I have an account with one credit (first in list) and three invoices.  When I try to mark for payment, I get a message on the credit that "The discount taken cannot be greater than the amount of the invoice."  Since the credit is a negative amount, the discount of zero is of course greater than the invoice (credit) amount.  I can't get past this message to make entries.

Have you tried letting the system automatically use all credits and then pay all invoices? I don't recall that exact message, but I know that sometimes when dealing with credits it doesn't work the way you expect it to.  
 
If you let the system do everything, you can then go change something if you want to.

Just did a test.
 
If allowing system to select all credits and pay all invoices it worked fine and I got no messages.
 
If I manually picked the credit first, it warned me, but let me continue.