Discover Card Reduces Cashback Bonus Program

Discover is reducing the number of tiers that apply to calculate the Cashback Bonus. They are also making changes to the redemption requirements of the Cashback Bonus and Miles Program terms and conditions. I have paraphrased most of the statements below from Discover’s website.

For the Discover® More® Card, the Discover Open Road® Card and the Discover MotivaSM Card the following changes will be effective for billing periods that end after June 1, 2009.  You will receive 0.25% cashback if the purchases are part of the first $3,000 in total purchases during the anniversary year. You will receive 1.00% if the if the purchases are part of the total purchases in excess of $3,000 during the anniversary year. Purchase made at select warehouse clubs, discount stores, and their affiliates earn 0.25%. There’s no way I charge an additional $3000 this year on my Discover Card just to rack up my usual 1% in rewards. I could if I make my business inventory purchases using this card, but then my corporation would not be separate from my personal accounts and jeopardizing my corporate status. Not worth it.

For the Discover More Card, you will still earn 5% Cashback Bonus on your qualifying Program Purchases. For the Discover Open Road Card, you will still earn 5% Cashback Bonus on your qualifying Gas and Auto Maintenance Purchases. I will still use this card to make gas purchases at ExxonMobil, so I can get double rewards from Upromise.

If you elect to redeem your Cashback Bonus for:

• a gift card or instant eCertificate from our Partners or for a charitable donation to select charities, you may continue to redeem your Cashback Bonus starting at $20, but will no longer be required to redeem your
Cashback Bonus in $20 increments thereafter.
• a credit to your Discover Card Account or an electronic deposit into an account you designate, you may now only redeem your Cashback Bonus in increments of $50 ($50, $100, $150, etc). I guess I’ll redeem the bonus 3 times a year instead of 8.

Have you had similar reductions with your rewards cards? Will the rewards card survive the economic downturn? Will they reverse the change when the economy comes back? Probably at the same slow rate that gas prices came down after skyrocketing up.