wise2u

found an interesting article on cnnmoney that tells whats happening with debit card reward programs. check it out: http://moremoney.blogs.money.cnn.com...-card-rewards/

I will be closing my chase accounts if they no longer allow 5 swipes a month to waive fees.

biggestbopper

Actually, does not tell what is happening, rather, predicts what might happen.

For the time being, no changes. And, any how, debit rewards have pretty much sucked compared to credit cards--weak on bonuses.

I do note that since the predicted death of credit card bonuses due to the horror of govt regulation of bank ripoffs I have gotten several hundred thousand bonus miles on credit cards, including over 150K on AA, 100K on Conti and 100K on UAL, not to mention goodly amts from Delta.

Gotta wonder if the American Bankers Assn or others of its ilk aren't planting these stories as part of the great banker's battle against the consumer--that is, us. @:-)

broadwayblue

Debit rewards cards have never been great to begin with. Perhaps I've counted them out a long time ago and am not aware of the current offers...but they used to offer a much lower rate of award accrual, typically $2 to 1 mile/point/etc. For that reason I never considered a debit card option over a $1 to 1 (or better) credit card.

GUWonder

US banks and their apologists would never ever try to scare the consumers into supporting the banks against consumers and against even the banks' (dwindling) critics in government. Never.

skywalkerLAX

I'm actually happy... my Chase account is an old WaMu Free Checking account and does not come with any fee, even if I don't have any transactions at all.

I don't find the rewards too bad. A 'Preferred CO/UA Debit Card' is 65$ a year and earns 1 Mile for every $ spent, the basic card is 25$ for 1 Miles per 2$ spent. You don't get these huge sign up bonuses but the day to day earnings on purchases are pretty much the same.

If they close the rewards program... well I just got my CO Card transferred into a United Card with 2.500 Miles Welcome Bonus. Let them close it in 2 months and refund me part of my Debit Card fee.

cordelli

I very happily get one mile per dollar on my debit card. It racks up to thousands of miles per month doing things I would have to do anyways, pay for the newspaper, oil, gas, etc.

rionio77

ALL FORMER Washington Mutual Accounts have a change in terms coming February 2011. Those accounts will not be free and will not be eligible for "monthly fee waiver" if you swipe your card 5 times.

You will qualify for a waived fee, however, if you have/do the following:

- At least one direct deposit of $500 or more. (multiple deposits less than $500 each don't qualify)

If not, you must do one of the below:

- Keep a minimum daily balance of $1,500 or more in your checking account.
- Keep an average balance of $5,000 or more in a combination of deposit accounts and/or investment accounts with Chase.
- Pay $25 or more in qualifying account fees (not including the monthly Service Fee).

Seems like they are trying to get rid of old WAMU customers.

cordelli

No, they want to get rid of any accounts that don't bring them a profit. With the change in the overdraft fees, there is little chance for them to make any money off these accounts (since they made a fortune in overdraft fees on the WAMU free accounts)

If people want to keep the account, they just need to make that one deposit a month, of which so far Paypal counts, so you can move five hundred dollars back and forth once a month.

No bank wants accounts that don't add to their bottom line, Chase is just being more aggressive in getting rid of them.

sbm12

FWIW, the huge enrollment bonuses are still alive today. I just got 25K last Wednesday and I'll get another 25K tomorrow thanks to Chase.

They were never a good deal to earn day-to-day miles/points, but the sign-up bonuses are great.

GUWonder

Actually the banks like Chase seem to be risking shedding low-profit margin accounts as well as zero-profit margin along with negative-profit margin accounts.

What is going to be interesting is to see how long it takes for the federal government to step in and tell such banks that if they wish to keep operating with access to XYZ federal government facilities (e.g., borrowing via the Federal Reserve System or otherwise "regulated" means) they will have to provide access to no-fee/readily fee-waived demand deposit/current accounts so that fewer people fall into/remain in the unbanked/underbanked category of persons. The federal government seems to want more people to participate in the formal banking sector, and such Chase-like policies foster underbanking.

cordelli

It really was not that long ago when there was hardly anything called "free checking". Certainly not at the big banks. When the "Totally Free Checking" product came out (mid to late 80's), it was a huge deal when a bank went to it. The premise was simple, you would make way more in overdraft fees and other charges on the free accounts than it cost for you to provide the accounts. Bounce a check, Fee. Deposit a bad check? Fee. etc.

When the overdraft regulations changed, there was no profit in it. Even the bank that started it all two dozen years ago has dropped it, as they said back in January:

Bill Cooper, chairman and chief executive officer of the Wayzata-based regional bank, said Thursday that new rules that limit overdraft fees will force the bank to introduce a monthly maintenance fee on more than 1 million checking accounts that previously had none. He declined to disclose the amount of the new fee, which will go into effect early this year.

"It's the end of an era," Cooper said in an interview. "We invented totally free checking and everyone copied it. It was a wonderful product. But the regulatory apparatus, misinterpreting what everyone wants, has changed that."

I don't see the government stepping in and forcing banks to offer a product guaranteed to lose money. They may step up and limit the monthly fee if they keep inching up, but not require banks to offer free checking with no strings. You will also notice the banks that still offer it aren't exactly running billboards for it anymore either.

Dieuwer

Banks can make money by borrowing for free from the FED and lending it out at high rates as mortgage loans.
Also, what's the point of having a bank account if they charge exorbitant high fees? Might as well go back to a 100% cash-based society.

littlemookie

I found that debit cards offer much less protection when problems occur (e.g. duplicate charges, fraud, etc.) since the bank itself is not paying out the money, its your money that is taken from your account. With credit cards, the first step is removing the charge and starting a investigation. The consumer almost always wins, and you don't have to worry about paying the charge or fighting for months to remove a charge. Again, this is just my opinion and from what I've seen from friends and family experiences as well as my own.

As a side note, Wamu customers typically had very low balances. I tried to find the article about it but couldn't. The Wamu model though was taking free checking accounts and then making mortgage loans. The model worked for a while, when interest rates rise again, the Fed money will be costly. You might see free checking make a comeback, especially amongst the smaller banks.

GUWonder

When non-performing assets are not as big a concern as they are today, the banks will be running ads for free checking in bigger ways than is currently the case to suck up further deposits from the unbanked/underbanked and the very customers they talk about as being a liability to the banks' EPS. Why? Because every dollar in deposits can be greatly leveraged to generate the kind of profits that lending, investment and trading activity provides bankers craving for the greatest possible profits allowed under the law.

SirFlysALot

This is happening also to my Chase checking which I have had for 25 years or so from previous acquisitions. I tried calling to see if they were really serious and got the "your call is important message" message before the fast busy. I tried two more times and then went to open a free account at a local bank which offered free checking and no fees. At least they appreciate my business. The account is only used for paying my AMEX expense account. It may hold 500 to 10,000 at any time but I am not paying Chase for the privilege.