Discover Business Cards To Exit Affiliate-Marketing Channel In The New Year

Let me know when you're sick of these stories (because there doesn't seem to be an end in sight). Previously, I wrote that Chase, Citibank (to some extent), and HSBC had left the affiliate-marketing channel. You can now add Discover's business cards to the group. Discover, as a result of the economic climate, has decided that it will withdraw from the affiliate-marketing channel -- at least temporarily. The move will take effect on January 1, 2009.

In light of the "current economic downturn," writes Discover, "Discover Business Card has taken a look at credit risk and has made a decision to pause online acquisitions of its business products." The company said that its Business Card, Business Miles Card, and Business Card with Cash Back Bonus are all impacted.

Based on a letter sent to affiliates, Discover is reevaluating its performance and credit-risk model. In other words, it's going to tweak its model so that it better reflects the risk that currently exists in the marketplace. "At the turn of the year, the intention is to evaluate performance and the credit risk model so that the cards can once again be offered to online prospects in 2009," Discover says.

Given how brutal this economy is, I am not surprised that Discover has decided to tinker with its marketing strategy. You'll recall that Discover recently changed its underwriting criteria for business cards. At the time, I wrote that the new underwriting requirements would result in more denials for applicants (link here).

I'm also curious about the quality of the applicants that are applying through the affiliate channel. In November, before withdrawing from the affiliate-marketing channel, Chase said that it was concerned about consumers who were applying for "instant approval-decision" cards. "We have found that these categories do not generate quality applicants for Chase," the company wrote at the time. As a result, Chase had affiliates pull all such cards from the marketplace.

I'm wondering if Discover is running into the same kind of trouble. Perhaps, during this credit crisis, Discover is just being deluged with a rash of low-quality applicants -- so much so that it has decided it would be better to simply leave the channel until the "all clear" signal has sounded. It's difficult to know, of course, but I think it's possible.

Finally, Discover says its consumer and student cards will continue to be offered through the affiliate-marketing channel.

Related Articles:

Chase Will No Longer Offer Business Credit Cards Online -- Goes To "Invitation Only" Model

New Underwriting Criteria At Discover Will Lead To Fewer Business Card Approvals

HSBC Joins The Party: To Exit The Affiliate Marketing Channel

Citibank Pulling A Large Number Of Its Credit Cards Out Of The Affiliate Marketing Channel

Chase Pulls Out of Affiliate Marketing Channel -- Just How Bad Is This Credit Market?