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July 11, 2006
Some debit cards aren't completely worthless
Banks have made debit cards more attractive for people who don’t want to use credit cards but are looking for an alternative besides cash or checks. (Does anyone besides my mom use checks any more?)
Bank of America's "Keep the Change" program rounds up the purchase to the nearest dollar and transfers the difference from checking into savings and matches those funds for the first three months, up to $250. Afterwards, they match 5%. This thread works out the details - to earn the $250 in the 12 weeks that BofA matches 100%, you need to make 253 purchases of, say, $1.01 (or $2.01 or $3.01, etc.) to earn a 99 cent match. That works out to three purchases per day for three straight months - kinda toughh. Plus, you're forced to have a low-interest BofA savings account.
Washington Mutual offers a debit MasterCard that earns three pennies per purchase, up to $250 a year. As long as you make purchases for less than $3, that's equivalent to 1% or more cash back. I guess you could fill up your tank with 40 $1 gasoline purchases and earn $1.20 (3% cash back! Wow!). Or just get a credit card that pays 5% for gasoline purchases?
North Fork Bank gives a point for each dollar spent in the DebitPerks program. 10,000 points is good for a $50 gift card at Starbucks, Eddie Bauer, etc. That only works out to 0.5% cash back. Plus the annual fee is $20 after the first year, but you do get 500 points to sign up. No thanks - if you really want some free Starbucks, there's a free $10 gift card available for getting the Starbucks reward card.
Chase offers a point for each dollar spent, too, and with no annual fee and 1,000 points for signing up, it beats North Fork Bank's debit card. But 4,000 points is only good for $10 gift cards, or only 0.25% cash back. Again, why bother when Chase offers a great Free Cash Rewards Visa?
Finally, Citibank rewards you with a point for every $2 spent or for every $3 spent when you use a PIN. You get bonus points for enrolling in online bill payment. I like Citibank but I like their cash back credit cards a whole lot more than this deal. If you are absolutely set on a debit card, this is the one I'd go for since 25,000 points earns a round-trip plane ticket to anywhere in the continental U.S. (So if the ticket works out to be $500, then it'd be equivalent to 1% cash back).
Posted by brian at July 11, 2006 11:05 AM