Many banks offer debit card rewards to promote the use of debit cards. Most debit card rewards involve the card holders getting points on transactions using the debit card. Some customers prefer debit cards to avoid the fat monthly bills created through the use of a credit card. Most debit card rewards have been designed using the pattern of credit card loyalty programs. Some debit card issuers also use a segmented debit rewards program.
According to a survey by First Data Corporation in 2008, 27% of the consumers were benefiting from debit card rewards program as opposed to 76% of credit card users. The survey also concluded that maximum debit card users rated cash back as the most favorable reward.
Debit Card Rewards: Cost
If you want to take advantage of a debit card rewards program, you might need to go that extra mile by doing more than just purchasing. For better benefits, you would also have to pay an annual fee. Typically, airline miles carry some restrictions and you may be left with unused miles. Before you apply for a debit card rewards program, keep in mind the ways in which you can use these points.
Types of Debit Card Reward Programs
The following are the main types of debit card reward programs:
- Keep the Change: Under this reward program, whenever the debit card holder makes a purchase, the issuer rounds it to the nearest whole figure. The difference gets transferred to the account holders’ savings account from his/her checking account. This can continue for three consecutive months. After that, the issuer will keep on contributing 5% on a yearly basis and the cardholder will get the reward annually in his/her savings account.
- Air Mile Points: One can get a debit card that pays out air mile points. You can earn air mile points on your purchases during air travel. Some debit card issuers might require you to have a balance amount in the account to take advantage of this program.
- Cash Back Points: If one does not meet the criteria of a cash-back credit card, s/he can opt for a cash-back debit card. By using this card, you will be eligible for cash back rewards on certain products and services. Some such cash back rewards include residential incentives, business incentives and renewable energy incentives.
- Cash Back Points: If one does not meet the criteria of a cash-back credit card, s/he can opt for a cash-back debit card. By using this card, you will be eligible for cash back rewards on certain products and services. Some such cash back rewards include residential incentives, business incentives and renewable energy incentives.
It is important to know that the annual fee is not applicable on all rewards programs. According to industry analysts, a lot of improvement is taking place with the introduction of better reward programs. Therefore, one should opt a debit card with 0% APR.