Earlier this year, Discover ceased offering most of its products and unveiled their new “it” card. The “it” card features 1% cash back on all purchases, and 5% back on purchases from selected categories of merchants that change each quarter.
But in addition, “it” also features 0% APR promotional financing on both new purchases and balance transfers. In fact, prospective cardholders can apply for either of two versions that are identical except for the terms of the interest free financing.
Offer #1: 14 months of interest free financing on both new purchases and balance transfers
This offer features 14 month promotional financing periods for both new purchases and balance transfers. This version will be ideal for cardholders who can reasonably expect to pay off their credit card debt in about a year, and want to enjoy interest free financing on new purchases during that time.
Offer #2: 18 months of interest free financing on balance transfers, but only six months on new purchases
This version of “it” is kind of a wild card. This appears to be designed for applicants who want to take advantage of the full 18 months in order to pay off their credit card balance that they transferred. But at the same time, cardholders will run out of interest free financing on new purchases a year before their terms for the balance transfer expire.
But in addition, those who accept this offer should be advised that after six months, Discover will apply the minimum payment to the balance transferred, not any balance created from new purchases. Due to a loophole in the CARD Act, only payments above the minimum must be applied to the highest APR balance.
Therefore, this card makes the most sense for people who do not need it to make new purchases, or those who have the financial flexibility to pay both the minimum payment and cover the cost of any new purchases made after six months.
What both cards offer
Despite their differences, these cards are mostly the same. They both have no annual fee, no foreign transaction fee, and the same rewards program. In addition, cardholders will have their first late payment waived automatically. And finally, Discover preserves their strong reputation for customers service by boasting of “100% U.S. based customer service available any time.”
By understanding the differences between these two offers, applicants can chose the one that best meets their needs.