One of the ways that some banks are trying to lure customers is by beefing up their checking account offerings. Rewards checking accounts are becoming more common, including high yield checking accounts that offer a fairly high rate of return. While any return isn’t going to be particularly attractive right now, earning something on your checking account is better than nothing.
It is important to be careful, though, when you consider high yield checking accounts. Many come with regular monthly fees, and you will likely need to maintain a minimum balance. In some cases you might have to keep at least $1,500 in your account in order to earn the high rate of return and avoid some of the fees that can come with the account. You might also be limited as to the number of checks you can write.
Rewards Debit Cards
Some rewards checking accounts come with rewards debit cards. These cards work like normal debit cards, but they allow you to earn rewards. In many cases, the rewards are in the form of cash back. You can also use points to be redeemed for discounts at restaurants and local attractions.
Rewards debit cards can be attractive because they combine the attractive features of credit cards (convenience of plastic, rewards programs) with the fact that you aren’t borrowing money, as you do when you use credit cards. This allows people to earn rewards for swiping the debit card, without having to worry about the debt attached to credit cards.
Of course, it is important to remember that there are also requirements associated with rewards debit cards as well. Make sure you understand the terms and conditions that come with your rewards debit cards. In many cases, there is an annual fee for a rewards debit card, so you want to make sure that the rewards you earn offset the yearly fee you will pay.
For many people, high yield checking and rewards debit cards make a winning combination. Be sure you understand all of the implications, and terms of the account, before you sign on.