think you nailed it.

Charlie
Charlie

I wonder if this is the beginning of a trend. Let’s keep an eye on Chase, Citi, and Amex.

Frank
Frank

Hardly. Discover only accounts for a negligible share of the whole credit card industry. If Amex is the one to do so, that would be influential.

uclalien
uclalien

I’m curious why you say this considering Amex has an even smaller share of the credit card market.

LNK
LNK

Both on overall market share and purchase volume, Amex is double of Discover so I am cureious why you claim Amex has a smaller share

B.C
B.C

Nice catch!

Sarah
Sarah

Discover cardholders,are not really the same as Citi, Chase, AMEX, etc. Discover fills a niche for the “casual” cardholder. All their cards have the “everyman” in mind whereas the above target both the everyman as well as the high end cardholders and business cardholders.

alvinroast
alvinroast

Sounds like an opportunity to me. Thanks for the insight.

Janna
Janna

Removing the auto rental insurance due to lack of use is, in my opinion, looking at the equation backwards. Most people, I think, subscribe to insurance plans not because they plan to use the heck out of them, but because they want to minimize their risk exposure. This is not the same as under using a coupon program, for example. I prefer a card with this benefit, but not because I plan to heavily make use of it. I want it just in case.

Winston
Winston

Even before this I’ve been thinking about getting rid of my Discover cards.

Is there any benefit to them over Citi, Chase, Amex, etc? Other companies have better sign up bonuses, special offers (Amex), transfer to airline miles, etc. Now the other’s benefits will be better too. Is there anything I’m missing?

Blue
Blue

Discover has some special offers, the five percent categories, and free Fico. No fee decreases utilization % and is often one of the oldest cards people have in their stable. Don’t see why you’d actively get rid of it.

Winston
Winston

five percent categories – these could be alright if I’ve maxed out chase 5%, don’t have any sign up bonuses, and they are decent categories. Now I have to add “if I don’t need purchase protection, extended warranty, or return guarantee”

% utilization and age of credit – selling points for sock drawer but not for actually wanting to use it (and not that big of a deal anyways)

free fico – everyone has this now

AG
AG

I would understand this logic if question of getting new card was there. But I one already has it there is no reason to cancel.

Jeffrey
Jeffrey

And 24/7 North America-based customer service. I hate to say this, but dealing with Capital One CSRs is, a lot of times, a pain in the neck.

Sluce
Sluce

Definitely one of my favorite features … next to the quarterly bonus categories, which I always take full advantage of.

rob
rob

don’t get rid of them, put them in your sock drawer

Sarah
Sarah

There’s no benefit to getting rid of your Discover car, there’s no annual fee and they have special offers once in a while.

Darv
Darv

Benefit to closing is to churn.

Jack
Jack

Churning discover cards? They don’t offer much of a bonus for new sign ups so how will that be a benefit?

Darv
Darv

They used to offer $150 sign up bonus.

Even now, might make sense to do double cash back for a year and then churn. I don’t know their latest churning restrictions. I haven’t had a Discover card in about two years.

DrNefario
DrNefario

Double cash back first year for new card members could be useful.

Luke
Luke

I’m a student, so no money, no history. Discover miles will be one of the next cards I apply for because it will be the easiest *effective* 3% card I could get right now.

$100 from the referral is just gravy.

zalmy

The referral is $50. Used to be $100 because it was $50 of rewards (miles, cashback) which naturally doubled after the first year, but now it’s a statement credit, so it’s a flat $50.

Jeff H
Jeff H

I am one of those “low use of those services” customers. I have Discover for the 5% categories that are often easy to max out or make a good dent in. I like that Discover pays the cashback monthly.

TomJ
TomJ

Same here. I never ever think about any of those extra benefits and have never used one of them. I am with Discover for the cash back.

BTW, when I saw the title above, I about choked on my bagel. I was worrried about losing my 5% categories!

AG
AG

Discover was my go to card few years back. Extended warranty had gotten me new laptop when previous one broke within two years. Everytime I have big electronic item that could break I have trusted discover. Just price protection remaining chase would alright for that as you can file claim online.

Matthew

I’ve used the purchase protection when I dropped my iPhone the first day.

The auto rental insurance is probably the biggest money saver since I can avoid paying for insurance, but I use my Prestige for that since it has the best travel insurance.

I hope Citi and Chase don’t follow Discover’s moves, although if Discover is able to offer alternative benefits with good value, it may be a way to offer more value to customers that have multiple credit cards with the same benefits.

Darv
Darv

How is Discover competing?

What product(s) do they have that are in any way better than the competition?

Other than their one year double cash back promotion, why are people here using Discover cards?

Duke I
Duke I

When Amazon Payments existed, I looked forward to collecting $150 total for my 2 Discover cards each year during the online shopping category. Although Discover no longer advertise it, the Cashover feature still work on my cards at Walmart which allow me to get cash from the card at the register without it being considered a cash advance.

boridi
boridi

Good website interface (unlike Chase)
Good customer support reps (unlike Amex)
Good 5% categories (unlike everyone except Chase)
Good checking/savings accounts to go along with credit cards

Darv
Darv

Cap1 360 is about to change the interface from its old ING Direct days. Once it does that, I’ll be looking for a new primary checking. I don’t like Ally’s that much either. I might give Alliant another try or maybe Discover. If I go with Discover, perhaps time to pick up the It card.

boridi
boridi

I have had the new Cap One 360 interface for a few months. It’s bad… worse than the new one Chase rolled out 1 or 1.5 years ago.

Gerald
Gerald

The best 5% categories belong to the Citi Dividend. It’s $6000 a year rather than $1500 a quarter, and they have drug stores one quarter, where it’s easy to MS.

Duke I
Duke I

Discover make you go through a lot of hoops to receive protection when needed, so really no loss. AMEX make things more simple and easy and can all be completed online.

Evan
Evan

I have received Extended Warranty and Purchase Protection benefits very easily. Not happy to see them go. At least they’re keeping Price Protection. The problem will be any big purchases, like electronics, on Amazon. Amazon Visa by Chase offers EW and Purchase Protection, but not Price Protection. I think Freedom still offers all three, but this year didn’t have 5% on Amazon at all. This is not good.

Evan
Evan

As I explained above, for me this is very negative. And the worst is that I don’t see what benefit they could add to even things up.

Peter
Peter

Definitely not pleased to see removal of purchase protection and extended warranty. IMO, a card needs to offer at minimum those two and should ALSO offer price protection. Those three benefits give me the piece of mind to put my purchase on the credit card. It also breaks ties when cards otherwise earn the same or similar rewards on the base purchase.

I’ll now have to consider if purchasing an item on the 5% category is worth it. I’m going to have to factor in the cost of adding the additional 1 year warranty out of pocket (from retailer, SquareTrade, etc.) to calculate true cost of using Discover. Not to mention the lack of piece of mind that the 90 day purchase protection provides too.

Basically, after this change I’ll probably just use my Discover to purchase goods that weren’t covered by the purchase protection and extended warranty benefits. And gift cards if there are good opportunities to just pocket the 5% cashback.

Ender
Ender

The benefit will not be available for purchase made after Feb 2018 or they will be available all together?

e.g. someone bought a laptop this past BF with discover card, will they be able to claim extended warranty after Feb 2018 (assuming all current terms are met)?

David
David

I just got a tweet from Discover saying that purchases made before Feb 2018 will still have the benefits.

Wei
Wei

after February 28th, 2017:

》 typo? Should be 2018 as the title

rct12345
rct12345

Link to the official announcement?
I can’t seem to find this info anywhere on their site.

Master Allan
Master Allan

I did like the auto rental insurance in the background. I accumulate a good amount of rewards points shopping 5% categories like Amazon.com this quarter. Then I use $20 of that cashback for a $40 voucher at enterprise.com. I’ve rented from enterprise for 3 days and paid nearly $0 out of pocket for the rental thanks to the $40 voucher I paid $0 for anyway. Better to put a 1,000 miles on their rental car, swipe my discover at their checkout, and have my personal and discover car insurance as back-up.
Too bad going away.

Andrey
Andrey

Isn’t there one $40 certificate per rental? I mean, was your 3 day rental $40 only?

Jab
Jab

Chatted about extended warranty, prior purchases is covered

Extended Product Warranty will be discontinued effective 2/28/18. Only purchases made prior to 2/28/18 will be eligible to be covered under these terms.

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