About a month ago, I applied for a bunch of cards. One of the cards was the highly touted Discover Miles card that gives you 1.5% cashback on purchases and at the end of the year, they will give you another 1.5%, effectively giving you a 3% return on spend. I wanted to get this card to buy AMEX gift cards through a portal that pays out 2.25%, thus grossing me 5.25% cashback on every dollar. In my head, this was a no-brainer. Well, when I got the card in, my credit line was a paltry $3,000, with a cash advance line of $300. CRAP! I had forgotten that Discover usually only gives a $6K-8K credit line on new cards. Then their cash advance line is usually 10% of the credit line. What that means is that you’ll get the card with a $8,000 credit line and a $800 cash advance line. The problem here is that American Express gift cards hit the cash advance line FIRST before moving to a purchase. That means, you’ll need a cash advance line of at least $1,000 (more likely $2,000 so you can buy $2K denomination AGCs to save on fees). To get a cash advance line that high, you’ll need a credit line of $10K-$20K.
Moving credit lines
About 5 years ago, Discover ran a promotion where they were giving out a 0% balance transfer APR and no balance transfer fee FOR LIFE if you made something like 1-2 purchases a month on the card. This was great but once again, they would only give out a $6K-$8K credit line, which really isn’t much. I called them up and was told that I could apply for a new Discover card and merge the credit lines. This was great because I applied and merged 3 cards and had a credit line of around ~$20K. I then did a balance transfer to my Citi card for $20K. I then called Citi and had them mail me a check for the overpayment to my credit card. I then sent myself 2 $.05 payments using Paypal every month. Eventually, Discover was generous enough to remove the 2 purchase requirement. So for the past 5 years, I’ve made the minimum payment and a $.50 minimum finance charge on a $20,000 “loan.” Thanks Discover!
Fast forward to today, I still have that Discover card with somewhere around $4,000 left on the balance, but they’ve increased that credit line to about $26K and a cash advance line of $8K. I called up Discover to see if I could pay off the $4K on the card and merge the credit lines to my Miles card. I spoke to retention since they usually have more power, and the lady said she had worked there for 14 years and told me they have never been able to do that. I told her to check my account history, and after 10 minutes on hold with her supervisor, she came back on and did say I merged the accounts 5 years ago, but they were no longer doing that. I didn’t bother to ask for the supervisor since the supervisor was already involved in checking my account history. So I’ve hit a dead end.
Asking for a CL increase
Well the good news is that the retentions CSR did tell me I could call back in 3 months to ask for a credit limit increase. While I do plan on doing that, I don’t think they will give me the $20K credit line that I want. It’s hard for them to move me from $3K to $20K, especially since I have $26K on my old Discover card. I may need to talk to a supervisor to see if decreasing the credit limit on my old card NOW will help me in getting a higher CL for my new card in 3 months. This will also shorten my manufacturered spend timeline from 12 months to 9 months on this card.
What to do with the card
The problem with actually using the card is that I can get a better return by using an AGC for a purchase. If I use my SPG card to buy an AGC with a 2.25% portal, and I value an SPG point at 2%, then I can use the AGC anywhere that takes AMEX for an effective cashback of 4.25% versus just 3% on the Discover. So far, the only time I’ve used the Discover was when the store did not take AMEX but took Discover. However, if you do not play the American Express gift card game, and want the highest cashback card, then I do recommend you get this card.
Yeah, I got hit with the same issue with Discover giving me a paltry cash advance limit, and it then failing for Amex GC purchases. :/
Any chance of getting Discover to increase the cash advance limit without increasing the total credit line?
No, the CA is a % of your total CL, so can’t really do anything.
Yeah, I’m not sure how to play this either. I asked the Discover retentions rep if I should first reduce my existing card’s CL to help improve my chances of getting a much higher CL on the new Miles card, or if I should just keep existing the same and increasing just the Miles. The rep had no idea. I even asked her to ask her supervisor who also didn’t know. My gut tells me that I should reduce my other Discover first, but I am afraid that they may give me another ‘3% on all cb offers for X months’ again and then I’d be screwed if both had weak CL’s. I’m probably going to reduce the existing one to $10K (so I can at least buy 1K AGC) and hope Miles card can be approved for $20K (to clear 2K AGC). This may backfire and I may wind up with $10K on both cards and be stuck with $1K AGC cards. ARGH! DAMN YOU DISCOVER!