A pre-existing liability payment and reward system including a user communication module in communication with a pre-existing liability holder; a merchant communication module that transacts with the user communication module and a processing communication module; a processing communication module that communicates with the merchant communication module and a provider communication module; a provider calculation module that determines a reward; a provider communication module in communication with the provider calculation module; a system calculation module that determines a reward and communicates with a system communication module; a system communication module in communication with a system calculation module; a holder calculation module managing a pre-existing liability holder user account; and a holder communication module in communication with a user communication module and the system communication module. A method of use is also provided.