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Up to 2% Cash Back With PerkStreet Financial Debit MasterCard

by on August 18, 2011 · 26 comments

in Debit Cards

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Update: PerkStreet Financial will be closing permanently and ceasing all business operations on September 26, 2013.

While 2011 has been an unprecedented year for credit card sign-up bonuses, the exact opposite has been happening with debit cards. In July we saw Continental discontinue all mileage earning on their Chase debit cards and most other mileage debit card programs are rumored to be ending soon. New financial regulations make debit card purchases not lucrative enough for the banks to make it worthwhile to give out points.

So what about all the people who can’t get in on the lucrative credit card deals but still want to maximize their spend?

Most non-points debit cards give lousy rewards that usually amount to .5 cents to 1 cent in value back (usually via gift cards) for non-pin purchases. Red Lobster gift card anyone? However, I recently stumbled across the PerkStreet FinancialSM Debit MasterCard®, which gives a whopping 2% Cash Back when you have a balance of $5,000 or more in your free checking account, or 1% cashback if you have less than $5,000. Cash back is in the form of a MasterCard gift card, which isn’t exactly cash, is pretty close and much better than a specific airline/restaurant/store gift card.

2% back is pretty incredible - even for a credit card. There used to be a Charles Schwab 2% cash back credit card that was hugely popular – even within the hardcore frequent flyer community, but it was eventually discontinued.

Beyond the 2% cash back, there is no annual fee, no monthly fees, a huge network of free ATMs and all money held is insured with FDIC (up to $250,000). They even have rotating categories/stores that offer 5% cash back, for example from August 1 to August 31, you’ll earn 5% cash back on all non-PIN purchases at Textbooks.comSM, Chegg.com®, Half.com®, and the Apple® store (online and in-store; does not apply to iTunes purchases), as well as at Amusement Parks (purchases with MCC code 7996).

This card could be great for a college bound child who may not have the credit for a good rewards card (nor want to pay an annual fee), yet wants to get cash back. I can also see this being good for people with credit issues, because there is no hard inquiry on your credit when you open up a checking account/debit card. So while you get your credit rehabilitated, you might as well be earning valuable cash back.

Honestly, I can see people with excellent credit and even business owners getting this card and maxing out on the cash back. There are no limits on the amount of cash back you can earn, so if you’ve got a spend of $20,000 monthly (not uncommon for a business), you’d get you $4,800 cash back every year as long as your balance is over $5,000 a month. Not an insignificant amount of money!

Overall, I think this is a great option for people from all sides of the financial spectrum. While I found out about PerkStreet through my affiliate network, I did some research and they have a pretty impressive track record and seem to be gaining market share in the debit card space, while most other companies are losing. Check out articles like this NY Times piece or this Boston Globe interview with PerkStreet CEO Dan O’Malley.

Even if you can’t afford the $5,000 minimum required to get 2% cash back, getting 1% cash back is much more valuable than getting 1% (or less) back in travel rewards/gift cards like most other debit card reward programs. Even the American Airlines Bank Direct account requires huge capital investments to earn any miles after the initial sign-up bonus.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • Jeffrey Griffin

    When searching for review I found this website: http://www.consumerismcommentary.com/a-review-of-perkstreets-5-cash-back-debit-card-and-checking-account/

    Check out one of the posts, it has some interesting information (I have not verified any of this):

    There are several problems with this bank, so I would warn potential customers to be aware of the fine print. Although PerkStreet’s website has the appearance of being clear about their policies, I found that not to be the case. These “fine print” policies seem designed to (1) make it difficult to move money out of the account, and (2) to limit the cashback that you can earn. Below are examples.

    (1) They have a limit of $1500 on incoming online transfers in an entire *month*! They don’t tell you about this anywhere except when you actually try to move money into your account. When I called them about it, they said that they have this restriction for new customers and I was still in my first month. After a couple more calls, I realized that they will increase this limit to $2500 after six months.

    Stated reason: Security.
    Suspected motive: To limit the amount of money you can spend to get cashback.

    (2) They have a limit of $500 on outgoing online transfers. So, say you move $5000 into your account to get 2% cashback. You are stuck with that money with them for the rest of the month (unless you adopt a slower paper check route).

    (3) They have a limit of $1500 on daily expenses and explicitly say on their website that it can be waived simply by making a phone call. I had to book two one-way international flight tickets that cost a total of over $1500. I booked these and called them to waive the limit. They refused to do so because I was still in my first month. There is no notice about waivers not being allowed in the first month anywhere. As a result, I have to now spend much more money re-booking that ticket just because PerkStreet does not allow me to spend my own money.

    Stated reason: Security for new customers. They claim that all banks have spending limits on debit cards. Really? Bank of America did not.

    Suspected motive: Limiting spending => limiting cashback.

    (4) When I tried to circumvent the limitation in (1) above to move more money into my account using FedEx, there was another surprise! The first FedEx check takes not 1 day as stated, but about 9 days for some reason. Again, some vague security reason that is incomprehensible to rational beings is given as an explanation.

    Bottomline: It is not easy to get much cashback because of their restrictive policies on what you can do with your money. And they make it harder to move money out of the account while not giving any interest on it. As for the 5% cashback, they are on such specific and tiny items that I have never been able to get 5% cashback so far.

  • Dewhit6959

    I was going to post a link to a review of this banking group, but it has been effectively communicated by Mr. Griffin’s entry.
    The fine print contains a few twist and turns. This does not seem to be a viable banking option for a working account.

  • Dewhit6959

    I was going to post a link to a review of this banking group, but it has been effectively communicated by Mr. Griffin’s entry.
    The fine print contains a few twist and turns. This does not seem to be a viable banking option for a working account.

  • Dewhit6959

    I was going to post a link to a review of this banking group, but it has been effectively communicated by Mr. Griffin’s entry.
    The fine print contains a few twist and turns. This does not seem to be a viable banking option for a working account.

  • Dewhit6959

    I was going to post a link to a review of this banking group, but it has been effectively communicated by Mr. Griffin’s entry.
    The fine print contains a few twist and turns. This does not seem to be a viable banking option for a working account.

  • Anon

    If you are going to use debit cards and give up the security of using a credit card, it would make more sense to have a rewards checking account. The interest they give on your balance will offset any additional cash back you can receive from Perkstreet.

  • Tmolta

    As The Band sang, “You take what you need and you leave the rest.”

  • HoKo

    @TPG Just to clarify, the Schwab 2% was not discontinued, but they no longer are accepting new applications. The business was sold to FIA Card Services (a subsidiary of BofA I believe) but those of us that had existing 2% cards were grandfathered in. I still use my 2% card for all my overseas travel and a fair amount of my domestic spend. Tough to beat a Visa that offers 2% CB and no FX fees!

  • http://www.perkstreet.com Jason Henrichs

    I’m the COO of PerkStreet and happy to answer any questions and misconceptions. First, PerkStreet’s debit card offers the same protection as a credit card when you sign for your purchase or use it over the internet. You can see MasterCard’s policy here: http://www.mastercard.us/zero-liability.html. Second, research has shown you’ll spend more when spending on credit than on debit which is why most personal finance writers recommend cutting up credit cards if you’re trying to maximize control of your finances. I could write a small novel on this and the math around opportunity cost vs. ROI, but will spare you the details. Lastly, I commend Jeffrey on his diligence in finding the old consumerist post. You’ll be interested to know that AV who wrote this post is today a happy customer and has earned several hundred dollars in cash back once the misconceptions were cleared up. You can read my entire response to AV below.

    If anyone has questions, don’t hesitate to email us at help-at-perkstreet.com; in addition a dedicated customer service group, every member of the team takes part of their day to answer questions.

    Best- Jason

    My name is Jason Henrichs and I work for PerkStreet. I’ve corresponded with AV since his experience and also worked with our customer service team to improve the information he was delivered. We are always working to improve the experience and any customer’s feedback is appreciated. We are taking action on the areas of AV’s experience that can be corrected, but there are several parts of his claim that I’d like to better explain.
    Unfortunately fighting fraud is a tremendous burden that has several impacts not just for the bank but for the customers as we establish a relationship. For AV’s first point, the limit does go up over time and with the deeper relationship. There are several ways you can get money in the account besides our free online transfer- by pushing the money from the other account, setting up direct deposit or sending a check. We recognized that this would limit a new customer’s ability to meet the $5,000 threshold which is why we put in a 90 day grace period where you earn 2% no matter what. If we were looking to bait and switch to keep your balance captive we certainly wouldn’t have done that. We keep a small share of the interchange earned when a customer uses the card and give most of it back to the customer. It is in our best interest to make sure customers can spend as much as they want while balancing the fraud exposure to us and to the customer.
    On the daily limit, I’ve worked with the customer service agent on how to better handle the situation and apologize that it was not a stellar experience.
    For your last point on the check, it is clearly stated in FAQs what the hold times are but let’s face it, wading through FAQs is a pain so you naturally picked up the phone where the representative was not clear in her explanation. Again, I’ve worked on the education that she should have inquired whether you were a new customer because their is an extra hold time for the first 30 days.
    Unfortunately banks have done little to engender trust so we’re fighting little by little to do better and earn that back. IM- I hope you’ll give us a shot. We aren’t perfect but I can assure we have many customers who love us. And I don’t know many other banks that have their COO writing a lengthy reply to an irate customer on a Saturday because he genuinely cares about making banking better.
    Any customer or potential customer can contact me directly if they have questions or suggestions: jhenrichs -at- perkstreet.com

  • Ed Chandler

    Seconded! Love that grandfathered FIA card!

  • Dewhit6959

    Further review of this product and the company has some interesting items. Bancorp handles the account.
    Nothing bad there. The only drawback I see is the lack of interest paid on the account balance. The kickback on using the debit card is commendable, but keeping the account balance over the 5k minimum required to gain this 2% negates the benefit. This is not a bad product, it’s just not that great a product. This is a product of Highland Capital and is testing the waters for a new banking models for the future.

  • http://www.perkstreet.com Jason Henrichs

    Thanks for keeping the dialogue going – we love being able to talk with customers / prospects about what we do or what we could be doing differently.

    I’d like to share why we think 2% is valuable (dare I say great) even with a $5k balance requirement. Assume you can find a checking or savings account somewhere with 5% interest rates today (if you do, please email me and I’ll be opening an account), that’s $20.83 a month in interest (which is also taxed). To earn that amount with PerkStreet, you need to spend $1,041 to be even (which most people spend at least that amount). The top interest bearing checking account isn’t even 1% today so divide by 5!

    You can also have a linked external savings account, keep a lower balance at PerkStreet and still earn the 1% – you’ll get whatever you find in interest (say the mythical 5%) and 1% on say $1k in spend for over $30 a month.

  • Jeffrey Griffin

    Thank you for your response Jason, I have applied for an account and will give you guys a shot!

  • Dewhit6959

    How about this….keep the current required daily balance or even raise it, but allow online bill pay? Most of the persons in this forum are probably using Amex or Visa/MC products to pay most bills already for the miles/points. My only need for debit is pocket cash. Another idea is to capitalize on the mile/point craze and see if persons will forego interest for miles.
    Hmmm. Maybe I need to pitch that idea to someone?

  • JR

    Hi Jason,

    I’m a PS Financial customer for about 2 months. Certainly love some things about you guys, but do hate some as well.

    I currently also bank with BofA and have been their customer for over a decade now. I’m keeping my account with them while banking with you as well. All my purchases are done with you guys. I certainly like that I am getting 2% back, and well 1% now since my 3 months are over and I don’t keep more $5k in my account.

    My only qualms that I have with you banking with you guys is that you guys do not, unfortunately, offer the same technology and conveniences that the big banks do. With that I mean depositing money into my account is a hassle. I know I can do EFTS to/from BofA to PS, but you guys have a limit of $1,500/month! When I’m traveling and I need to have more money in there, the other methods of depositing into the account are a hassle and money is not available instantly like with the big banks. I think this is something that people should be aware of.

    What would be great is if PS could institute something like Chase has done with depositing a check via your iphone. I certainly understand why a smaller bank such as PS would be cautious from doing something like that due to fraud and all, but still PS needs to come up with more convenient ways of offering their customers access to putting money into the account. Even State Farm which has recently also branched off into banking and thus should not be considered one of the “big” banks (WF, BofA, Chase, Citi, etc) also offers this convenience – deposit check via iphone.

    All in all though your customer service reps are pretty good, and I would say above average compared with the other big ones. I’ve banked with Chase and WF before and I totally despise them. BofA though has always been great for me. And you guys are not that bad, but I do think you guys need to find better ways of increasing convenience and access to your customers otherwise it’s a headache sometimes to get money into the account – it can take up to 2-3 business days before an EFT posts to my acount which in cases I need money fast it is a hiccup.

    I do appreciate though you spending the time on this blog and that you are certainly listening and responding to everyone’s concerns.

    Thanks.

    JR

  • Anonymous

    I’m curious as to the relationship between exchange rates and foreign transaction fees. If a card or bank has no (or low) transaction fee rates, are they generally (or frequently) offset by less advantageous exchange rates?

  • Anonymous

    They DO have online bill pay. I tried it once and I will never do it again. I used it to pay my rent and they “lost” my money. The money was taken out of my account on August 1st and online records showed it was deposited into my landlords account. It wasn’t. When I called Perkstreet I was bounced around from rep to rep (over the course of several days), placed on hold for lengthy amounts of time, disconnected, etc. I was finally told that it was “somewhere with the 3rd party”. When I asked why I was never provided with the information upfront that there would be a “3rd party” they said they didnt know. They DID call my landlord at my request to explain that the error was theirs and not mine, which bought me some time with my landlord (this was my first month in a new apartment) but Perkstreet never called me back to explain what happened to my money. Meanwhile, my landlord was (still) waiting for the money and Perkstreet decided to just refund the money back to my account instead. I did not know they were going to do this until I called THEM to check on the status of my money on August 8th…a week after the money was supposed to have been deposited into my landlords account. I would very much appreciate a response from Mr. Henrichs that could explain why this happened. It was a harrowing experience.

  • Anonymous

    They DO have online bill pay. I tried it once and I will never do it again. I used it to pay my rent and they “lost” my money. The money was taken out of my account on August 1st and online records showed it was deposited into my landlords account. It wasn’t. When I called Perkstreet I was bounced around from rep to rep (over the course of several days), placed on hold for lengthy amounts of time, disconnected, etc. I was finally told that it was “somewhere with the 3rd party”. When I asked why I was never provided with the information upfront that there would be a “3rd party” they said they didnt know. They DID call my landlord at my request to explain that the error was theirs and not mine, which bought me some time with my landlord (this was my first month in a new apartment) but Perkstreet never called me back to explain what happened to my money. Meanwhile, my landlord was (still) waiting for the money and Perkstreet decided to just refund the money back to my account instead. I did not know they were going to do this until I called THEM to check on the status of my money on August 8th…a week after the money was supposed to have been deposited into my landlords account. I would very much appreciate a response from Mr. Henrichs that could explain why this happened. It was a harrowing experience.

  • http://www.perkstreet.com Jason Henrichs

    JR – thanks for the thoughtful feedback (and sorry for the slow response – google alerts fail). We recognize that the existing deposit methods aren’t sufficient and have the remote deposit technology you’ve requested in testing right now. I’ll give a firm date when we are confident it will be ready but as you outlined the complex part of this isn’t the technology. We are very focused on the balance between fraud prevention and the impact on the customer. Of course if you are a big bank that pads your margins by sticking customers with fees and not offering rewards, it’s easier to absorb losses vs. PerkStreet focusing on giving as much back as we can while maintaining a scalable business.

    Just to be clear for others reading this, we don’t have a limit on the amount you can deposit into your PerkStreet account, just the amount you can initiate from our side (e.g. you can “push” as much as you want from BoA but they do charge a $3 fee to pad that profit margin). On the EFT front, I’d be curious about your experience with other institutions as we all run on the same Automated Clearing House maintained by the Fed so the times should be the same. Thanks in advance for your feedback.

    ~Jason

  • http://www.perkstreet.com Jason Henrichs

    Velpan – we’re still completing the investigation (unfortunately I hadn’t seen you post so this didn’t start until Friday when you emailed me directly). I apologize for the harrowing experience – I can assure you that this is a rarity and we work with one of the largest billpay providers that is used by the majority of banks in the US because they are electronically integrated with the most vendors and have the best track record. We will continue the investigation although I know that is of little consolation after you had to deal with your landlord.. regards, Jason

  • http://www.perkstreet.com Jason Henrichs

    Interesting question – most banks utilize the networks (e.g. MasterCard, Visa, Amex) for currency conversion and they set the fee. Some very large, multinational institution run this operation themselves but this is a small number. In either case, the institution runs sophisticated hedging operations to maintain relatively steady costs and even profits.

  • http://www.perkstreet.com Jason Henrichs

    Again I apologize for the confusion caused by the explanation our representative gave you and I appreciate your patience while we fully investigated what happened. For billers that are not electronically integrated into billpay, such as your landlord, a paper check is generated and mailed via the Post Office. The “deliver by” date you see in the billpay tool is based on the day the check is mailed + 5 business days for delivery (the USPS says 3-5 business days for delivery of first class mail). Once the check leaves our hands, we can’t control or track the USPS or what happens when it arrives at your landlord’s mailbox. Once a payment is in the system, we can’t change its destination, however, as the rep explained we can cancel the payment and the funds will be returned to your account once it is verified that the check hasn’t already been paid out by the recipient bank. I know in the internet era it seems like this should be instantaneous, but the banking system was designed long before the world wide web. While I wish we didn’t need to wait until the stop payment took effect, more than 500 million checks are forged in the US annually with losses over $10 billion!

    This did highlight some areas that we are going to work on with our Customer Service team to ensure they can deliver this information in and easy to understand format. I know that is little consolation after your experience, but we do appreciate you working with us to fix banking. I think you’ll find we compete and even beat bigger players on customer service plus we give massive amounts of cash back.

    Sorry for the wordy response, but I thought the questions your raised required a thorough response.

    Best, Jason

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  • Timster58

    you obviously work for another bank. All you have to do is pay $3 and deposit unlimited amounts to PS, but you have to do it from the other bank, not PS’s transfer tool.

  • Brendan Carroll

    Hi Jeffery,

    Transparency is extremely important to us and a staple at PerkStreet. Our transfer limits help protect us from fraud. Fraudsters have stolen hundreds of millions of dollars from banks via ACH fraud. We would rather give this money back to our customers in the form of rewards than to fraudsters.

    Our transfer limits only apply to transfers initiated from within PerkStreet’s online banking. There is no limit on the amount you may transfer into or out of PerkStreet if the transfer is initiated from your other account. This blog post goes into details on how to circumvent our limits- http://blog.perkstreet.com/perkstreet-transfer-limits-explained-how-we-stay-safe-while-offering-free-ach-transfers/. We also have an entire section of our FAQs (http://www.perkstreet.com/ask-a-question.aspx) dedicated to transfers.

    Our transfer limits vary by customer and do increase over time as the banking relationship grows. The more you use your account and our transfer tool, the quicker your limits will increase.

    You suspect our limits are to limit the amount of cash back our customers can earn. That is not true. In fact, we want you to use you card as much as possible because that is how we generate revenue. PerkStreet makes money through interchange (merchant) fees. We give our customers the majority of this fee back. Think of it as profit sharing. The more you spend on your card, the more money we make and in turn can pass that back to you as rewards.

    The majority of banks due have debit card limits, including Bank of America. Our limits can be raised, but not in the first month. These limits are for your protection. If a fraudster stole your card, they could quickly wipe out your bank account if there were no limits. You are also protected by MasterCard’s Zero Liability Policy.

    New customers (first 30 days) are subjected to additional holds and limits because that is when the highest rate of fraud occurs. These holds and limits protect the bank and minimize our losses to fraudsters. The sad fact is, bank fraud is prevalent in today’s world. Our holds are listed here- http://www.perkstreet.com/answer.aspx?questionID=39 and will be further communicated in our new on-boarding process which is being rolled out soon.

    In regards to the 5% back categories (http://blog.perkstreet.com/category/perkstreet/deals/), these are a bonus that we allow our customers to vote on each month. We choose retailers and categories where our customers are shopping all the time.

    I hope this helps you understand PerkStreet a little better. If you ever have any other questions or feedback, please feel free to contact me at help (at) perkstreet.com (replace at with @).

    Have a great weekend,

    Brendan
    PerkStreet Financial

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