Tag: Discover

Earning Cashback, Reviews

Discover it Review: What’s the Catch of 5% Cash Back?

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The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Discover it Review: What's the catch of 5% cash back?

Updated December 1, 2016

Are you searching for a no annual fee card that has the potential for 5% cash back rewards? Then Discover it® Cashback March may be a good fit for you, but keep in mind that the categories may not always sync up with your routine purchases.

The Discover it credit card actually comes with several perks, including an introductory 0% interest rate for 14 months on new purchases and balance transfers, no annual fee, and a cash back program. It also has a generous introductory offer that matches the cash back you earn at the end of your first year that makes it a great choice upfront.

But what about after the promo ends? We’ll run down how the card works.

5% Cashback Bonus

The Realities of 5% Cash Back

5% cash back does not mean on everything. Discover, similar to programs like Chase Freedom, offers 5% cash back on select categories every quarter and all other purchases will receive 1% cash back. There is a cap on 5% cash back on up to $1,500 of purchases. There is no cap on the 1% cash back purchases. You can earn 5% cash back in rotating categories each quarter like gas stations, restaurants, Amazon.com, wholesale clubs and more, up to the quarterly maximum each time you activate.

From January until March 2017, the bonus categories are gas stations, ground transportation and wholesale clubs.

With a cap on the 5% cash back of the first $1,500 of purchases in a relevant category, you can earn a maximum of $75 per quarter in cash back rewards and $300 per year.

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How do I sign up?

Discover it cardholders do have to “opt in” to the 5% cash back categories each quarter. You can have Discover send you email reminders with the ability to opt in via email or you can opt in after logging into your account.

Do points expire?

Cash back rewards can be redeemed with no minimum threshold and can be redeemed as a statement credit, a credit on Amazon.com orders, a deposit into your bank account, and more. Cashback rewards never expire as long as your account is in good standing. Discover can close your account if has been inactive for 18 months.

Bonus offer for new customers

Additionally, the Discover it card will match all the cash back you earn dollar for dollar at the end of your first year. The double cash back will be applied to your account balance after the end of the 12th billing cycle.

Cashing Out and Perks

Discover provides the option to use your cash back as either a statement credit or a direct deposit into your bank account.

You can also leverage up by purchasing a gift card or eCertificate through the redemption portal and get additional $5 to $20 more. For example, $80 cash back will get you a $100 Banana Republic gift card.

Through a partnership with Amazon, you can use your Discover it cash back to pay for Amazon purchases while checking out. Other CashBack Bonus partners include iTunes and Overstock.com.

Discover it also offers access to your FICO credit score for free on each monthly statement.

Protections

Extended Product Warranty: Discover will extend the terms of an existing, eligible warranty on a product for up to a year if the existing warranty is for 36 months or less.

Purchase Protection: Discover will cover eligible purchases up to $500 if they are damaged or stolen within 90 days of purchase.

Price Protection: Discover will refund card members the difference up to $500 on eligible items if you find a product at a lower price at any store within 90 days of the original purchase.

Fees & Gotchas

There is no annual fee for the Discover it card. The balance transfer fee is 3% of the amount of each transfer. There is no late fee the first time you pay late. After that, late payments are up to $37. Discover does not charge foreign currency transaction fees, but it also isn’t as widely accepted like VISA, MasterCard or AMEX.

Discover it Review

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How it Stacks Up

The Citi Double Cash credit card might be a better option if your goal is to earn as much cash  back as possible. The Citi Double Cash credit card offers up to 2% cash back with no cap on the amount you earn as long as you pay on time, which makes it a good all-around card as you won’t have to track and time your spending to take advantage of extra cash back in bonus categories like the rotating 5% bonus cash back categories offered by Discover it. However the Citi Double Cash card has high APRs, which means you should not carry a balance on this card.

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The Capital One Quicksilver card also offers a cash back program, however you can only earn 1.5% with this card. One difference is that the Capital One Quicksilver card offers a sign-on bonus of $100, which is something you don’t get from either the Discover it card or the Citi Double Cash card. That $100 sign-on bonus can easily be made up over the long run by the 2% cash back offer of the Citi Double Cash card or the 5% bonus cash back categories offered by the Discover it card.

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The Bottom Line

Although this card doesn’t offer the highest all-around cash back rewards program on the market, it does offer many cash back opportunities and an attractive 0% introductory APR with no annual fee. If you are shopping for a card with all of these characteristics, it might be worth giving the Discover it card a try.

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Credit Cards, Earning Cashback, Reviews

Discover it Chrome Review: 2% Cash Back on Gas and Dining

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The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Discover it Chrome Review

There are plenty of credit cards that will reward you for spending at gas stations and restaurants, so choosing one from the bunch can present a challenge.

The Discover it Chrome card has two stand out selling points. It offers a dollar-for-dollar cash back match the first year, and you can redeem the cash back you earn at any amount.

In this post, we’re going to cover the details of this program, including:

  • The basics of the Discover it Chrome
  • How to redeem cash back
  • The fine print details
  • The benefits and protections
  • The pros and cons

The basics of the Discover it Chrome

  1. 2% cash back at gas stations and restaurants.

Earn 2% cash back on gas and dining. The cap for the 2% category is $1,000 in combined purchases per quarter. New quarters begin on Jan. 1, Apr. 1, July 1, and Oct. 1.

  1. 1% cash back on all other purchases. Earn 1% cash back on purchases outside of the 2% category excluding transactions like cash advances and balance transfers. Spending at gas stations and restaurants beyond the $1,000 quarterly cap also earn 1% cash back.
  2. A dollar-for-dollar match the first year plus other bonus cash back deals.

Cash back earned by new cardholders the first year is automatically doubled after 12 months.  You also have the opportunity to earn cash back bonuses when you shop with select retailers online through Discover Deals.

Here are just a few examples of the available online retailers:

  • Apple – 5% cash back
  • Walmart – 5% cash back
  • Nike – 15% cash back
  • Carnival Cruises – 5% cash back

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LearnMore

How to redeem cash back earned

As mentioned, you won’t have to wait for your cash back balance to reach a certain threshold before you can put it to use. You can redeem cash back starting at 1 cent for:

  • Statement credits
  • Cash deposits into an account
  • Charitable donations
  • Products and services through Amazon and Discover Deals

There are two exceptions to this rule. If you want to redeem cash back for gift cards or eCertificates, you have to wait until your balance reaches $20.

The cash back bonus is calculated at the end of each quarter and added to your bonus account within two billing periods. So, although there’s no redemption threshold, there is a waiting period involved before you can use the cash.

Cash back earned never expires. If your account is closed or goes inactive for 18 months, whatever cash back you earned will be credited to your account.

Introductory APR and balance transfers

The Discover it Chrome has an introductory deal for new purchases and balance transfers as well. There’s 0% APR on balance transfers and new purchases for the first 14 months. Afterward, interest is 11.49% to 23.49% APR. The balance transfer fee is 3%.

If you need to make a large purchase, the cash back dollar-for-dollar match promotion coupled with the 0% APR deal could be useful. You can slowly pay off the balance of your purchase for 14 months without interest and get the cash back match at the end of the year.

The fine print

The Discover it Chrome has no annual fee or other hidden fees you need to be aware of. You won’t be charged a late fee on your first late payment. If you’re late more than once, the fee is up to $37. The Discover it Chrome also has no penalty APR and no over-the-limit or foreign transaction fees.

One piece of fine print you do want to pay close attention to is that the 2% category has some restrictions besides the $1,000 spending cap per quarter. Specifically, spending at warehouses, wholesale stores, and discount stores won’t qualify for 2% cash back. This could be a deal breaker if you usually fill up on gas at any of these stores.

Benefits and protections

FICO Credit Score
Discover it Chrome cardmembers get a TransUnion FICO score on each credit card statement. This benefit is worth highlighting since getting a FICO score directly from myFICO.com isn’t cheap.

A single credit score and report costs $19.95 and the starting price for the credit monitoring plan is $19.95 per month. Since the FICO score is commonly used to determine creditworthiness, this Discover it Chrome feature is a valuable one.

Freeze It
You can freeze your account if your card is lost or stolen. Discover won’t authorize purchase transactions until you request to unfreeze it.

Zero Liability Protection
You won’t be held liable for unauthorized purchases on your card.

Pros and cons

Pro: The cash back match during the first year. You can look forward to twice the amount of cash back for your spending.

Con: 2% category cap. The $1,000 max for the 2% category may be limiting depending on your spending habits. You have room to spend a little over $330 per month on gas and groceries combined to stay within that cap. If you shop for groceries often or have a long commute each day, this cap may only scratch the surface of your monthly gas and food budget.

Pro: Easy redemption. The Discover it Chrome has an uncomplicated redemption program. You can turn your cash back into actual cash through statement credit and cash deposits. Or choose to redeem for products, gift cards, and charitable donations.

Con: Shopping restrictions. If you usually get gas at discount stores that are ineligible for the 2% category, compare the store savings against what you can potentially earn in 2% cash back at a regular gas station to see which will benefit you the most.

Pro: Low on fees. There are no annual fees, foreign transaction fees, penalty fees, or over-the-limit fees. It’s safe to say the Discover it Chrome card is not going to nickel and dime you.

Who will benefit the most from the Discover it Chrome?

The Discover it Chrome could be a good choice for someone who wants a simple cash back program. There are no revolving categories to manage and you can use cash back earned at any amount.

But, for a bigger spender, this card may not be the best deal because of the $1,000 quarterly cap in the 2% category. Instead, you may get better overall value from a card that gives more than 1% cash back on spending with no limits like the Citi Double Cash. With the Citi Double Cash, you earn 1% cash back when you make a purchase and another 1% cash back when you pay off the balance.

Review your spending habits before choosing the Discover it Chrome to make sure spending within the category cap is realistic for your family.

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Credit Cards

How (and why) to Request a Credit Limit Increase with Discover

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Request a Credit Limit Increase with Discover

We’ve covered how to request a credit line increase with most of the major credit card companies now, including American Express, Barclaycard, and Capital One. But if you have a Discover card, you can request a credit limit increase on your card too.

Before you go about requesting a credit limit increase from Discover, make sure you take time to think about why you want to increase your credit limit. As we’ve mentioned before, there are good reasons and bad reasons to ask for a higher credit limit, so make sure you ask for a limit increase for the right reasons.

How to increase your credit limit with American Express, Capital One and Barclaycard

Why shouldn’t you ask for a credit line increase?

In some of the previous posts in this series, we’ve covered some of the good reasons why you might want to ask for a credit limit increase (like automatically reducing your utilization ratio), but sometimes people ask for credit limit increases for the wrong reasons. Here are some of the reasons why you shouldn’t ask for a credit limit increase.

If you don’t plan to use it the right way. Requesting a credit limit increase so you can spend more money every month is not a smart idea. This type of behavior can lead to credit card debt and end up costing you a significant amount of money in interest. The key thing to remember is that whatever you charge on your credit card will eventually have to be paid off.

Using credit limit increases to earn more rewards. This may or may not be a good reason to ask for a credit limit increase. Credit card rewards like cash back or points for travel can help you save money, but you have to be careful about how you use your credit card to earn them wisely. Paying any interest reducing or completely removes the advantage of earning rewards.

Requesting an increase from Discover

Like the other cards in our series, you can quickly and easily request a credit limit increase if you are a Discover cardholder. Just visit www.discover.com and log in to your account to get started.

Step 1

After you’ve logged in to your account, click Manage.

Step1 (1)

Step 2

In the popup menu, click Credit Line Increase.

Step2 (1)

 

Step 3

The credit line increase request page will show your current credit limit, the amount you have available in your credit line, your cash advance credit line, and how much of your cash advance credit line is available.

You’ll have to enter your total annual gross income, the name of your employer, and your monthly housing cost or rent payment. After you enter all of the necessary information, hit submit at the bottom of the page.

 

Step3 (1)

According to their website, Discover may pull a credit bureau report in order to process your credit limit increase application. This can affect your credit score by lowering it a few points.

If you plan to fill out a joint application to increase your credit line, you will have to contact customer service at 1-800-347-2683. It’s also important to note that residents of Ohio and New York must also call to request an increase and are not eligible to complete the online application.

Discover does have some additional recommendations for customers seeking a credit limit increase:

  • You may request to have your credit line increase decision re-evaluated if you wish to have a larger increase than the amount you are offered. If you do so, a “comprehensive check of your credit” will be performed.
  • Discover will ask you in advance to approve any credit check that might affect your credit rating.
  • For the best chance of approval, Discover recommends that you wait at least 6 months before applying for another credit limit increase, but your credit limit is being constantly re-evaluated and could be increased at any time.

Your credit limit increase was approved. Now what?

If you applied for a credit limit increase for the right reasons, you should expect to do nothing different with regard to your spending habits. Just make sure you keep paying your credit card off in full each month to avoid interest charges.

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College Students and Recent Grads, Reviews

Discover Student Loan Review

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The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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Have you exhausted all your options with Federal Student Aid, and still need extra help covering the costs of college? Applying for a private student loan may be your next step.

Keep in mind private student loans don’t offer many of the benefits Federal student loans do. Interest rates are often higher, and repayment assistance isn’t always available. That’s why it’s recommended you fill out a FAFSA and submit it first – you’ll want to claim any grants and scholarships available to you before turning to private student loans, as grants and scholarships don’t have to be paid back.

Thankfully, Discover’s undergraduate student loan is fairly similar to the Federal Direct PLUS Loan, which means it could be a good option if you need more money to cover tuition.

Details of the Discover Student Loan for Undergraduates

Discover’s undergraduate student loan claims to be a “zero fee loan” as there are no application, origination, or late fees associated with it. On top of that, you can apply to cover 100% of your cost of attendance (the minimum loan amount is $1,000).

Its variable interest rate ranges from 2.99% to 9.12% APR, and its fixed APR ranges from 6.15% to 11.99%. The standard repayment term is 15 years compared to the 10 year standard for Stafford Loans.

You can choose whether to make $25 fixed, monthly payments while you’re enrolled in school, or to defer your payments until 6 months after graduation. Choosing the first option results in less money paid over the life of the loan and lower monthly payments. If you can spare $25 per month while you’re in school, you should strongly consider this option.

Here’s an example of what repayment looks like: if you borrow $10,000 and have a variable 2.99% APR, your monthly payment will be $77.78, and you’ll pay a total of $13,999 over the 15 year repayment period. A variable 9.12% APR gets you a monthly payment of $141.64, and you’ll pay a total of $25,494 over the 15 year repayment period.

Under the same circumstances, but with a 6.15% fixed APR, you’ll pay $107.45 per month, for a total of $19,341 paid over the 15-year repayment period. An 11.99% fixed APR results in monthly payments of $181.03 and a total of $32,584 paid.

[7 Things You Need to Know About Private Student Loans.]

How Does a Discover Student Loan Compare to Federal Student Loans?

Discover includes a great chart on its website outlining the major differences and similarities between its loan, the Federal Direct Stafford Loan, and the Federal Direct PLUS Loan.

Not surprisingly, Discover’s student loan has a higher APR: 6.15% to 11.99% fixed APR, compared with 4.29% for a Stafford Loan, and 6.84% for the PLUS Loan. Its variable APR ranges from 2.99% to 9.12% APR, though variable loans can be riskier as they can increase depending on market volatility. This makes it a bit harder to budget for your future loan payments.

The Stafford and PLUS Loans both have origination fees and the Discover loan does not.

Discover’s student loan is also available to international students with an eligible cosigner, whereas Federal student loans are not.

Discover offers a unique program that rewards students for good grades. You can receive a one-time cash reward of 1% of your total student loan amount when you maintain a 3.0 GPA (or equivalent).

Similar to the Stafford and PLUS Loans, Discover offers borrowers a 0.25% interest rate discount when you enroll in its automatic payment program.

[How to Tell if Your Loans are Federal or Private.]

Eligibility Requirements for Discover’s Student Loan

Discover lists out its eligibility requirements on its website:

  • You need to be enrolled in a 4 or 5-year undergraduate program at least half-time, and be working toward a degree
  • You can be a US citizen, permanent resident, or international student, though international students need a cosigner who is a US citizen or permanent resident
  • You must be at least 16 years old to apply
  • You need to pass a credit check

If you don’t have an extensive credit history, Discover encourages you to apply with an eligible cosigner. This will increase your chances of being approved for a loan with more favorable terms and rates. A cosigner can either nominate themselves to be a cosigner for you, so you can select them as cosigner during the application process, or he or she can apply as a cosigner with your Cosigner Key.

Be aware there’s no cosigner release with a Discover student loan – the cosigner is on the loan for the entire duration.

The Application Process

Discover says its application takes about 15 minutes to fill out online. Before applying, have the following information ready to enter:

  • Your school’s information
  • Social Security Number
  • Loan amount requested
  • Amount of financial aid you’ve already received
  • If applicable, financial information such as salary and rent/mortgage payments
  • Your address (permanent and where you’ll reside once at school)

Discover makes the application process simple. You can select the state your school is in, and a list of schools in that state will populate. Choose your school from the list or search for it.

You’ll then be asked to enter all your personal information and any other details Discover needs.

If any additional documentation is requested, you can upload it online. By submitting your application, a hard inquiry of your credit will be conducted. The same is true if a cosigner applies with you.

During the application process, Discover will contact your school to verify your eligibility and requested loan amount. This means the loan is certified and ensures you don’t borrow more than you need.

Funds will be disbursed according to your school’s financial aid office deadlines.

The Fine Print

There really isn’t any. There are no prepayment penalties, and no origination, late, or application fees associated with the loan. It’s truly a “zero fee” loan.

A word of warning on choosing a variable interest rate, though – while variable rates are lower and look more attractive, keep in mind the rate can increase at any time. That means your loan will become more expensive.

No one can predict where the market will go, so rates may stay low, or they may skyrocket in the future. A fixed interest rate can provide valuable peace of mind, even if you have to pay for it.

Repayment Assistance Options

Discover has multiple options for you in case you experience financial hardship while paying back your loans. Federal student loans come with certain benefits such as deferment and forbearance, so you don’t need to make monthly payments during a period of financial difficulty. Private lenders aren’t required to offer these benefits, but some lenders do. Keep in mind they’re not guaranteed and can be taken away in the future.

While it may seem like paying your student loans off is years away, it helps to know what your options are as they vary among private lenders. You should take this into consideration when shopping around for private student loans.

Discover offers a range of solutions from deferment, to a grace period extension, to forbearance, to reduced payment. Take a look at what each entails and what it takes to qualify here.

[Do you have Federal loans? Here’s How to St up Income-Driven Repayment Programs.]

Who Benefits the Most from a Discover Student Loan?

Overall, students who have applied for Federal aid and have received the maximum amount they’re qualified for, but still need additional assistance to fund their college tuition, will benefit from Discover’s student loan. Its rates are somewhat comparable to Federal loans as long as you or a cosigner have excellent credit, and it offers great repayment assistance options along with a few bonuses that don’t come with Federal loans.

Consider All Options

While Discover has a decent student loan program to offer borrowers, it’s far from the only option out there. You may be able to get better rates and terms with another private lender. It’s a good idea to shop around to see the different loans you’re eligible for. As long as you apply with different lenders within a 45-day window, the credit bureaus will count all inquiries as a single inquiry. You won’t be penalized for it.

Also, remember to compare APRs and not just interest rates – other lenders may charge late, origination, and application fees that need to be factored into the cost of the loan. Check to see what repayment options are available, and any other “bonuses” lenders may be offering.

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Building Credit, News

Discover Launches New FICO Credit Score Tracking Feature

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The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Screen Shot 2015-07-29 at 12.31.04 PM

Discover credit card customers recently received a pleasant surprise. If you have a Discover card the FICO credit score feature now comes with the ability to track your progress within the last year.

In November of 2013 Discover began to provide the free FICO score to Discover it cardholders on each monthly statement. The financial services company pulls data from TransUnion, one of the three credit bureaus, to determine credit scores.

Originally, Discover provided a FICO score on your monthly statement or you could access the information at anytime by logging into your account and clicking See your FICO Credit Score for Free “View Now”. The previous version showed you the credit score and a few reasons why. For example, someone with a 680 credit score might see “Length of Time Accounts Have Been Established” and someone with a 740 might see “No Missed Payments”.

Now, Discover can help you track your credit score progress (or fall from grace) by providing a graph with a one-year overview. The chart shows the increases or decreases in your credit score plotted on one axis illustrating Very Risky (300 – 579) through Exceptional (800 – 850) and the other providing the month and year.

Screen Shot 2015-07-29 at 12.31.04 PMA quick switch to table view allows you to look back and see the factors impacting your credit score month-to-month.

Discover FICODiscover does provide both the positive and negative factors influencing your score. This information can help you pinpoint where you might have made a mistake or why you’re seeing your score go up 5 – 10 points a month.

What Impacts Your Credit Score

There are five factors influencing your credit score:

  • Payment history (35%): Do you make payments on time? On time payments in the past is the number one indicator someone will continue to behave well.
  • Amounts owed (30%): Utilization is the amount of total available credit you use. Two cards with $5,000 limits means you have $10,000 of available credit. Use less than 20% of your limit a month and you’ll be in good shape.
  • Length of credit history (15%): The longer you’ve had credit, the better
  • New credit (10%): This looks at how many new accounts you have opened, and many times you have applied for credit.
  • Types of credit used (10%): The more types of credit you have, the better. So, someone who has successfully managed a car loan, a mortgage and a credit card would score better than someone who just managed a credit card successfully

[5 credit card myths hurting your wallet and credit score.]

Decoding the FICO Roller Coaster

The graph of my credit score shows exactly what happens when you apply for multiple credit cards all at once.

Back in September of 2014, I had a 787 credit score and two credit cards. One of which I’d had for seven years. Around that time, I decided to perform a little experiment and opened two cards within a month, upping my number of credit cards from two to four.

[Applying for multiple credit cards doesn’t kill your score]

As reflected on the grid, my score dropped nearly 50 points. But I stayed safely nestled in the 700+ range. My score began to rebound and two months later I opened one more card, dropping my score from 750 to 732.

During this time, I changed my length of credit history (15% of my score). How length of credit history is calculated depends on the credit-scoring model, but many take an average of open accounts instead of just using your oldest account. I opened three new accounts (10%) but I didn’t vary the type of credit used (also 10%).

Despite all this, the low score of 732 jumped back up to 752 by the next month and has been steadily increasing for the last five months. By making all my payments on time and in full, I was able to efficiently increase my credit score and I’m now at a 765, which makes me eligible for most of the best deals on the market.

Why You Shouldn’t Panic About Your Credit Score

All too often people panic about a little dip in their credit scores. While credit scores are important, they also shouldn’t be treated as a trophy. Your credit score should be used to get you the best deals on the market.

Discover’s addition of a tracker is helpful, but also shouldn’t be used to stress over a 10 point drop (or even 50 if you recently applied for a few cards). Just behave well with your credit. Make all your payments on time and in full and use 20% or less of your available credit. Diligence and good behavior will get rewarded.

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Get A Pre-Approved Personal Loan

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Won’t impact your credit score

Personal Loans

Discover Personal Loan Review: Decent Rates for Fair Credit and Higher

Advertiser Disclosure

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

personal loan_lg

Discover’s personal loan is everything you would expect from a traditional lender. It offers fixed rates depending on your creditworthiness, is available in all 50 states, and there are several terms to choose from, giving you flexible payment options.

Discover does offer a 30-day money-back guarantee, which is unique. Discover wants to make sure you get the best terms you can, so if you find something better within 30 days of accepting their loan, you can send the money you received back to them, with no interest charged. (Unless the funds went to a creditor, in which case, they can’t be returned.)

This guarantee can help put your mind at ease in case you do find something better, or decide that you can’t handle the payments. If this is something that interests you, read on to get the full scoop on this personal loan.

Discover Personal Loan Rates and Details

Discover LoansDiscover is very upfront with the terms they offer on their website. For starters, you can borrow up to $35,000.

Their rates range from 6.99% – 24.99% APR.

You can pay back your loan in 36, 48, 60, 72, or 84 months, which is much longer than most lenders offer. However, be mindful that a longer term means you’ll be paying more interest over the life of the loan.

In order to qualify, you need to have a credit score of at least 660.

According to the loan estimation calculator on Discover’s site, if you have fair credit, and wanted to borrow $10,000 over 48 months, your APR would be 13.99%, and your minimum payment would be $273/month.

Also, if you ever need to change your payment due date, Discover allows you to make the change within your account online.

Credit Requirements

To apply for a personal loan with Discover, you need to be at least 18 years or older, be a U.S. citizen or permanent resident, have a minimum income of $25,000, and have at least a fair (660) credit score.

Discover states that rates depend on creditworthiness, so this loan is for those who already have established credit. They look at credit history, recent credit activity, and credit inquiries.

If you select that you have “poor” credit on Discover’s loan calculator, you’ll receive a message that you’re ineligible for a loan.

While you need a minimum income of $25,000, you can still apply for a personal loan with Discover if you’re unemployed, but have an annual household income of $25,000. Your credit report has to show that you have shared financial obligations within the household.

How Do Discover Personal Loans Compare With the Competition?

Discover makes it a point to feature a comparison chart on their homepage, listing out the reasons their loans are superior to Wells Fargo, Citi, LendingClub*, and Prosper.

Overall, Discover does come out on top in many of the categories, especially when compared to Wells Fargo and Citibank. Discover’s APR range is more favorable when compared to these two, and while LendingClub and Prosper have slightly lower starting rates.

Additionally, Discover’s personal loan doesn’t come with an origination fee, whereas LendingClub and Prosper have origination fees up to 6% of the loan amount.

The Fine Print – Are There Fees?

Discover does not have any hidden fees – there are no closing fees, prepayment penalties, or origination fees associated with their personal loan.

However, their late fee is a whopping $39, which is quite high compared to other personal loan lenders. You can enroll in their automatic payment service to avoid making late payments.

Discover Personal Loan Application Process

The application process for Discover’s personal loan is a little more in-depth than others.

You can apply online or over the phone, and you’ll be asked what amount you need to borrow, and what length of term you’d like. This is where the loan calculator comes in – be sure to choose an option you can afford!

Discover requires your salary and employment information, and they will verify both. You may have to submit pay stubs or bank statements, and Discover may contact your employer. You can upload documents directly to Discover during the application process.

If you’re looking to pay off debt, you’ll need the balances and account numbers of your creditors.

Once you’re done filling out the application, a loan specialist may call you to verify any details. Otherwise, Discover claims that you will receive a decision the same day you apply, and funds can be disbursed within 3 days of accepting the offer.

Who Would Benefit from a Discover Personal Loan?

Individuals that already have an established, positive credit history and need money quickly will benefit from a Discover personal loan.

Because Discover offers to pay off creditors directly, its loan is a great option for those looking to consolidate debt. Discover has a debt consolidation calculator to help you determine whether or not it you’d save money by going that route.

What to Use the Funds For

With a Discover personal loan, you can borrow anywhere from $2,500 to $25,000, which is a large range.

On the website, popular reasons people borrow from Discover include:

  • Debt consolidation
  • Wedding/Honeymoon
  • Vacation
  • Home improvement
  • Major purchases

The most popular option seems to be debt consolidation, because Discover offers decent terms for those with great credit. Having a fixed interest rate of 8.99% might make a huge difference for you as opposed to balancing four different credit card loans with varying interest rates.

Discover also cites home improvement, specifically “green upgrades”, as a reason why people borrow funds. This could be a good idea if you plan on staying in your current home for a while, and will recoup the costs through money saved on utilities.

So, Should You Take a Discover Personal Loan?

For a traditional lender, Discover’s personal loan offering isn’t bad. It beats out Wells Fargo and Citibank, and still looks more favorable than LendingClub and Prosper, both peer-to-peer lenders.

Due to the credit requirements, this loan isn’t a good fit for recent graduates or those who have poor credit. If you don’t think your credit is good enough, try the other alternative personal loan lenders that we’ve reviewed.

Keep in mind that Discover will do a hard credit inquiry when you apply for a personal loan with them. Even though it offers a 30-day money-back guarantee, you should shop around with multiple lenders before accepting an offer. Don’t worry that it will further impact your credit score – as long as you’re shopping around within a 45 day window, the credit bureaus will look at multiple inquiries that close together as one inquiry. Look out for yourself and get the best terms you can.

*We receive a referral fee if you click on offers with this symbol. This does not impact our rankings or recommendations. You can learn more about how our site is financed here.  

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Balance Transfer

How to do a Balance Transfer with Discover

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The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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So, you have been approved for a balance transfer. Congratulations – there is no better way to save money and get out of debt faster. Just make sure you complete the transfer as soon as you receive your card in the mail and never more than 60 days after you apply, because you can lose the introductory offer.

Haven’t applied for a balance transfer with Discover yet? You can get 0% intro balance transfer APR for 18 months with a 3% fee. 

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Completing a balance transfer is easy. You can do it on the phone or online, and it should only take a few minutes.

What You Need

You will need the account number and balance of the credit card that has the debt.  These cards will be referred to as the “transfer from” account. If you have a $3,000 balance at Chase, and you want to transfer it to your new Discover account, then you will need the account number and balance of the Chase account.  And, in this example:

  • The transfer from account is Chase.
  • The transfer to account is Discover.

Once you have that information, you are ready to go.

Call

You can call the customer service number on the back of your credit card, and they will be more than happy to help you complete the balance transfer. The phone representative will go through security checks and then ask for the credit card number and amount of debt that you want to transfer. Call center employees often receive a bonus to complete a balance transfer, so you will usually find a very eager person on the other side of the telephone line.

The bank makes the payment to your credit card for you.  If you are close to your due date, I recommend making the minimum payment to your card to ensure that you do not have any late fees. The payment (in this example, from Discover to Chase), can take up to 3 weeks. It is usually faster, but you should not take any chances and want to avoid being hit with a late fee.

Online

Most banks make it easy to complete a balance transfer online. Once you receive your credit card, you will need to sign up for online banking. Below, we will show you how to complete an online balance transfer with Discover. Click on these names if you’re looking for a step-by-step guide for: Chase, Capital One or Barclaycard.

  1. Login to your account. Under the “Credit Options” tab, you’ll see the option to complete a balance transfer. Click on “See offer”.

 

Discover

 

2. Select an offer. You’ll see the introductory offer listed. In this case, it’s 0% for 12 months with a 3% fee.

 

Discover

 

3. Input the following:

  • The account number of the credit card(s) that has your debt right now.  This is the account number of the transfer from account.
  • The amount(s) that you want to transfer

 

Discover

 

You can only transfer the credit limit given on your new card. So, if your Discover card has a $5,000 limit and you have $8,000 of credit card debt you want to transfer, you can only move $5,000 over to Discover.

4.  You will then be shown the terms and conditions of the balance transfer offer, which you will need to accept.

Here are the most important items:

  • Make sure the terms of the balance transfer match the terms of the offer when you applied. If you are expecting a 3% fee and a 0% interest rate for 12 months, make sure that is what you see. If there are any issues, call the bank directly (you can reach Discover at 1-866-240-7940).
  • Never spend on the card. As we have highlighted below, the bank makes it clear that any new spending will result in interest being charged.
  • Make sure you pay on time.  If you go 60 days late, you will lose your balance transfer offer

5.  You will then receive your confirmation. Discover will pay your existing credit card bill to roll it over to their bank.  But, it can take up to 3 weeks.  So, we recommend that you make the minimum payment if your bill is due in the next 3 weeks.

Once you see the confirmation screen, then you are in good shape.

Remember:

  1. Don’t spend on the card where you completed a balance transfer.  Interest will accrue on your purchases immediately.
  2. Make sure you pay on time.  Paying late (60 days) can lead to a loss of your 0% interest rate and it would go to the penalty rate (typically close to 30%).
  3. Have a plan for the end of the balance transfer period. You don’t want to be paying high interest rates.

Still have questions? Email us at info@magnifymoney.com or tweet us @Magnify_Money

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