Credit Card Debt Management

Now that’s what I’m talking about! A credit card that actually gives you money back! Make six on-time monthly payments in a row to the new Discover Motiva credit card and they’ll pay you the next month’s interest amount in the form of a cashback reward known as the Pay-On-Time Bonus.

Pretty sweet deal, right? So the people who pay on time will finally receive more cash rewards than the sloppy payers of the world. Motiva cardholders can also receive cashback bonuses through 80 partnering businesses like Chili’s restaurant, Gap and Kohl’s clothing stores and Bed, Bath and Beyond home decor store. Rewards are doubled when the card is used to purchase e-certificates or gift cards at those stores.

But wait - that’s not all! Balance transfers are only 3.9 percent APR through January 2010 and new purchases are 3.9 percent APR through March 2008, with the rates increasing to 13.99 percent thereafter.

This card is pretty enticing. As loyal blog readers know, I have been seeking a good balance transfer offer lately. No annual fees, 3-percent balance transfer fee … the interest rate could be lower (like, zero) but it lasts until January 2010. Plus, I pay on time and like the idea of getting rewarded for that.

But then I check the fine print, and in creeps that nasty little Universal Default Policy. Sure, it’s couched with vague lingo like “default rate” and “general credit history,” but it essentially means that if they learn you missed a payment with another company, like the electric company, they will penalize you with a higher interest rate.
Capitol One has reportedly done away with the policy, which has recently come under fire from congress. Discover Motiva still has the policy - and for that reason, on principle alone, I’ve lost all motivation to look into it.