When ChingWa Chan opened a brokerage account to start investing, she received a surprise perk: a debit card with ATM fee reimbursements.
“I didn’t really discover that feature until after I opened” the account, says Chan, a New York-based associate at the Dutch bank ING and travel blogger.
The debit card has become her go-to for ATM withdrawals, especially when she travels.
Although it's rare, some debit cards have features similar to credit cards — and your old checking account’s debit card might not cut it. If you’re looking for a new checking account, consider one with a debit card that offers one of these four perks.
1. Traveling fee-free
Some banks and brokerages, like Chan’s, reimburse ATM fees and don’t charge any themselves, shaving off costs you’d normally pay to get cash when there are no in-network ATMs nearby. And a few don’t charge foreign transaction fees. Banks that do charge them tack on about 1% to 3% of an international ATM withdrawal or purchase amount when a currency conversion occurs.
When to consider: If you travel often, a debit card that does away with foreign transaction and ATM fees can lower your costs.
» See several banks that offer no foreign transaction fees
2. Earning cash back
Debit card “cash back” usually refers to free cash withdrawals at a retail store checkout counter. That’s convenient, but it’s not nearly as satisfying as credit card cash back. You pay using a credit card and receive a percentage of your purchase as credit on your next statement or in your bank account.
A few debit cards now offer cash back, credit card style. You can find these at some online banks as well as some community banks that partner with Kasasa, a banking brand known for rewards accounts.
When to consider: If you’re not able to get a cash-back credit card or prefer to use a debit card, a cash-back debit card might fit well.
» Check out our list of the best rewards checking accounts
3. Budgeting in real time
Analyzing Excel spreadsheets or using apps like Mint or YNAB are decent ways to budget — if you don’t mind fitting them into your regular routine. Some online banks embed budgeting into your spending experience so you can label debit card transactions, track purchases to see trends and stash extra money for short-term savings on the go.
In general, “Debit cards can be very helpful when gaining discipline in cash flow or in spending,” says Douglas Boneparth, a certified financial planner and president of the financial advisory firm Bone Fide Wealth.
Being able to track spending more seamlessly is where these online banks have an edge.
When to consider: If you keep putting off budgeting, having a debit card that does it for you might be the answer.
» See our breakdown of two banks that bring budgeting to your banking
4. Investing as you spend
Apps like Acorns and Qapital link investing to debit card spending. When you buy something, each app can round up the purchase and transfer the cents to an investment account. Both let you link an outside checking account, so there’s no need to get a new debit card. But they offer cards that come with perks. Acorns, which has a waitlist for its card, enables its debit card round-ups to transfer instantly.
When to consider: If investing isn’t something you do regularly or you don’t have much to invest, these debit cards can help you get started.
» Explore more options on our list of the best money saving apps
Next question: One or two debit cards?
Getting a new debit card doesn’t necessarily mean throwing away your old one. There’s no rule against having multiple debit cards, though having more than one checking account makes your financial life more complicated.
Just make sure your main debit card and checking account — the bread and butter of your banking life — work for you. Having cool rewards isn’t worthwhile if your account lacks the services you need or charges you fees.
Rewards are "secondary, they’re not the main course,” says Boneparth.
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