How to make paying off debt pay

When you're buried in debt, choosing a credit card is typically a question of finding the one with the lowest interest rate -- not one that has a rewards program. After all, a 1% cash-back bonus isn't much of a perk when you're paying 18% or more in annual interest. Now some credit card companies, including Discover and Bank of America, are trying to convince you otherwise by launching credit cards that offer special cash-back rewards meant to appeal to those carrying a balance. The goal, they say, is to help folks manage their debt better. "We found 85% of (consumers who carry a balance) prefer rewards for paying on time versus rewards on spending," says Margo Georgialis, the chief marketing officer for Discover. "So we created a program that combined both. It wasn't just about rewards, but about a total experience of being on top of your credit." Discover's Motive card, launched this month, offers a twice-a-year cash-back bonus equal to your interest charges for one month, provided you make payments on time for six months in a row. Bank of America's Money Return Visa, on the other hand, gives revolvers a 10% rebate on the interest charges they've paid for the past year. Both cards feature low-rate promotional periods -- 3.9% until 2010 and 0% for six months, respectively -- on balance transfers and no balance-transfer fees, making it easier for consumers to make a dent in their debt.How the math works out But do these new cards stand up to the no-frills low-rate cards or attractive 0% APR (annual percentage rate) balance-transfer offers that revolvers typically favor? It all boils down to the math, says Scott Bilker, the founder of DebtSmart.com. With Bilker's help, we ran debt payoff scenarios for the two new cards, comparing them with two "old-school" credit cards that also target revolvers, but by using low rates rather than special rewards. The Simmons First Visa Platinum card is currently the lowest-rate card out there, according to Cardratings.com, with a 7.25% fixed APR. And with a promotional offer of 0% APR for the life of the balance, as long as you make two purchases a month (use code F1K7), Citibank's Diamond Preferred Card is one of the best balance-transfer deals around, as long as you approach it smartly. (For details on each offer, see the table below.)