December 7th, 2009
PerkStreet Financial Debit Card Review
PerkStreet Financial offers consumers more than just a run-of-the-mill debit card with a unique debit card that can earn fun incentives like mp3 tunes or a Best Buy gift card just for spending the way you normally spend. PerkStreet offers the practicality of sticking to debit, the rewards program of a credit card, and the best perk of all: a $50 bonus for opening a new account. That’s free money in the bank for signing up with one of the only debit card rewards program out there.
The credit-tight economy and issuers’ expensive term changes have made consumers look to debit card, gift cards, or cash over the costly risks of credit cards. Debit cards have become especially appealing to credit-conscious consumers because they offer the same convenience of carrying a little plastic card without the hassle of credit cards’ debt, exorbitant fees, rising interest rates, and potential overspending. PerkStreet swoops into the mainstream at a perfect time to offer consumers more than a run-of-the-mill debit card, but also the ability to earn cash back bonuses, gift card benefits, coffee rewards, and music offers.
How it Works – and how to score $50!
PerkStreet works just like a typical debit card with a free online checking account to deduct your Visa debit card purchases from. Best of all, you earn 1% back on your non-PIN purchases, which is more than 10X that of an average debit card of .04% rewards. So are you a caffeine addict, music junkie, or shopaholic? PerkStreet’s unique incentives offer rewards from places like Starbucks, iTunes, and Gap. Plus, you can switch between rewards if you decide you’d like to earn free music instead of free coffee.
PerkStreet is also offering a limited time bonus offer of $50 for opening a new checking account. To qualify for the $50 bonus, you must open an account with a minimum $25 deposit and keep your account active for 3 months. This requires making a transaction on your card; whether its writing a valid check, using Online Bill Pay, or doing a withdrawal/deposit to the account. This offer is only valid for first-time PerkStreet Financial checking account customers only.
If you already have an account with PerkStreet Financial, you aren’t left out; current customers can earn a $25 bonus by doing a non-PIN purchase plus signing up for direct deposit.
More Perks
- FDIC insured and backed by the Bancorp Bank
- Nationwide network of 37,000 surcharge-free ATMs, which is more than Bank of America, Wells Fargo, US Bank, and other banks
- No minimum balance requirement, and no monthly fees as long as you keep the account active
- Free checks and free bill pay
- No hard credit inquiry however; the Plus account with overdraft protection may have a hard credit inquiry
- 24/7 customer service line
Cons
- Doesn’t build credit history; debit cards are not reported to credit bureaus, your credit report will not improve with debit card usage
- Be wary of overdraft fees and other debit card features; while the overdraft fee is $30 at PerkStreet, it lets you opt-in for it instead of automatically enroll you into overdraft protection.
- Monthly inactive fee of $4.50
Conclusion
PerkStreet’s debit card has features similar to a credit card—rewards and cash back—but it’s still not a credit card. If you want to build your good credit history, a secured credit card is the better option because you can build your credit history while still limiting and controlling your credit usage.
But if you are having issues with your credit and need a debit card alternative, or you are already a debit card user and want more out of your card, PerkStreet is worth the try. It’s perfect for a college student not ready for a credit card or a shopper who was planning to use debit for this year’s holiday shopping anyway. Best of all, you can spend as you normally do while earning extra perks, and you avoid the risk of extra fees and debt that comes with a credit card.
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There are several problems with this bank, so I would warn potential customers to be aware of the fine print. Although PerkStreet’s website has the appearance of being clear about their policies, I found that not to be the case. These “fine print” policies seem designed to (1) make it difficult to move money out of the account, and (2) to limit the cashback that you can earn. Below are examples.
(1) They have a limit of $1500 on incoming online transfers in an entire *month*! They don’t tell you about this anywhere except when you actually try to move money into your account. When I called them about it, they said that they have this restriction for new customers and I was still in my first month. After a couple more calls, I realized that they will increase this limit to $2500 after six months.
Stated reason: Security.
Suspected motive: To limit the amount of money you can spend to get cashback.
(2) They have a limit of $500 on outgoing online transfers. So, say you move $5000 into your account to get 2% cashback. You are stuck with that money with them for the rest of the month (unless you adopt a slower paper check route).
(3) They have a limit of $1500 on daily expenses and explicitly say on their website that it can be waived simply by making a phone call. I had to book two one-way international flight tickets that cost a total of over $1500. I booked these and called them to waive the limit. They refused to do so because I was still in my first month. There is no notice about waivers not being allowed in the first month anywhere. As a result, I have to now spend much more money re-booking that ticket just because PerkStreet does not allow me to spend my own money.
Stated reason: Security for new customers. They claim that all banks have spending limits on debit cards. Really? Bank of America did not.
Suspected motive: Limiting spending => limiting cashback.
(4) When I tried to circumvent the limitation in (1) above to move more money into my account using FedEx, there was another surprise! The first FedEx check takes not 1 day as stated, but about 9 days for some reason. Again, some vague security reason that is incomprehensible to rational beings is given as an explanation.
Bottomline: It is not easy to get much cashback because of their restrictive policies on what you can do with your money. And they make it harder to move money out of the account while not giving any interest on it. As for the 5% cashback, they are on such specific and tiny items that I have never been able to get 5% cashback so far.