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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
|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