chipcollector

Hello:

Have a new interest bearing checking account that requires a minimum DEBIT CARD spend each month of several hundred dollars.

Problem is that If I use their debit card for organic purchases, I give up the 2.5% - 5.0% rewards associated with my credit cards.

Since this is not a one shot thing, but a monthly requirement, I thought I would ask the experts here what they recommend,

I know that the obvious choice is the purchase of money orders but I'm not sure how this will go over every month with the bank should they bother to look.

Looking for non-conventional ideas where I could use a legit debit card with a chip and where a credit card would not be accepted.

TIA !

jumbotron_

I don't think the bank can tell you purchased a money order. Wouldn't it just show up as a regular purchase?

chipcollector

Hi:

Thanks for the reply. I believe there, in fact, may be a way to see what was purchased. I recall some discussion in this regard.

Just trying to avoid a potentially unpleasant discussion with a new banking relationship.

just_jim

Some banks allow you to pay your credit card bill with a debit card. Sometimes it needs to be a debit card with the same bank, and often you need to call in or use one of their ATMs, That might be your best course.

Could you use your debit card for mortgage or rent payments, or for car payments?
It wouldn't work for every month, but my property tax has a 2.35% processing fee vs. $3.50 for debit card. If that's the same for you it would reduce the cost of giving up the rewards.
If you have estimated tax payments, (and if you don't you can adjust withholding so that you will have) you can make 2 payments per quarter by debit card at a cost of $2.20 per payment instead of 1.85% to 1.98%.

I hope one or more of these suggestions work for you.

chipcollector

I will definitely look into paying credit card bill with debit card.
Navy Fed will allow you to transfer money to your account with a debit card (up to $250) but it shows up as a "transfer" not a purchase.
Hopefully, the credit card payments show up differently.
I do have estimated taxes. I pay with a credit card that gives me 2.5% cash back, so this will not work.
Might look into Plastiq for rent payment.
THANKS!

radonc1

Have you done the math on all of these accounts.
What is your interest bearing checking account actually earning you. My interest bearing checking account pays me 0.01% interest which comes out to pennies each month. Would it be better to just get a regular no fee checking account without the burden of having to use a debit card for purchases and not earn miniscule interest on your checking account?

How much money are you losing if you transfer, for example $200/month from your 2% CB credit card to your debit card. That is a total of.....$4. Are the benefits you derive from losing that $4 worth from the credit card earn worth the free checking account with associated goodies you gain by using the DC. (I assume it also has other benefits besides being free)

Finally, if you don't like using the DC, ask them to modify the terms, maybe instead of amount spent each month, how about frequency (use it 5 times a month). Or seek a bank that gives free checking with a direct deposit. So many different options are out there.

If you don't like their answers, seek out another bank. It is a very competitive environment out there currently. But don't box yourself in with crappy bank terms

chipcollector

I apologize in that I was not more specific.

The checking account that requires the debit transactions is a Rewards Checking Account that pays just under 5% interest.

radonc1

This is pretty simple.
If you keep a balance of $200 in your 5% checking account, you get $0.82/month and with a 2% cash back credit card , that $200 gets you $0.33/month. So you earn about fifty cents a month more to use the checking account rather than the 2% cashback card.

To me, this is a super checking account. My above calculations are based on keeping only $200 in the checking account. If we make the average daily balance $1000, then you are earning $4.11/month for your 33 cent cost for a 2% card and 83 cents for a 5% card when moving that $200 to your debit card. A no brainer!!

Keep the checking account but i suspect that you are getting a time limited deal that will pay you far less after a certain period of time or limits the amount you can keep in your checking account.

Calcs: 2% cash back, 0.02/365 days x $200 x 30 days = $0.32/month
Assume that bank pays on a daily basis (unlikely) and for 30 days. Many will pay on 360 day basis (30 days /mo x 12 months) which makes payout a penny more

chipcollector

Actually, the checking account has a $10,000 balance and pays 5%

radonc1

For a measly $200 or 82 cents a month, you get to earn more than $40/mo.

I wouldn't do anything to to mess this deal up until they change the terms of the deal.

diburning

Now, let me ask you this:

Do they require this spend to be done without a pin (which would make sense because they would earn more on the interchange fee) or with a pin (less likely but still possible).

If it's done without a pin, then buy gift cards or something. Something/somewhere that you use reguarly. Perhaps Amazon? Gas? Grocery store? Make an additional purchase on top so that the gift cards aren't the only thing that you're buying.

If it's done with a pin, they can't tell what you bought. Level 3 data is not typically handled over the debit network. You can probably buy money orders with it and they wouldn't know. If you really want to hide the fact, make sure to buy the money order for a really odd amount.

chipcollector

To my knowledge the use of a PIN is not required by the bank. It's whatever a merchant might require.

radonc1

Sure, the above is certainly a possibility.

But let's be honest. Is the efforts to gain pennies a month worth even a vague risk of what has to be an incredible deal for what I presume is an active checking account. I use my active checking account to pay multiple bills, which is what I presume would be done with this account. The only difference between the two is that this account gets 5% on the average daily balance and I get .01% but I don't have to do $200/month in debit charges (which can be met with a single DC payment !!). If I had such a deal, I would do nothing to screw with it..
One needs to keep a close eye on these deals. Banks change the rules all the time and that includes percentage rates.

diburning

The orignal poster asked for creative purchases. That is what I included in my answer.

chipcollector

I truly appreciate ALL responses. !!!!