One of the growing trends right now is rewards checking. You can go in to a brick and mortar bank and find rewards checking accounts, or you can find rewards checking offerings online. Rewards checking can be a great banking tool, if you use it properly.
Rewards Debit Card
The most common feature of rewards checking is the debit card. Many of these checking accounts come with a debit card that can help you earn rewards. This can be a great tool for those who prefer not to use credit, but feel they are missing out on the rewards that come with a rewards credit card. It is important to understand the terms of the rewards debit card, though. Some considerations include:
- Annual Fees: Some rewards checking accounts will charge an annual fee for the debit card that earns rewards.
- Monthly Fees: Also be on the look out for monthly fees, and know why and when they are charged.
- Signature Transactions: In some cases, you won’t earn rewards unless you sign for the debit transaction, much as you would for a credit card. Issuers make more money on signature transactions than they do on PIN purchases, so some may only offer rewards if you sign for your purchase.
- Reward Limits: Double check to see if there are reward limits that come with your rewards checking account. Some programs cap your ability to earn, and others offer special incentives if you get a gift card instead of taking cash.
- Minimum Balance: Watch out for minimum balance requirements that some banks impose on their rewards checking accounts. You might not earn the same rewards when your balance is below a certain point, or you may be charged a fee when your balance drops below the minimum.
Before you sign up for a rewards checking account and debit card, make sure that it will be worth it. Look at the rewards program, and figure out whether or not the annual fee is likely to nullify any rewards you earn. (Look at best online banking reviews to help you pick the right bank beforehand.)
You can also compare your options. The Internet offers you the chance to widen your horizons when it comes to banking. There is no need to confine yourself to a local area. You can look for rewards checking at community institutions across the country, as well as compare the offerings at online banks. Be sure to shop around before making a decision to ensure that you are getting the account that works best for you, and will provide you with the best rewards.