Discover, You’re An Idiot

Credit Crunch

I received a letter in the mail the other day that was equal parts shocking and appalling… and sadly, genius.

Discover, a credit card I’ve held for a couple years and last used nearly that long ago, sent a letter offering me $500 and encouraging me to rack up massive amounts of debt in the process.

The hook was obvious.  Who doesn’t want five crisp bills?  But the catch was brazen and laughable and dangerous.  Simply notify Discover that you want to make them your credit card of choice and then proceed to spend $2000 a month on the card each month for the next four months.  Presumably the first step is optional

I actually found myself insulted at the mere thought of such an offer.  I suppose that reaction may sound elitist but I’ll count that as a compliment when compared to the brain waves engaged by those eager to fall prey.

That’s $8000 in new credit card debt in exchange for $500 in return – an amount that would be consumed by the interest charges nearly as quickly as it would be “earned”.

Now forget for a moment that we’re still in a slow recovery from an economic swoon brought on my too much debt… let that sink in for a moment… but actually planning to incur eight grand in plastic debt before summer hits its full stride is a losing plan all around.

As for those willing to game such an offer, I generally laugh at your hubris.  Personal finance is not a math problem.  Credit cards and their purveyors would be tame beasts and not nearly so widely marketed were logic a principle tenant in their usage.

Consider that no one signs up for such an offer without some hope or idea of benefitting.  That alone puts you in questionable company. 

But suppose you were able to navigate the offer, including the small print and specialized restrictions and terms of the deal.  Through it all you were able to pay off each balance and incur zero interest charges.  In this unlikely scenario you would have managed to prove 2 things – 1) you are the rare exception to the rule and not the true object of Discover’s snare, and 2) you likely have a healthy cash flow position such that jumping through such hoops for a couple hundred bucks should generally not be worth your hassle.

At least that’s my take and why I’ll rail against such offers every time they cross my path.

But that’s why Baskin Robbins offers 31 flavors of ice cream.  There’s a taste for every taste, and more than most will make Discover fat.

Photo By: bitzcelt

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Category: Personal Finance

5 thoughts on “Discover, You’re An Idiot

  1. Could you take out a cash advance and pay it back immediately? If so, why not? Just advance yourself a couple grand for a day, pay it back the next. Repeat next month and after 4 months, collect a cool $500.

    If you couldn’t do that and have to spend $2,000 a month, (unless you use it to pay for necessities you’d pay anyways, like mortgage, etc)…you’d be an idiot.

    There ARE ways to play the game and win, though the odds are stacked against you and I wouldn’t recommend it to anyone…not even myself. :)
    .-= steven@hundredgoals.com´s last blog ..The Five(ish) Year Plan =-.

    • Dave Ozment on said:

      Admittedly I did not read all the small print but I’d imagine there are plenty of catches or exceptions that would hinder the spend process…. I’m pretty sure cash advances would be excluded.

      I agree that it *could* be gamed but there are risks there… sudden job loss or car accident/injury or simply a lost focus over the 4 month period. All of those could leave you with extra debt and short of the ‘prize’.

      Some folks just enjoy these types of games and build blogs around them…. that’s ok if that’s their schick, but gaming in this way doesn’t sound (to me) like a long term path to where I want to go.

      Besides, like you there’s some self trust involved and “having” to spend 2k on plastic each month begs for justification of unnecessary spending.

      Dave

  2. Mark on said:

    First of all, great write up, enjoyable style.

    Now, as far as credit cards go, aye, I do agree with you on the mere thought there is actually someone working for these companies who is signing off on the soliciting campaign is ridiculous but the fact is there is someone out there who does it. And someone out there who will give into it.

    Hence the power of financial education.
    .-= Mark´s last blog ..15 Minutes Around The World … =-.

    • Dave Ozment on said:

      Thanks Mark, I glad you enjoyed the article. It is amazing what people will try to get away with… honesty, integrity, and accountability seem distant themes at times.

      Thanks,
      Dave

  3. I have read over a number of of your current blog entries and I was curious if you wanted to swap web site links? I am continually wanting to trade links with personal blogs about very similar content! I look forward to hearing back from you quickly.

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