Discover Motiva Credit Card Gives Rewards For On-Time Credit Card Payments
Author: profiteer
Posted: Tue Mar 13, 2007 7:55 am
Post subject: Discover touts card that rewards monthly payments
What will they think of next a reward for on-time payments.
Reuters:
Discover Financial Services, the credit card giant to be spun off by Morgan Stanley this summer, on Tuesday launched a card that rewards borrowers who make their payments every month, though some critics warn the program may only encourage people to pile on debt.
Discover says its "Motiva" card will pay back to cardholders one month's interest after they make at least the minimum payment for six straight months. The money can be used as a credit to further pay down the balance, deposited to a bank account or redeemed as cash.
In a market crowded with air-miles that reward big spenders, Discover says Motiva is the first card targeted to people who have a balance and who want to stay on top of their debts.
"We encourage our customers to pay off their balance every month. Today, other reward cards only focus on spending," said Margo Georgiadis, Discover's head of marketing. "There's a significant, untapped need in the marketplace."
Someone who carries a balance of $3,000, and doesn't make additional purchases, would make minimum payments of about $60 a month. After the sixth payment, the customer would receive one month's interest, about $32, as a "pay-on-time bonus."
The card charges interest at an annual percentage rate of 13.99 percent, a spokeswoman said.
Discover, which struggled with bad loans about five years ago, more recently has been trying to boost loan growth by offering new cards and signing up new merchants. The unit's recent progress encouraged investment bank Morgan Stanley to announce plans to split the 21-year old issuer into an independent company.
The new program also comes as a time when the credit card industry, which relies on fees to boost profits, is under intense scrutiny from Congress and regulators who worry banks are abusing customers with excessive penalties and offering cards to customers who can't keep up with their spending.
Some consumer groups noted that the Motiva program might indirectly encourage borrowing, since the monthly interest "bonus" grows with the size of the balance.
"I would fear it will encourage consumers to carry larger balances," said Stephen Brobeck, executive director of Consumer Federation of America.
Author: angelo21
Posted: Tue Mar 13, 2007 8:32 am
Post subject:
Nice marketing gimmick but I’d rather PIF.
Author: Special K
Posted: Tue Mar 13, 2007 8:59 pm
Post subject:
Wow, a card that rewards someone for carrying a balance by rebating a month's worth of interest every six months as long as at least the minimum is paid when due . This quite possibly may be the worst idea for a rewards program I have heard of(at least for me). So if I PIF each month and have no minimum due all this becomes is a card that gives me up to 1% cashback on purchases. Think I'll pass, unless I'm missing something here.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Posted: Tue Mar 13, 2007 7:55 am
Post subject: Discover touts card that rewards monthly payments
What will they think of next a reward for on-time payments.
Reuters:
Discover Financial Services, the credit card giant to be spun off by Morgan Stanley this summer, on Tuesday launched a card that rewards borrowers who make their payments every month, though some critics warn the program may only encourage people to pile on debt.
Discover says its "Motiva" card will pay back to cardholders one month's interest after they make at least the minimum payment for six straight months. The money can be used as a credit to further pay down the balance, deposited to a bank account or redeemed as cash.
In a market crowded with air-miles that reward big spenders, Discover says Motiva is the first card targeted to people who have a balance and who want to stay on top of their debts.
"We encourage our customers to pay off their balance every month. Today, other reward cards only focus on spending," said Margo Georgiadis, Discover's head of marketing. "There's a significant, untapped need in the marketplace."
Someone who carries a balance of $3,000, and doesn't make additional purchases, would make minimum payments of about $60 a month. After the sixth payment, the customer would receive one month's interest, about $32, as a "pay-on-time bonus."
The card charges interest at an annual percentage rate of 13.99 percent, a spokeswoman said.
Discover, which struggled with bad loans about five years ago, more recently has been trying to boost loan growth by offering new cards and signing up new merchants. The unit's recent progress encouraged investment bank Morgan Stanley to announce plans to split the 21-year old issuer into an independent company.
The new program also comes as a time when the credit card industry, which relies on fees to boost profits, is under intense scrutiny from Congress and regulators who worry banks are abusing customers with excessive penalties and offering cards to customers who can't keep up with their spending.
Some consumer groups noted that the Motiva program might indirectly encourage borrowing, since the monthly interest "bonus" grows with the size of the balance.
"I would fear it will encourage consumers to carry larger balances," said Stephen Brobeck, executive director of Consumer Federation of America.
Author: angelo21
Posted: Tue Mar 13, 2007 8:32 am
Post subject:
Nice marketing gimmick but I’d rather PIF.
Author: Special K
Posted: Tue Mar 13, 2007 8:59 pm
Post subject:
Wow, a card that rewards someone for carrying a balance by rebating a month's worth of interest every six months as long as at least the minimum is paid when due . This quite possibly may be the worst idea for a rewards program I have heard of(at least for me). So if I PIF each month and have no minimum due all this becomes is a card that gives me up to 1% cashback on purchases. Think I'll pass, unless I'm missing something here.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Labels: Credit Card Rewards on Discover Credit Card, Discover Motiva Credit Card Cash, Rewards For Credit Card Payments
posted by CardRatings.com at 12:21 AM
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