What Is a Rewards Debit Card?

A rewards debit card is a type of debit card linked to your checking account that allows you to earn rewards based on your purchases. These rewards can come in the form of cash back, points, or discounts that can be redeemed for various items such as travel, merchandise, and more. Each rewards program has its own terms and conditions, so it’s important to understand these before signing up.

What Types of Rewards Can Your Debit Card Earn?

Rewards debit cards can offer a variety of rewards, including:

• Cash Back: Earn a percentage of your spending back in cash, such as 1% on all purchases.
• Points: Accumulate points for every dollar spent, which can be redeemed for cash, travel, or gift cards.
• Discounts: Access special discounts at select retailers when using your debit card.

Which Debit Card Transactions Earn Rewards?

Not all transactions will earn rewards. Typically, the following types of transactions qualify:

• Signature-based transactions: These involve signing a sales receipt at checkout.
• PIN-based purchases: These require entering your PIN at the point of sale.

However, some transactions may not qualify for rewards, such as online subscription payments, ATM transactions, and peer-to-peer payment app transfers.

Are Rewards Debit Cards Worth It?

Rewards debit cards can be a great way to earn extra cash or points on your everyday purchases, but they come with certain conditions. Here are some pros and cons to consider:

Pros of Debit Card Rewards

• Rewards: Earn points or cash back on purchases you were planning to make anyway.
• Extra Features: Some accounts offer additional perks like ATM fee reimbursements and identity theft recovery services.

Cons of Debit Card Rewards

• Earning Limits: There may be caps on the amount of rewards you can earn.
• Eligibility Requirements: You may need to maintain a minimum balance to qualify for rewards.
• Monthly Fees: Some accounts charge fees that could offset your rewards.
• Risk of Overspending: The desire to earn rewards might lead you to spend more than you intended.

The Bottom Line

Rewards debit cards offer a convenient way to earn cash back or points on your everyday purchases. However, it’s essential to understand the terms and conditions, including any fees or eligibility requirements, to determine if a rewards debit card is right for you.

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