While most of us are familiar with credit card rewards programs, debit card rewards are a new option on the banking front. These are a great choice if you’d like to reap some benefits without possibly incurring unwanted debt. Rewards and point programs on debit cards typically offer a lower value than a rewards credit card; however, many of us are using our debit cards regularly, and they do avoid any risk of credit card fees, interest or debt.
Debit card rewards can typically be divided into two types. The first is a cash back reward. Cash back reward programs often have no additional fees, and are quite simple. Points based rewards programs may come with fees, but can be more valuable. You may wish to shop around for the best debit cards for rewards/points or simply take advantage of programs offered by your usual bank.
The best bet in debit card rewards, whether cash back or points based is a new option on the market. The decoupled debit card, first introduced by Capital One Financial, allows consumers to use a card issued by a third party to access their bank accounts. Rewards on these new decoupled debit cards are substantially higher than the rewards offered by most banks, and typically take the form of a points reward program. You can expect more and more of these cards on the market in the near future. Moreover, co-branding common in credit cards will be available on these debit cards, allowing you to choose the rewards or points programs right for your needs.
Competition from new decoupled debit cards may encourage your own bank or other full service banks to step up the rewards on their debit cards. Today, some of the best debit card rewards programs are found at common national bank chains.
Washington Mutual’s free checking account gives 3 cents on every purchase up to $250 per year as a reward, while Citibank’s ThankYou program rewards one point for every $3.00 using a PIN and for every $2.00 via a signature transaction. Chase Bank offers points based debit rewards redeemable for airline miles; however, the best of these cards at one point per dollar spent does require a $65.00 annual fee. You may wish to take the time to speak to your own bank regarding their debit rewards programs. Fourteen of the fifteen largest Visa debit card issuers in the country now offer rewards programs of one sort or another, so you may find more available on the card you already carry than you expect.