What?? If you are correct, then why we have credit line?

Surprise!!
They are following their rules. It says that you don't get cash back for certain purchases, including gift cards.
What they see is someone abusing their card for cash back that they (Discover) shouldn't;t pay and you don't deserve.
So, congratulations on getting 3 years equivalent of cash back before they closed you down.
But don't be shocked that they did so.
As I said, you are not their customer of choice.

A credit line is the amount you can owe on a card at a particular time. If you have a $1000 CL and you charge $250, you can still charge $750 more--and if you pay the $250 you owe, you can then charge $1000 more. It's a LINE OF CREDIT--it's not a limit to how much you can spend per month.

There's a contract between the cardholder and the card issuer. Notions of "abusing" a card, where that definition is determined randomly, is neither legal nor fair. We're obligated to abide by the contract terms but so is the bank. If there's something called "abuse" make it part of the terms and specify what it is.

And, BTW, what's "abuse" generally means that the CC company doesn't like how many rewards you earn--despite the fact that it advertises "unlimited" rewards. The way to avoid that kind of "abuse" is to limit rewards. Otherwise, the CC company is guilty of fraud IMHO.

Interesting. I sincerely wish you the good luck to cycle 5x or more of the CL. ;)

A lot of the shut-downs are caused by CL cycling. If you cycle a Citi DC or Fidelity Visa with $20,000 CL 5 times a month, I'm sure Citi and Elan will shut you down in no time. That is a $2,000 loss for each card.

Same with BA Premium Rewards and other high rewards cards without any reward limits....

Are you sure it is really a $2000 loss?

Yeah - I don't understand at all where the $2,000 comes from here. And is it a loss to you or the bank?

And you know the cause is CL cycling how, exactly? Do you think that if you used a non-rewards card with the same CL cycling you'd be closed down? Banks love to see extensive card use--as long as that use is profitable to the banks.

deleted

Personal, mix of all MS places, online, mall, grocery

Thanks for the info. Any particular transaction they claimed was suspicious? I'm curious if it's just something you did that was unlucky, or they're starting to clamp down on MS in general.

$20,000 CL x 5 = $100,000 spending. 2% of $100,000 = $2,000 cashback.

Also, for BA Premium Rewards, the top tier earn 2.625% cash back. I'm sure no swipe fees can cover that cost if you cycle it 5 times.

I agree, I read through all the terms again and only mentioned point are Cash advances. Well then again banks will be banks,

That assumes the cash back is a "Loss". But they do get money from swipe fees. I don't know exactly how much, but I'm sure it is enough that they aren't losing the entire $2000. Just googling it I see that swipe fees average around 2%, but are higher for premium credit cards.