Reward Cards Without Using Credit? PerkStreet Debit Card Rewards
One of the things I gave up when I cut up my credit cards is credit card rewards. For me, it was well worth it, because my track history is that I haven’t always been responsible with credit cards. Now that I’ve been without credit card debt for a while, it’s possible that I could handle a credit card with rewards, but quite frankly, I’m happy being credit card-less.
RecentlyI noticed a new product on the financial market: the Perkstreet cash back debit card. Yes, that’s right. Debit card.
This is not a review, as I have not yet tried them, but I’m tempted.
The PerkStreet Basics
PerkStreet is basically an online checking account, much like CapitalOne’s 360 Checking. It’s backed by Bancorp Bank, which is FDIC insured. Unlike INGDirect, though, it sounds like PerkStreet provides you with checks, in addition to a debit card.
The main draw to PerkStreet is the debit card. Right now they’re offering new customers 2% back for debit card purchases that are run as credit (the purchases you make when you don’t enter a PIN number). After 6 months, the cash back drops to 1%. Those are pretty decent rewards for a debit card.
Confused? Basically, when you use a debit card with the VISA logo, it can be run as debit (with a PIN) or credit (without a PIN). If run as credit, the money still comes out of your checking account; it’s not a credit card. It just means the transaction is run through the VISA network, which also gives you protection against fraud with VISA’s Zero Liability Policy. If you already have a VISA debit card, you might consider running it as credit for most transactions, so you’re protected.
You can link your Perkstreet account to your local checking account to transfer money from account to account easily. In addition, you can use the STAR ATMs around the country without incurring a fee.
The fees at PerkStreet seem to be right in line with fees from other banks. And in compliance with recent legislation, overdraft protection is optional. The one fee to be aware of, though, is the $4.50 a month inactivity fee. Basically, if you don’t do anything with your account for a month, you’ll be charged the fee. So if you open an account, make sure you’re going to use it. It takes $25 to open an account, but there are no minimum balances after that.
There are several options for getting cash back. If you just want the cash, you can choose a VISA gift card. But there are other options, including Amazon, Starbucks, and iTunes gift cards.
How I’m Thinking About Using Perkstreet
I’m not a cash person. I know cash envelope budgeting is generally touted as the best way to keep your budget under control, but I like the convenience of debit cards. I don’t like walking around with a lot of cash, but if I have my grocery money in an envelope at home, it’s of no use to me when I unexpectedly come across a great sale on products I need.
So here’s what I’m thinking. I could get a PerkStreet account and link it to my regular checking account. I’ll continue paying my bills with my regular bank’s online bill pay, because that wouldn’t count as a credit transaction and wouldn’t rack up any rewards points.
But I’ll move my “cash based” budgeting categories to Perkstreet: money for groceries, clothing, entertainment, etc. And I’ll just get into the habit of running my debit card as a credit card whenever I”m shopping. It seems like a good plan to help me stick to my budget and get some “perks” along the way!
Do you have any experience with PerkStreet? I’d love to hear about it, before I decide whether or not to open an account!
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Author
By Lynnae McCoy, on Mar 23, 2010
I'm Lynnae, wife of one and stay-at-home mom of two. I'm committed to getting out of debt by being frugal with my choices in life.
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I'm just an average mom, trying to live a frugal life and get out of debt. I write about things that have (and haven't) worked to improve my family's financial situation. What works for me may or may not work for you, and you should always consult a financial advisor before making important financial decisions.
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That’s very interesting! What a great idea.
So, I’ve been looking around for a replacement for my credit card which I use for online purchases mainly–and it gives me frequent flier miles, but whatever on that–I’d take cold hard cash any day and buy my own darn plane ticket.
I’m still worried about using the debit card online. . .but maybe I’ll check these guys out and see if they have some kind of online protection. . . like the ‘generate a one time number’ dealie they have here in France.
One thing I’ve done to protect myself when using debit cards online is to open a second checking account and keep very little in it. That way, if someone tries to use my number, there’s no money in the account.
That probably wouldn’t work well with PerkStreet, because of the $4.50 monthly charge if you don’t use your account in a given month. But it works well for my local account.
Chase offers 1% of all debit card purchases and 2% on purchases like groceries. I use that and it’s pretty good.
I work for PerkStreet and I wanted to mention two things:
First for Anon NYC Girl:
I am not aware of any debit card that matches PerkStreet’s rewards at 1% back. Chase’s basic debit card product allows you to enroll in the Visa Extras program which earns you the equivalent of .2% back which means you’d have to spend $50,000 just to earn a $100 Visa Gift Card. Even Chase’s highest earning debit card product is their Leisure Rewards card and it only pays roughly half of what PerkStreet offers plus you’ll pay a $25 annual fee.
The other thing I wanted to mention is that many people don’t realize that there are a lot of companies (Verizon, AT&T, Comcast, GEICO, etc.) that let you pay bills with your debit card. This means that with PerkStreet, you’ll earn perks just for paying your bills.
Laurie McLachlan
Paypal offers 1% cash back on its debit card.
@ Bob:
A PayPal account is not a bank account which means your money is not insured by the FDIC.
The PerkStreet account is free and all deposits are FDIC insured up to $250,000. Additionally, since we offer a fully-featured checking account we provide online bill pay, free checkbooks and access to 37,000 free ATMs (more than Bank of America and Chase combined).
Also, in order to receive PayPal debit card rewards, you would need to sign up for the PayPal Premier Account which allows you to accept payments via PayPal when you sell items on eBay or via your own website. However, PayPal will charge you up to 2.9% + $.30 for the payments you process using their service.
Perkstreet is to picky in who you approve. I have read of several people who have no problem getting accounts elsewhere yet you decline us! The Paypal debit card can be used with no fees on everyday purchases & bills the funds can come right out of your linked brick and mortar bank account and you get 1 percent back with no fee! The only fees are if you use an atm or use paypal to pay like you said. Which is fine with me because id rather have my “real” established bank for deposits etc. And my money is insured plus mastercard protects my purchases!
@ Bob:
A PayPal account is not a bank account which means your money is not insured by the FDIC.
The PerkStreet account is free and all deposits are FDIC insured up to $250,000. Additionally, since we offer a fully-featured checking account we provide online bill pay, free checkbooks and access to 37,000 free ATMs (more than Bank of America and Chase combined).
Also, in order to receive PayPal debit card rewards, you would need to sign up for the PayPal Premier Account which allows you to accept payments via PayPal when you sell items on eBay or via your own website. However, PayPal will charge you up to 2.9% + $.30 for the payments you process using their service.
Laurie McLachlan
PerkStreet Financial
Laurie,
You’re missing point. Paypal’s funds come from your linked bank account which *IS* FDIC insured.
Also, a VISA gift card is not cash. So I don’t understand why you keep marketing it as cash back. If it was cash, then I could just deposit into my bank account, withdraw it from an ATM and put it in my wallet, etc.
There are some good things about Perkstreet, honesty is not one of them. Replace “cash back” with “rewards” and your tag line will be accurate.
What I’m curious about it how long it takes for the transfers between bank accts?
I used to have a USAA acct and until about a year & a half ago money I transferred was always available the next business day. Then USAA changed their procedures because of people transferring money that wasn’t in their other bank acct to begin with – all transfers took a week to complete regardless of acct history! The money always came out of my bank within 24hrs – so I’d have hundreds of dollars in limbo, where I couldn’t access it, for a week! Needless to say after experiencing that twice and getting no where with their customer service reps, I no longer do business with them. I wouldn’t want to be with out my grocery & gasoline money for 7 days.
Otherwise the cash back aspect sounds stellar – USAA used to that & it was nice to get those random little money deposits.
Yikes! That wouldn’t be good at all! I know ING says about 3 business days, but it’s usually about 2 for me. If I’m not transferring all my money, that’s acceptable to me. A week is an awfully long time though.
I’d be interested in the answer, too. Off to research! I’ll come back and post, if I learn anything.
OK, from the info on their site it looks like your money is available the first business day after an online transfer.
Maybe Laurie will come back to confirm.
I’ve been hearing so much about using credit cards for rewards but i think we’re gonna start seeing some changes. I called & ask how long do transfers take to be available & they said 2-3 days. & i ask when will i see the cash back on my account & they said on each months statements. This is GREAT since i do ALOT of activity from my debit & no rewards. I also pay my car payment with my debit (460.00) & they said that would qualify for cash back too. I did apply for an account & they said I will hear from them within 2 business days.
I work with Laurie at PerkStreet and used to bank with USAA as well. Our online transfers run through the ACH system which takes 2-3 business days to clear. Except in high risk or fraud situations, that’s all the longer we hold the funds.
Nancy- welcome to PerkStreet! Let me know if you have questions or suggestions. One of the things I think you’ll like most about our rewards program is that not only do we pay much higher rewards rates, we make it easy to redeem. Earn more, get it faster.
Just curious to know what the incoming/outgoing wire fees are especially for international. Any fees for overseas transactions(currency fees,atm,etc.)
Might have to give them a call and open an account.
Just to let everybody know, I opened my account on Wednesday the 24th and lo and behold today when I checked my mail I was surprised to see I had been sent my card. That’s the fastest service I have ever seen! Funded it with a credit card. I think this might be a keeper. Hopefully they will add more features. I am looking forward to using the card on my upcoming trip overseas and will update on the the rates I get on currency transactions. Certainly beats the 3% I was paying at Chase.
Yay! Be sure to come back and let us know how it works out for you!
Thanks, Lynnae. I think I am going to give it a try! I had no idea anything like this was even available!
Sonny-
We don’t charge a fee on incoming international wires but don’t offer outgoing international wires at this time (part of how we keep costs down to give so many perks). ACH transfers in or out of the account are free. International transactions have a fee of 1% of transaction amount for currency conversion (this is actually what we are charged) and $2.00 per ATM withdrawal for non-U.S. accounts (plus whatever the owner of the ATM charges).
I also wanted to clarify the statement about cash back- we give you two monthly statements (typical bank statement and a perks account statement). The cash back isn’t auto-redeemed as we have many customers that save up and redeem from a different partner each time. For cash we’ve partnered with a large number of popular retail brands or you can always select a Visa gift card.
Please let us know if you have other questions!
Hi Jason,
Quick question on PerkStreet. I would be one of those users that saves us my rewards and then redeem in larger chunks. Noticed on my Perks site that I am only able to redeem up to $50 at a time. If I saved up (just as an example) $500 in rewards over a period of time and I wanted a VISA gift card, would I have to get 10 x $50 gift cards? Or could I get just one card worth $500, etc.? Basically, are we able to redeem conveniently in amounts larger than $50?
Regards,
Edwin
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.
AV-
I’m the COO at PerkStreet. I’m sorry for the trouble you’ve had with your account- each of the items you’ve encountered are efforts to eliminate fraud, not to limit the amount you can earn. We’re continuing to work with our banking services partner to reduce the friction felt by customers without increasing the amount of fraud. I’d appreciate the opportunity to chat with you about how this can be better handled by customer service and use it as an opportunity to better educate our team. If you will drop me a note to jhenrichs -at- perkstreet.com, I’d appreciate your time.
As you noted in #1 / #2, the limits change as our relationship with you grows. One thing you can do to get money into your account more quickly is to initiate the transfer from your existing institution where the fact that you own the account is assured through possession of the username and password of that account.
For the daily limits you mention in #3, many banks (including BoA) have limits to prevent accounts from getting cleaned out. You can see how consistent this is across banks: http://bit.ly/C3GCt and it is an area we are working to innovate.
On your last point, the first time a check is received it is held until the funds clear before they are made available.
I hope this helps clarify the “why” things happened although it doesn’t completely alleviate the pain of the “what” happens as banks try to prevent fraud.
I look forward to touching base and getting more of your feedback.
I’m confused on the cash back part. In what form does it come? With Paypal they deposit money back into your account based on spending.
With Perkstreet? Do they mail you a check or something?
They mail you gift cards and if it’s lost in the mail your probably screwed.