Goodbye Discover, hello American Express

Since 1994 my Discover Card has been my main credit card. It has a cash rebate feature, basically 1% on purchases over a certain amount per year--$6,000, if I remember correctly, with lesser percentages on lower amounts. Since I use it for almost everything I can, my monthly bills (which I always pay in full), are always four figures--occasionally even the upper four figures. They also have a "Get More" program, which gives a 5% rebate for some purchases. And finally, if you use the rebate to purchase gift cards from certain merchants, you can get up to double the amount.

But recently I discovered (ha ha) that the American Express Blue Cash card has a better rebate program: 1.5% above $6,500 in annual purchases. They also have 5% rebates, though no gift card program. Still, at my level of credit card usage, I should do better with the Amex card.

The Discover 5% rebates are limited: only at certain merchants, up to certain amounts, during certain times of the year, and they make you sign up for it each time--the whole thing is too much to keep track of. Amex gives 5% for all supermarket, gas station and drug store purchases, all the time, no limits, no signups, once you pass the $6,500 mark.

Discover's gift card program is not terribly useful. The number of merchants that offer double have dwindled to a handful of places I don't particularly want to shop at (it was great when Borders offered double). Most now just give a 25% bonus, so it's like getting a 1.25% rebate. And it's also just a hassle--you have to order them, and remember to take them to the store. It can be a pocketful, as most only come in $25 denominations.

There are a couple other reasons why I want to switch to Amex. The Discover card still isn't accepted at as many places as American Express. So my rebates will be higher for that reason alone. Finally, I am sick and tired of the huge number of calls I get from the Discover fraud prevention department. I have gotten so many messages from them on my answering machine that I have their number on my speed dial. If they were calling about unusual activity on my card, or about large purchases, I would understand it. In fact, I would welcome it--who wants their account to be used fraudulently? But that's seldom what prompts these calls. Most of them are about small, normal purchases at places I use the card all the time. Apparently the algorithm for generating these calls is largely based on the frequency of use. The more you use the card, the more calls you get. I wonder what the Discover marketing department would have to say about that.

So it's goodbye Discover, hello Blue Cash. Coincidentally, I am switching my brokerage accounts from Morgan Stanley to Merrill Lynch, because my stock broker is switching. Morgan Stanley owns the Discover Card. They're losing me as a customer twice.