Creditnet News Story
Greater cash back reward offered by debit card
Wednesday, June 23, 2010
By Danielle Robson
Debit cards are beefing up their cash back rewards to lure in business and edge out credit cards.
Consumers are used to having several cards to choose from when seeking cash back rewards. Historically, debit cards have offered programs with little to no comparison.
PerkStreet is gaining attention for its new Visa debit card that will reward consumers with 2 percent cash back. The catch is that cardholders must use their card at least once a month and maintain a minimum balance of $5,000 in their checking account at all times.
Consumers aren't the only ones that stand to benefit from the program. In addition to making money off the large required balance, PerkStreet can also profit from transaction fees.
"A bank like Bancorp gets about $1.30 for every $100 that customers spend on their cards when signing for their purchase," Nilson Report publisher David Robertson told the New York Times.
The amount of revenue earned from swipe fees may be less than initially planned. Proposed legislation is aimed at reducing the amount card issuers can charge merchants for accepting credit and debit card payments.
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