Find more rewards with debit cards

Since the credit crises more Americans are deleting their credit card application. The usage of the debit cards and cash increased the last months.

The last several years, the traditional reward programs offered on a credit card have been on the decline. At the moment banks are offering similar rewards programs on the debit cards because they need the revenue. Banks are not longer allowed to collect excessive fees for things like overdrafts, so they are looking for new opportunities. Banks have a good chance of successful cross-promotion of other goods including savings accounts and loans because the cards are linked directly to a checking account.

If we look at generating revenue from a debit card incentive program we see it is not easy and definitely not cheap. If we compare the 2, you have on the debit side up to $25 for reward program members each year when you look at the costs. A similar credit card is around $30 per member each year. But the banks need to maintain the consumer interest if they want to keep the people away from the credit card.

What to expect now? With the debit card rewards you earn points it you spend 1 or 2 dollars, if we look at today many banks are creating such initiatives for the credit card. Members can earn 3-4 points for each dollar spent. With the points you can obtain cash or another reward item. You can earn by everyday banking procedures and e.g. a new account for extra points. Many banks have contracts with retailers and today you can earn special discounts or exclusive rewards at your local locations. It’s the same story in each bank; if you use the debit card frequently you obtain more rewards.

I think if you are a regular debit card user, it’s recommended to check out what the incentive programs mean for you personally. You can find special offers or you see you made a bad choice. That’s very important because you have the difference between older and younger people.

One advice: check how you can earn more cash with your debit card especially with the points for the daily bank procedures.

By Karen Mechelinck - 2 FV 4

Source: http://www.americanconsumernews.com/2010/01/find-more-rewards-with-debit-cards.html - 27th, 2010