There’s a new rewards debit card in town!
It’s good news for those who absolutely refuse to use use credit cards: A new company, PerkStreet Financial, offers a free online checking account that pays users one percent cash rewards on all non-PIN debit card purchases. (Even better, you’ll earn two percent cash back for the first six months).
What is PerkStreet?
PerkStreet Financial has partnered with the Bancorp Bank to offer a free online FDIC-insured checking account, similar to ING Electric Orange and others. It works just like any other checking account—you can:
- Write checks
- Use a debit card against the account
- Withdraw cash via a nationwide network of free ATMs
- Make electronic or mail-in deposits
You just won’t find a branch on your nearest street corner!
What Makes PerkStreet Unique?
Although some other online checking accounts pay interest (usually far less than one percent); PerkStreet offers a one percent cash back rewards debit card; that’s ten times the rewards the average debit card offers*. Just like rewards credit cards, PerkStreet users collect rewards as they spend that can be redeemed as cash back or for free coffee and music. PerkStreet also has no minimum balance requirement and will send you free checks.
Is It Really Free?
As with other checking accounts, PerkStreet may charge you a fee if you bounce a check, overdraw your account, or use a non-network ATM. Also, if you don’t use your account at least once a month, you’ll be charged a $4.95 monthly inactivity fee. But the account remains free as long as you make at least one deposit, debit card purchase, or ATM withdrawal each month.
PerkStreet does not charge any of the fees that many pre-paid debit cards charge (everything from monthly fees to per-transaction fees). And, since its a rewards debit card, not a credit card, you’ll never pay interest or risk going into debt.
But I Already Have a Checking Account and/or Rewards Credit Card
In my opinion, PerkStreet is a perfect compliment to a local checking account. If you already have direct deposit and online bill pay set up with one checking account, you can open a PerkStreet account and transfer money once a month that you designate as spending money. You’ll have an easy way to budget for discretionary expenses, and you’ll earn rewards as you do it.
If you’re already happily using a rewards credit card (and paying the balance in full each month), you might not be interested in PerkStreet. But their rewards debit card is absolutely perfect for anybody who chooses to live credit-free or can’t get approved for a credit card at the moment.
How Do I Sign Up?
Getting started is easy at PerkStreet.com.
- It takes $25 and about five minutes.
- You’ll receive free checks and your debit card in the mail.
- Get 2% cash back for the first six months, 1% thereafter.
*The average debit card offers .04% rewards vs. PerkStreet at 1%. 17% of debit cards offer rewards (Source: BAI/HItachi 2008 Study of Consumer Payment Preferences). Of debit cards that offer rewards, the average value provided is 0.23% of spending (Source: Survey of the top 10 bank holding companies by total domestic deposits, as ranked by the FDIC). The resultant value provided by the average debit card is 0.04% of spending compared to PerkStreet at 1%.