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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