Discover's cash-advance option could replace your debit card

Credit card being swiped through a card reader

Discover credit card holders can get cash when they make a purchase at selected stores by taking advantage of the Discover Cash Over program. In contrast to regular, pricey cash advances, there are no fees associated with Cash Over transactions.

Here’s how it works: When you make a purchase at a participating retailer, choose how much cash you want to receive beyond your purchase amount. No PIN is required.

The cash amount is added to your purchase price, and the entire transaction is treated like a purchase, not like a cash advance.

If you carry a balance, the Cash Over amount will be subject to the same interest rate as your purchases.

Merchants set their own limits for how much Cash Over consumers can obtain. Discover also limits consumers to $120 a day in Cash Over.

Most of the participating merchants are grocery stores, though some sell groceries along with other items.

Examples of retailers that offer Cash Over include Dollar General, Sam’s Club and Walmart as well as the major grocery stores chains in the Safeway, Kroger and SUPERVALU families. Not all locations may offer Cash Over, however.

In the face of new debit card fees, the Cash Over feature could help you save money. Instead of using your debit card to make a purchase and get cash back, you can use a Discover card.

But the key to saving money with this method is to pay your credit card bill in full and on time. If you have to pay interest charges on your Cash Over transaction, it’s no longer a free perk -- it's a really expensive loan.

The company hopes this feature will entice more consumers to use Discover cards.

Of course, Discover will also make more money if the program causes consumers to carry higher balances and pay more interest.

But for consumers who don’t carry a balance, Cash Over is a free convenience.

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