Don't be fooled by Discover's 'Cash Over' benefit

Just when you thought credit card companies couldn't go any lower with deceptive marketing tactics, Discover recently sent out a whopper of a mailer to cardholders. The new mailing focused on the many benefits that cardmembers receive from Discover, including the ability to get Cash Over at select retailers, including Wal-Mart at your current card rate without any extra fees.

Discover claims that Cash Over is a great way to avoid ATM transaction fees and combine two trips without any surprises. But for most credit card users, this is almost as bad as using your credit card for a cash advance.
For example, if you tack on $100 in cash to your grocery purchase, you avoid any upfront fees, but if you aren't paying off your credit card bill every month that Cash Over transaction will cost you an additional $7 if you paid the minimum (at 12% interest). Assuming you have more debt than that on your credit card and you could be paying interest on your "Cash Over" for quite some time!

If you had used your debit card to purchase groceries at the same store you could still get $100 extra and you still avoid any fees, the only difference is now you won't be paying for that $100 for the next year.

Does getting Cash Over beat going to a payday lender? Yes, but a bullet to the arm beats one to your chest too. The fact that someone at Discover decided to pitch this as anything other than an emergency means to get cash is further proof that the only one benefiting from these supposed benefits is Discover Bank.

Don't forget that behind every marketing material your credit card company sends you is a corporation seeking to profit, so look at all those "benefits" carefully.

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Clinton Weir

I am more than a little surprised by this "article".

If you have the money to withdraw from your debit card account (checking account, presumably) then, sure, you could take an extra trip to visit your ATM. Or you could withdraw that same money using the Discover Cash Over feature, save yourself the trip, and use the money in your checking account to pay the balance at the end of the month.

It only becomes a problem if you charge it to your card and then fail to pay it off at the end of the month.

March 08 2014 at 6:25 PM Report abuse rate up rate down Reply
goku5291

Guy who wrote this is a moron, using cash over irresponsibly is no different than just using your card irresponsibly...the people who max it out doing this are the same ones who would max it out buying a $2000 TV when they make $12000 a year anyway. At least this way people aren't forced to get a cash advance if there's something they can't pay with discover for and don't get paid for a couple days.

October 03 2012 at 12:07 PM Report abuse rate up rate down Reply
goku5291

Guy who wrote this is a moron, using cash over irresponsibly is no different than just using your card irresponsibly...the people who max it out doing this are the same ones who would max it out buying a $2000 TV when they make $12000 a year anyway. At least this way people aren't forced to get a cash advance if there's something they can't pay with discover for and don't get paid for a couple days.

October 03 2012 at 12:07 PM Report abuse rate up rate down Reply
gper

They don't try to trick anyone...they tell you the cash is given to you at your regular purchase APR. I think it is a great member benefit because it saves a trip to the ATM and you don't ever have to pay interest on the money if you pay your bill in full. It isn't hard to pay your credit card bill in full each month. If you can't manage your credit cards and money then you shouldn't be borrowing in the first place.

May 07 2012 at 3:07 AM Report abuse rate up rate down Reply