Pay more, get more debit rewards

Debit cards continue to be the card of choice for many consumers when it's time to pay for purchases. The lure of rewards, such as cash back or airline miles, is no doubt responsible for much of that trend, but perhaps consumers also appreciate not receiving a fat credit card bill at the end of the month.

For Bankrate's Fall 2007 Debit Card Study, we surveyed the five largest banks and the five largest savings institutions in the nation's top 10 metropolitan areas.

What Bankrate surveyed
  • Annual fees charged simply to use the debit card.
  • Point-of-sale fees for signature or PIN-based transactions at the cash register.
  • Whether the card offers a rewards program.
  • Type of rewards offered.
  • Annual fee for enrolling in a rewards program.

Among the changes since our previous debit card study was released in the spring is that one of the two banks that charged an annual fee just for having the debit card has dropped its fee. Bank of the West in San Francisco has dropped its $1-per-month fee that was charged any month in which the card was used. Firstrust Savings Bank in Philadelphia continues to charge $24 annually for the privilege of using its card. It now is the sole institution in our survey that charges such a fee.


And none of the 100 institutions surveyed charges a point-of-sale fee when the customer signs for the purchase. Wells Fargo in Los Angeles and San Francisco dropped its $1-per-month charge that it imposed on signature purchases during our last survey.

Customers who prefer to use their PINs when shopping have often been discriminated against by card issuers, who make less money on PIN-based transactions due to the interchange fee structure. Most issuers require signature-based transactions if purchases are to qualify for rewards. In other words, they want you to select "credit" instead of "debit" when using the debit card. Additionally, some issuers, albeit fewer and fewer, try to discourage PIN use by imposing a fee.

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