Credit cards that offer great rewards programs will soon disappear as a result of the recent implementation of the Credit CARD Act and an anti-trust suit against Visa, MasterCard and American Express. Banks are now tacking on annual fees to most credit cards and will soon find it much harder to charge high transaction fees to merchants, making most credit card rewards programs unfeasible for banks.
Fortunately for consumers, debit card rewards are making a comeback in a major way through PerkStreet Financial. Here’s our PerkStreet Financial Review. The company is offering a checking account with an associated Visa debit card that offers 2% cash back on almost all purchases. The company also periodically offers higher rewards rates on certain types of purchases. For example, PerkStreet is currently offering 5% cash back on purchases at certain retailers through the holiday season.
The major gotcha of the account is that you need to have $5,000 in your account to get the 2% cash back. If you have less than that amount in your account, you’ll receive 1% cash back. Rewards also only qualify on non-PIN purchases, meaning that rewards apply when you make use of the “credit” function of your Visa debit card and not the “debit” function. The rule of thumb is that if you aren’t entering in your debit PIN number, your rewards will count.
PerkStreet Financial is itself not a bank, but has partnered with The Bancorp bank for its banking services to provide FDIC insurance and to comply with industry regulations. This is comparable to the arrangement that SmartyPig has with BBVA to serve as the banking back-end to its savings accounts. The Bancorp Bank has been FDIC insured since 2000 and is rated on Bankrate.com
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