Have you ever had a credit card that rewarded you for a job well done? There are a few such rewards cards out there that give you extra benefits for good behavior, such as the Citi Forward credit card and several college student credit cards. These cards typically give you money back or extra points as rewards. But there are also regular credit cards that function in this vein, even if they don’t exactly fall in the rewards card category. When it comes to using cards, it’s really all about carrots and sticks. If you’re a responsible cardholder, you get some breaks and perks, but if you mismanage your credit, you end up with penalties, fees and higher rates.
Discover Motiva Review: Extra Rewards & Pay On Time Bonus
Let’s take a look at one regular credit card from Discover: The Discover Motiva has a combined set of features that make it attractive. Here’s a rundown of what you can expect from this card:
- The “Pay On Time” cashback reward comes in the form of a bonus that you’ll receive each month, provided that you pay at least the minimum on your balance. Pay your bill on time and without hitches in a given month and you’ll be rewarded with 5% of your interest for that month as cashback. If you make regular monthly charges such as for memberships, utilities, or even groceries, getting that 5% of interest back can be a great benefit. This incentive makes this card unique and could be the reason behind the “Motiva” name.
- Receive up to 20% cash back when you buy through ShopDiscover, Discover’s online shopping site.
- For all other purchases you make, you’ll earn up to 1% cash back automatically with the Cashback Bonus Program.
- You’ll earn 1% once you’ve made more than $3,000 in purchases. Before you hit the $3,000, you’ll earn cash back at a rate of .25%.
- Be aware that warehouse purchases don’t count towards the $3,000, though they do earn you .25% cash back.
- These cashback rewards are unlimited.
- You don’t have an annual fee with Discover Motiva.
As with other Discover cards, there are multiple ways to get cash back. For instance, another way to get more cash back is to redeem for gift cards, which are available from a host of Discover’s partners. These partners include restaurants, department stores, travel providers, and other merchants, so you’ll have a lot of choices.
You can also redeem for merchandise, select a Discover gift card, send your cash back to charity, or simply have the cash back deposited to your bank. You can even opt for a credit to your Discover Motiva account, if you prefer. As mentioned, the Cashback Bonus Program doesn’t impose limits on how much you can earn. To keep tabs on your cash back, check out your statement or visit your account online.
Discover Motiva’s Intro APR & Fees
Beyond the interesting way that this card rewards its customers, it also has a highly favorable balance transfer and purchase introductory rate. This APR is enticingly low and compares well against other 0% intro APR credit cards. Check the terms:
- The introductory APR was just lowered to 0% for both balance transfers and purchases, and extends for 15 months.
- After the promotional period ends, the rates for purchases and balance transfers rise to a range of 10.99% to 20.99% (variable). Your rates will be set after your credit history and other factors are reviewed.
If you need balance transfers, you’ll encounter some transaction fees. When you request a balance transfer with your Discover Motiva application, you’ll pay 3% of the transaction amount. The BT fee is set at 3% for now (for transfers posted by June 10, 2012. Transfers made after this date can cost either $10 or 5% of the transaction amount, whichever is higher. As for additional fees, there’s a cash advance fee that’s the greater of either 5% of the transaction amount or $10.
Pay On Time Rewards Calculation Example
Given all these terms, you may be interested to see just how much you’d save with Motiva for keeping with a regular payment schedule. Let’s go through an illustration to provide some perspective.
Suppose you have a $10,000 balance and your regular APR is 18%. Then your monthly interest payment is slated at $150. If you pay your minimum on time, you’ll get back $7.50 for that month as the “Pay On Time Bonus”. Note that the interest amount will diminish over time as you pay down your debt (and so will the cashback that’s tied to it), unless you maintain this balance or add on to it. The total interest amount you pay through the life of your loan will dictate the total cashback received. So a total of $4,000 in interest will get you back $200, while interest of $14,000 will shave off $700 from the interest total, provided that Discover keeps these conditions until you completely retire your card debt.
You may have also noticed that “Pay On Time” doesn’t exactly apply to those who take advantage of the generous 0% intro APR balance transfer offer, since with no interest paid, there’s no cashback reward to expect.
Note: Compared to traditional rewards cards such as the Discover More, the cash back here is typically smaller (and tied to your debt balance), so if you’d like to maximize rewards and you keep a low balance, then a regular rewards card should be a better choice for you.
What About Additional Benefits?
Like other Discover credit cards, you can benefit from several consumer protection features. If you find an instance of a charge you didn’t make on your account, then you’ll be covered by the $0 Fraud Liability guarantee. Another feature warns you if fraud is suspected on your account. When you’re ready to shop online, you can get the added protection of Secure Online Account Numbers. This should shield your regular account number from potential theft or misuse.
To help you stay on top of your due date and balance, you can take advantage of email reminders to pay your bill. Plus, you have the option of selecting your own due date. Discover’s mobile apps for iPhone, Android, and BlackBerry can help you manage your account, too.
If you’re the sort of cardholder who likes to use automatic payments or you’re vigilant about paying your bill on your own, you might as well get a bonus for your efforts. Discover Motiva’s unique offer of interest back, cash back rewards and low introductory APRs can appeal to a lot of users.
Created September 7, 2010. Updated December 13, 2011. Copyright © 2011 The Digerati Life. All Rights Reserved.