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What is the Best Points Debit Card and Checking Account?

by on October 10, 2011 · 41 comments

in Alaska, Citi, Debit Cards, US Airways

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

I’ve been asked this question a lot lately – especially as banks continue to roll back the benefits of debit cards and add fees, like Bank of America recently announcing their $5 monthly fee on most debit cards.

While I am a big advocate of having a strong credit score and leveraging powerful points earning credit cards like the Sapphire Preferred and Amex Premier Rewards Gold to maximize every dollar you spend, many people prefer the simplicity of debit cards. For one, you don’t need to have good credit to get a debit card – the bank will simply run a soft inquiry on you to make sure the information you provide is correct. There are strict laws that banks need to “know their customers” due to anti-money laundering and terrorism, but these soft inquiries will not hurt your FICO score.

Secondly, people like debit cards because they keep you within your spending limits. Unlike credit and charge cards which will let you run up huge balances, debit cards will generally only let you spend the money you have in the bank – with some allowing modest over-drafting (at high fees, of course).

The bad thing is that new financial regulation has made debit cards less profitable for banks and thus rewards have been drying up, with Chase officially canceling their Continental airline rewards cards this July. However, there still are a couple decent options for those looking to get decent rewards for their checking accounts and debit card spend:

Checking Accounts:
1) Until 10/31/11 Citi is offering 40,000 ThankYou points for opening up  a Citigold checking account. Once opened, enroll the account in ThankYou Rewards and within 45 days after account opening, initiate one direct deposit AND complete one electronic bill payment for two consecutive months. Offer open to new checking customers only, 18 years or older.

ThankYou points cannot be transferred to any airlines, but they can be redeemed towards travel and gift cards at 1 cent per point, so this sign-up bonus is worth $400. The bonus ThankYou Points will be credited to your ThankYou Member Account within 90 days from the end of the statement period in which you satisfy all offer requirements. New checking account must be open and in good standing at the time the bonus ThankYou Points are posted to your ThankYou Member Account.

Citigold account details:

  • Open your Citigold interest checking account with a $500 minimum deposit.1 There’s no monthly service fee for the first 2 statement cycles. After that, we’ll continue to waive the monthly service fee if the combined average balance of your eligible linked accounts is:
  • $50,000 or more for all linked deposit and retirement accounts OR
  • $100,000 or more across all your eligible linked Citiaccounts, excluding a first mortgage with Citibank OR
  • $250,000 or more if your Citibank first mortgage is included in the total relationship.

Otherwise, a $30 monthly service fee will apply.

So, essentially if you complete the minimum deposit of $500 and then initiate a direct deposit and do two monthly bill payments, in the worst case scenario you’d have to pay for 2-3 months of $30 fees (unless you can meet the huge monthly balance requirements). However, in my experience Citi posts points pretty quickly, so it’s quite possible you wouldn’t have to wait the 5 months total to get the sign-up points.

2) Bankdirect American Airlines Checking Account with Interest. BankDirect used to offer a 23,500 mile sign-up bonus, but they have expired to my knowledge. The best I could find on their website is:

  • Earn 1000 miles for opening a Mileage Checking Account
  • Earn 10,000 miles for signing up for payroll direct deposit into a Mileage Checking Account
  • Earn 5,000 miles for using BankDirect’s bill pay service for 12 months
  • Earn 100 miles per month for every $1000.00 of the collected balance in your Mileage Checking Account up to the first $200,000. Earn an additional 25 miles per $1,000 in balances over $200,000, WITH NO CAP!
  • $100.00 minimum to open
  • Interest compounded (credit method) daily
  • Interest paid on collected balances
  • First order of personalized checks free (50-pack)
  • Free Bill Pay Service
  • Free Visa® CheckCard upon request
  • Four (4) reimbursed ATM withdrawals per statement cycle (up to $2.50 per transaction)

Debit Cards:

Perkstreet Financial 2% Cash Back Debit card. This card doesn’t give miles, but instead gives 2 cents back per every dollar spent (non-ATM), so you can use the credits to buy any travel reward – or anything else – that you might want. In my opinion, if I had to only use a debit card, it would be this card. See my full post on it here.

Bank of America US Airways Debit Card
: 3,000 miles for sign-up and 1 mile for every $2 in non-ATM transactions. $30 annual fee. Using this card also counts as a hit in the US Airways Grand Slam promotion which ends 11/14/11. Beware of the $5 monthly fee.
Bank of America Alaska Airlines Debit Card: 3,000 miles for sign-up and 1 mile for every $2 in non-ATM transactions. $30 annual fee. Beware of the $5 monthly fee.
Suntrust Delta Debit World Check card- $55 annual fee, 5,000 Skymiles with sign-up. 2 miles earned per dollar spent on non-ATM versions. $20 annual version also available with a 2,500 mile sign-up.

Other banks are also scaling back their debit card rewards programs, like Wells Fargo, who is no longer accepting new members. Per their program FAQ:

Q: What changes are occurring with the Rewards for Debit Card program?

A: Currently, debit card customers are no longer able to enroll in the Rewards for Debit program or the Rewards for Business Debit program. Additionally, as of October 8 2011, existing rewards customers will no longer earn points on debit card transactions or bill payments, including purchases made through the Earn More Mall shopping site. Note: Points may continue to post to Rewards accounts for qualified transactions that occurred on or before October 7, 2011.

In general, debit card rewards are much less lucrative than credit cards, but you might as well get something. If you have any other good debit or checking account deals, please feel free to share them in the comments section and I’ll add any noteworthy ones to the post.

 

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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  • Jason

    As an addition to the above list, Delta also offers a SunTrust check/debit card. Details at http://skymilesoffers.delta.com/check_card_partners.php but they have a 5000 mile sign-up bonus for the “World” card… along with a $55 fee.

  • Valerie Glassman

    Would BoA charge the additional $5/month for the USAirways debit card on top of the $30 annual fee? Seems like a better deal to get that card than my current card if that’s the case.

  • Victoria

    “Unlike credit and charge cards which will let you run up huge balances, debit cards will generally only let you spend the money you have in the bank – with some allowing modest over-drafting (at high fees, of course).”

    It may be worth noting that you shouldn’t be playing around with travel cards at all if you’re not paying off your balance in full each month. The high interest rate on rewards cards will more than wipe out any saving.

  • PJ

    anybody knows if Citi reports thankyou points to IRS as interest income? 50000 can not net too much for staying as liquid cash. it is a good deal if 50K can earn you in say 5 months 400 worthy gift cards free of Federal and local taxes

  • Bexho2000

    I signed up with Bankdirect when they started ruuning the AA promo. While the experience has been good and the miles for monthly average balance have posted regularly I am still waiting to see any bonuses. Hard to communicate and email responses take over 2 days?!?! They require you to mail pay stubs poving they your paycheck is being deposed directly to thei nbank (strange way of checking). I did this over 3 months ago and they still have not posted the promised bonus even after emailing them 3 times! They also require you to use their debit card at least 20 times/month (billing cycle) for 3 consecutive months to qualify for their 5,000 miles Debit Card bonus. Very frustrating – just stating my experience, hope yours has been better….

  • Neil

    I currently have the SunTrust World card. Just fyi for those that might be interested. SunTrust will begin charging $5 per month for debit card usage next month as well as require a $500 balance or an ACH transaction to avoid a monthly fee.

  • Federico

    Brian, BankDirect Mileage Program still active (just not interest)

    http://www.bankdirect.com/programs/aadvantage.aspx

    -Earn 1,000 miles for yourself and a friend from our Refer-A-Friend Program

    New Account Offer:

    -Earn 1,000 miles for each new Mileage Checking Account or Mileage Money Market Account opened. Additionally, earn 1,000 miles for every $100,000 in initial deposit, up to $500,000, per household.

    -Earn 10,000 miles for establishing full payroll direct deposit from your employer into a Mileage Checking Account.* Click here for full program details!

    -Earn 5,000 miles for using BankDirect’s bill pay service.* Click here for full program details!

    -Earn 5,000 miles for using your BankDirect Visa® CheckCard.* Click here for full program details!

    -Earn 1,000 miles for referring a friend when they open a Mileage Checking account. Click here for full program details!

  • Dan

    Good question! I’d like to know the answer myself!

  • Dan

    Good question! I’d like to know the answer myself!

  • Anonymous

    What are the open options for doing the direct deposit in citi bank. Ach push ing paypal, which of them are still good ways?

  • Anonymous

    What are the open options for doing the direct deposit in citi bank. Ach push ing paypal, which of them are still good ways?

  • Dan

    Just saw this in the terms and conditions:
    “Value of rewards from redeemed Points will be reported to the IRS as miscellaneous income on Form 1099-MISC, as required by applicable law. “

  • http://www.facebook.com/CapnRick Ricardo Deleon

    Thanks… very useful article. I use the PayPal debit card, which always attracts a lot of attention. It pays a 2% rebate on usage, but seems to overcharge a bit on foreign/overseas transactions.

  • Chris D.

    Valuable info…Citigold checking combined with a new Citi T/U Premier could net 90k T/U points. What happens if we close a Citigold checking account after the T/U pts are transferred? Could they go in and remove the points? I’m not real familiar with T/U points recently…

  • PJ

    good to know paypal debit card rebate 2%

  • PJ

    Google ‘reward checking in (your state) ‘ : it comes withDebit card and pays much higher interest rate to a capped balance> However it comes with a requirement to charge on the DEBIT card 10-15 times a month aslo an auto ACH bill payment or Deposit. My friends used to split up the grocery purchases into a few charges before I told them “wireless and cable accounts etc let you make small installments online.” ie a 100 dollars monthly bill can be split ezily into 10+ more charges. or charge with DEbit cards at McDee Burger kings subways etc if your credit card alternative is only 1 % If i have major purchases, I go back to my normal credit cards to maximize the rebate..

  • http://flavors.me/mbrosen mbrosen

    I was going to mention the Paypal Debit card.

    I thought it was only 1% back, but perhaps that goes up with the amount you spend each month, specific categories, etc.

    Also, I believe you can link it to/define a checking account for “overdrafts” when you don’t have enough cash in your Paypal account to cover a debit transaction. It will just automatically deduct from your checking. This way, you don’t have to pre-load your Paypal account in advance of using the card.

    I was thinking of switching all of my debit activity to my Paypal Debit Card since Chase cancelled the RealCash Cashback program. They’ve switched it to Ultimate Rewards, but with checking accounts, you no longer receive points for everyday transactions, just activity done through the UR Mall or via special offers. Not that exciting anymore.

  • Benthelefty

    Thanks for reporting that…that pretty much kills the deal for me (unless I’m going to go buy 20 packs of gum at different times…)

  • Benthelefty

    You signed up for the debit card? The one advertised is the visa check card. I assume these are different?

  • Benthelefty

    no. they won’t remove already posted points.

  • Benthelefty

    I just spoke with a rep and she couldn’t confirm the no fee for first 2 months.

  • Guest

    I second the comment regarding Bank Direct AA Mileage Checking. Beware the bait and switch they will definitely pull on you! This bank used to be a responsive & worthwhile business – according to many friends with accounts there, they promptly answered emails and promptly posted bonuses. Now, the situation is very different. Bonuses never post. I can personally vouch for that. They have added a sentence on the web site stating ” we reserve the right to deny…” which essentially amounts to a cop-out used to deny bonuses for no reason. Although they have absolutely no terms describing any minimum amounts for check card purchases, they will absolutely deny your bonus based on subjective ‘no you have not qualified’. If your purchases on check card are small, just everyday things, they will say ‘this does not qualify’, although they cannot substantiate WHY it does not qualify. Basically, they have lost revenue from the new debit card laws, and will now use any excuse to deny the check card bonus, even though they have no grounds for doing so. However, they DO still keep the supposed bonuses posted on their web site- you just will not receive them. Major bait and switch. I have 3 friends who have not received the payroll direct deposit bonuses either. They require pay stubs and so forth, but even after submitting the paper work, they will simply not grant the bonus and not answer your email. The entire operation has gone downhill and they will use any excuse not to pay your miles, so beware. The ONLY thing I can say about this bank is that you will get your miles posted monthly for your balance- this they adhere to- and it is timely. But anything else- forget about it- you will not get it. Avoid them and go elsewhere. Very disappointed.

  • Benthelefty

    Further reason to stay away. I went w/ the Citi deal. $400 in TY points for not much work is the best deal (heck it’s almost as good as a credit card sign up). I snagged my account already and will get my deposit and payments super fast, so hopefully it will post w/o problems.

  • Dan

    Some of these are only available in certain states. For example I’m in Missouri and can’t do the Suntrust Delta card. Just FYI

  • Alex C.

    What exactly is ment by “Beware of the $5 monthly fee.” for the BoA cards? Can anyone explain? Is it just $30/year or $30/year + $5/month?

  • Bexho2000

    Their Visa Checkcard is the equivalent of the debit card. Good idea to stay away from them – not worth parking your money for a lot of frustration…better options out there.

  • BoraBora

    Hey ,

    Sorry stupid question im new to this. Can I transfer citi thank you points to other programs ? Like AA, starwood, marriot, hilton, continental / united ?

  • Anonymous

    No- per the post “ThankYou points cannot be transferred to any airlines, but they can be redeemed towards travel and gift cards at 1 cent per point, so this sign-up bonus is worth $400. The bonus ThankYou Points will be credited to your ThankYou Member Account within 90 days from the end of the statement period in which you satisfy all offer requirements. New checking account must be open and in good standing at the time the bonus ThankYou Points are posted to your ThankYou Member Account.”

  • Anonymous

    $5 a month for most debit cards per the link http://money.cnn.com/2011/09/29/pf/bank_of_america_debit_fee/index.htm

  • jw

    I use the SunTrust Mastercard. But as others have said, they are bringing a variety of new fees into the picture. At the end of the day, most of the banks are starting to slap fees on the Debit Cards.

  • jw

    to clarify…the Suntrust Debit Card is a Mastercard branded product.

  • PJ

    BIG TIME Sapphire Preferred beat Citi Thankyou card for tax consequence on rewards

  • Jason

    An update on the SunTrust Debit card. SunTrust use to offer the Delta Classic and Delta World debit cards, only the SunTrust World is now available. The $5 monthly fee was drop and the annual SunTrust Delta World card fee is now $75

  • gg

    ,…and you only get 1 mile for every $2….

  • Tricia

    Bank of America is cancelling their partnership with USAirways on debit cards. Wondering if you’ve heard of any other banks since this was written offering miles debit cards?

  • Anonymous

    TY Points Guy! PerkStreet is the way to go. Thanks for the heads-up in the midst of this backlash from sound regulation of the “too-big-to-fail” banks.

    Thank you, thank you, thank you.

  • Pingback: Sunday Reader Questions: Any Good Debit Card Rewards Programs Left? | The Points Guy

  • http://www.facebook.com/bob.erickson2 Bob Erickson

    @gg – False! You get 1 mile for every $1 you spend on the SunTrust Delta World Debit MasterCard. And you get miles even for making federal income tax payments. Find another card that provides that benefit – you won’t.

  • Joe

    I just found plink.com as an add on to Perkstreet for earning points. Would you know of any other websites similar to plink.com?

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  • Jordan

    Can I get miles by using the SunTrust Delta SkyMiles World Check Card to purchase GreenDot MoneyPaks?

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