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Discover may not be able to go toe-to-toe with the big giants in the credit card industry like Visa and MasterCard, but it’s not from a lack of effort. For a company with a relatively smaller market share, however, Discover sure does have huge ideas and an aggressively customer-oriented approach to business. This company reminds me of the underdog that fiercely competes in a relentless way that inspires fans to root for them, even when up against much more powerful teams.
I've searched around the web and can't find any published information on this offer, so you Discover Card members are getting the inside scoop of this special offer.
How it Works
Earlier this month, Discover sent a Valentine to many of its cardholders that struck me as a very unique and unusual marketing scheme. The way the offer works is that Discover will agree to temporarily raise your credit line by $3,000 if you agree to do a balance transfer from a competitor of at least $3,000.
The terms of the offer are pretty attractive, as long as you complete your balance transfer within the timeframe specified. You’ll enjoy an unbeatable 0% APR promotional interest rate for 12 months from the date of the first transfer completed between February 12, 2014 and April 15, 2014. After that deadline the standard rate for purchases applies, which is currently 11.49% - 23.49% Variable. That’s not the worst rate in the credit card world, but it’s certainly much too steep for a balance transfer since many issuers offer low intro rates of 0% for 6 - 18 months.
The 11.49% - 23.49% Variable APR also kicks in after your introductory period (12 months from the date of your first transfer) expires. For that reason you should definitely try to pay off the transferred balance – or transfer it again to another cheaper card – before that higher rate is triggered.
Using a “convenience checks” does not qualify for this promotional rate – such as using it after the deadline – and it will be treated as a cash advance. The interest rate on a cash advance is currently 23.99%, so you want to be careful not to let that happen. You also cannot use the offer to pay off a Discover account; however, you can deposit a balance transfer check into your own personal bank account.
How You Can Use Your Transfer
You can initiate the balance transfer in three ways; call the toll-free Discover Card number; visit Discover’s website; or use one of the enclosed checks to pay the balance you intend to transfer. You can transfer up to four balances at a time from most major credit cards, department store cards, specialty store cards, gas cards, bank-originated loans, and some personal medical bills. The list posted on the Discover Card website is as follows:
Eligible accounts include, but are not limited to:
Credit Cards - Visa - MasterCard - American Express - Department store cards - Gas cards
- Cards issued on the Discover Network (with the exception of cards issued by Discover Bank, i.e. Discover Card)
Loans Originated from a Financial Institution - Car loans - Personal loans - Home loans - Student loans - Home equity loans
Bills - Medical - Dental
A Note About the Credit Line Increase Policy
Going over your established credit line can get you into trouble and cause you to incur fees and penalties, and even lower your overall credit profile and credit score. I was curious about what would happen if I accepted a $3,000 temporary credit line increase, but then failed to repay the entire $3,000 before the expiration deadline (for the temporary credit line). I spoke with Discover’s customer service and was told that, in that situation, they will gradually reduce your credit as you repay the balance – so that you are never suddenly over your credit line. In other words, instead of just revoking it all at once, they will reduce it in direct proportion to your repayment of that balance transfer until it is all repaid. Your credit line will then return to the normal level you had prior to accepting this special offer.
*Editorial Note: This content is not provided by American Express. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by American Express
*The content in this article is accurate at the publishing date, and may be subject to changes per the card issuer.