Today Bankrate released the results of our first-ever survey of debit card rewards programs. The 40 programs available through larger banks and credit unions varied in terms of restrictions and payout, but most offer fee-free rewards with no cap on the amount you can earn.
Signature-based transactions generate more interchange revenue for the card issuer than PIN-based transactions, so many debit card rewards programs only pay if you sign when you swipe. A dozen cards in our survey pay out for PIN-based purchases, offering a return anywhere from 0.1 percent to 0.5 percent of the purchase. Signature-based transactions command a return ranging from 0.2 percent to 3 percent.
Some cards offered higher payouts on transactions in certain categories, such as travel or everyday purchases. For example, the Bank of America US Airways reward card awards double miles for US Airways purchases.
Watch out for fees, expiration
Rewards have a shelf life of five years or less in many of the programs sampled by Bankrate.com. Unused rewards expire after two years for 7.5 percent of the programs, after three years for 32.5 percent of the programs, and after five years in 10 percent of the programs.
While most programs don't charge annual fees, the ones that do charge anywhere from $12 to $55. Fee-free cards probably make more sense for most folks, unless you'd spend enough to offset the fee in rewards.
Would you sign up for a rewards debit card?
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