How the Discover Motiva Card Pays You to Stay in Debt

In a perfect world, we would have credit cards only to earn us rewards and the full balance would be remitted at the end of each month to avoid any of those pesky interest charges. In reality however, debt is something that every American deals with. Of course, according to Discover, you can apply for their Motiva card and they’ll pay you to stay in debt!

Credit card companies have been devising new ways to encourage debt among their customers for years, but this is the most ingenious ploy I’ve seen yet. WhileDiscover doesn’t actively advertise its decision to encourage debt, the facts can be found in the fine print.

When you use the Discover Motiva card, you are rewarded for paying your bill on time. If you remit your minimum monthly payment on time for six consecutive months, you receive one month’s interest back as a reward. This sounds like a fairly generous offer, but you have to read between the lines.

The amount of the interest you receive back for your Pay-On-Time reward is calculated based on your monthly finance charges. If you pay your bill on time each month and in full—and thus incur no interest on your purchases—you don’t get any interest back and the reward is null in your case. This tells consumers that if they choose to carry debt, they will be rewarded with money back.

This is not to say that Discover has concocted a nefarious scheme to ruin your credit rating and put you on the streets, but it does bear contemplation. If the Discover Motiva card pays you to stay in debt, is the reward really beneficial at all. Obviously, if you intend to carry a balance on a credit card, this offer is ideal; if, however, you prefer to pay off your balances each month, this could get you into unforeseen trouble.

Let this be a lesson to consumers: Before you jump at what looks like a great deal on a credit card, make sure to read the fine print. Look at the grace periods, the interest rates and the terms and conditions for reward programs.

For example, the interest rate you’ll be paying on the Discover Motiva card is between 11.99% and 20.99% (Variable)*, which can really increase your debt if you choose to carry a large balance. Even if you get one month’s interest back every six months, you’ll still be losing money on a regular basis in finance charges.

Furthermore, some credit cards are great for certain people but detrimental for others. If you know your spending habits and your current debt situation, you will be better prepared to make a decision about new credit cards when you decide to apply. If, for instance, you know that you will be tempted to carry a large balance from month to month, the Discover Motiva card might prove to be too much of a temptation.

If, however, you are comfortable with carrying a small balance and paying it off quickly, this card can help you manage your debt efficiently.

The great thing about the Discover Motiva card is that it carries a 0% APR as an introductory rate before it increases. Furthermore, it encourages consumers to pay their bills on time in order to get the reward, so if you find yourself lagging in paying your bills, this could be a great card to teach you better discipline.

If you do decide to apply for the Discover Motiva card, here are a few tips for using it widely:

  1. Take advantage of the introductory 0% APR on balance transfers and get rid of the balances on your credit cards with higher rates.
  2. Carry low balances from month to month so that you don’t have to worry about high interest rates. Five months of interest compared to one month of no interest is a no-brainer.
  3. Pay your credit card down with your Pay-On-Time rewards. As soon as that money comes in, apply it to your balance to pay down your credit card debt.