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Are Debit Card Rewards Still Possible? PerkStreet Financial Says Yes

Update August 12, 2013: PerkStreet announced that they will be ceasing operations as of September 26, 2013 and will no longer be accepting applications.

PerkStreet Financial hopes to counter those who say that free and rewards checking are gone forever. It’s an entirely online bank offering a debit card with a super rewards program, at a time when many similar rewards programs are disappearing left and right. It seems like every day we report about some bank or another raising fees on checking accounts or slashing debit rewards. PerkStreet, on the other hand, continues to offer consumer-friendly checking. It’s nice to know that good debit cards haven’t disappeared.

PerkStreet debit rewards in a nutshell

Open an online checking account with Perkstreet Financial, and you’ll get rewards for any non-PIN debit card purchases you make (that’s when you run your debit card like a credit card at checkout).

  • 5% back at rotating merchants that change monthly, up to $5,000 spent a year
  • 2% back at Target.com, Amazon.com, Walmart.com, BestBuy.com and iTunes (in case you haven’t guessed, the 2% applies to online purchases) up to $2,500 spent a year
  • 2% back at all of those stores in person, up to $2,500 spent a year if your account balance is $5,000 or more
  • 2% back if you and a friend use your PerkStreet cards in the same place within 60 minutes of each other, unlimited
  • 1% back elsewhere, unlimited

In any case, you won’t be charged monthly maintenance fees if your account is active that month (there’s a $4.50 inactivity fee). In addition to the well-above-average rewards rate, PerkStreet is pretty user-friendly as well. You’ll get cash back in the form of “Perks”, which you can redeem for gifts cards at a dollar-for-dollar rate at vendors like Amazon.com, Target, Olive Garden and Starbucks, just to name a few. You can redeem for straight-up cash back in the form of a statement credit, but unfortunately, this no longer gives you the full value: you can have $20 deposited in your account for every $22 you earn in Perks.

How do they do it?

The Durbin Amendment, which limits the amount of money banks can earn from debit card purchases, has made debit rewards programs considerably less profitable for big banks. However, the amendment doesn’t apply to banks with less than $10 billion in assets, so for most of the little guys, it’s business as usual. However, PerkStreet has the added advantage of being 100% online, which, as you might imagine, saves them quite a bit of money in real estate and personnel costs. This isn’t so convenient if you need to talk to a banker in person, but as far as debit rewards go, their offer can’t be beat.

The other guys

When you take a look at some competing checking accounts, PerkStreet looks pretty good across the board, especially when it comes to debit card rewards. The TD rewards program, one of the better remaining programs at major banks, is only available on the Convenience checking account, and offers, at best, 1% rewards on PIN transactions. It’s still worth looking into if you prefer a brick-and-mortar bank, but if you like online banking enough to do it full time, a PerkStreet checking account might be just what you need.

PerkStreet Chase TD Bank Wells Fargo
Account Online Checking Chase Total Checking TD Convenience Everyday Checking
Min. monthly fee None $10 $14 $7
Avg. daily balance
to avoid maintenance fees
N/A $1,500 $100* $1,500
Debit rewards? Yes No Yes No
Rewards expire… Never N/A 3 Years N/A
Maximum cash back 2% N/A 1% N/A

*TD’s is listed as a minimum rather than average daily balance requirement

  • Jillian

    I love the idea of Perkstreet offering debit card rewards, but I just
    wanted to point out that I have a Wells Fargo Checking account. They do
    not charge me $7 a month or a $1500 minimum average balance to keep my
    money there or else I would have left them a long time ago. It’s not
    that I even particular like Wells Fargo. It’s just a bank that happened
    to me when I entered college, but we do need to be fair. The only fees I
    hate at WF are the international fees for buying goods from overseas
    and of course the interest rates they pay are a huge joke, but it’ll
    work for me until I decide to make the transition to another bank.

    ……….I just looked it up a second ago, and your numbers correct, and I only
    haven’t noticed because you also get to bypass all fees if you have more
    than $500 direct deposited your into account each month. I do, so the
    fees never came for me. Nonetheless, this article is a good reminder
    that I need to go bank hunting.

    • http://www.facebook.com/dave.kiser.18 Dave Kiser

      Yes and everytime you spend money with your Wells Fargo Debit card, you are losing at least 1%. Why pay 1% more for everything than you have to?

  • Steve

    Woops.. I guess this doesn’t really work. As of today, they’re doing away with their “Perks”. Too bad if you’d accrued any, they’re gone.

  • Reynard Baillou

    Well this stinks. Netbank, ING, and now Perkstreet. This does not imbue confidence in this business model. I have used online banks for the past 8 years and every time I get comfy BAM we’re closing.

  • OmegatronV

    Got hit with $300+ in return fees, called Perkstreet to see if they can waive it entirely or at least take out a few but talked to a customer service agent that was irate and didn’t wanna help. Loved this bank in the beginning and never had a problem with them before but it seems that them shutting down appears that they are robbing their customers before they go too.