Debit Cards With Rewards

Like credit cards, debit cards with rewards are a popular attraction, but unfortunately, many banks are choosing not to offer rewards with debit cards anymore. If you are interested in obtaining a debit card with rewards you’ll want to perform your research as these popular cards are slowly disappearing. The change came about as Congress enacted the regulatory financial reform law which places interchange fees when a customer uses his or her debit cards. Due to the new fees, many debit cards with rewards programs will cease to exist. If you are currently enrolled in a rewards program for your debit card, you’ll want to contact your bank or financial institution immediately to determine whether or not the program will continue. The new law goes into effect on July 21, 2011, but many debit cards have ceased their rewards programs months in advance.

Those who wish to continue with rewards programs, but unfortunately discovered that their debit card is no longer participating in a rewards program, may find that the best option is to apply for a rewards credit card. If you had selected a debit card due to your credit rating, it may be in your best interest to work on repairing your credit so that you can apply and get approved for a rewards credit card.

If your bank is closing out their debit cards rewards program, then you may also find that it is a good idea to research different banks and find one that offers rewards, then make the switch. Debit cards with rewards aren’t as lucrative as credit card programs, but they do offer enough benefits to make them worth obtaining. You may also find that the benefits are so worthwhile, it’s worth switching financial institutions over. Most debit cards with rewards programs will require you to use your card as a credit card and sign for the purchase in order to obtain the greatest rewards. Once you’ve performed your research and have located the best banks, credit unions and other financial institutions offering rewards programs, you’ll want to compare each offer and determine what rewards the institution offers. Some programs may restrict rewards based upon the retailer, others may offer less rewards for pin transactions while others may provide greater benefits to those who sign for their transactions.

Make no mistake about it; every bank and financial institution that offers debit card with rewards will have their own unique program. No two rewards programs are alike, ensuring that you must perform adequate research and ask any questions if you are unsure how the program will benefit you.

The reason many financial institutions are winding down their debit cards with rewards programs is that based upon new federal ruling, banks and other financial institutions will no longer earn the profit they did from making a debit card transaction. The current average price per debit card transaction has been 44 cents each time the debit card is swiped. The new federal ruling requires the fees to be reduced to 12 cents. The reduction in fees means that banks and other financial institutions will lose money when they process debit cards. The name of the Act is the Dodd-Frank Wall Street Reform and Consumer Protection Act, and as you can imagine, it has not gained popularity with consumers.

In addition to the Dodd-Frank Wall Street Reform and Consumer Protection Act impacting debit cards with rewards, there is also likelihood that significant changes are in store for those who use debit cards frequently. It is possible that there will be new fees and restrictions associate with debit card use as banks try to make back some of the money they will lose due to the transactions.