Comments on: PerkStreet 5% Cash Back Opportunities – February 2012

By: SunWKim

SunWKim — Thu, 01 Jan 1970 00:00:00 +0000

It is a personal choice. Benefits like grace period is not relevant if you’re not worried about cash flow. Rotating categories are nice, but they also reward caps. You also need to redeem a specific up to a specific tier to redeem the points for cash or miles. While this is true for PerkStreet, the redemption level is at every $50 ($2500 spend if you get 2% back). If you spend on this card for groceries, another card for gas, and another card for dining… it takes much longer to receive your rewards. By focusing your spending on a single, it simplifies your life and you can achieve your reward goals that much faster.

Also, over half of Americans admit to carrying a credit card balance and have paid interest. Any rewards earned is negated by interest paid for most of credit card holders.

Debit card usage means you live within your means. That is philosophically different from what the credit card companies would like you to do.

By: SunWKim

SunWKim — Thu, 01 Jan 1970 00:00:00 +0000

Sallie Mae has a 2% cash back rewards card. You can redeem a $250 check after $12,500 of spend.

By: SunWKim

SunWKim — Thu, 01 Jan 1970 00:00:00 +0000

Swipe fee regulation (aka Dodd-Frank w/ Durbin Amendment) only apply to big banks. Big bank is defined as any bank that has $10 billion or more in assets. PerkStreet is no where close to that. This why they can offer cash back rewards on debit card purchases, as they are exempt from the new swipe fee regulations due to their size.

The recent laws is part of an effort to re-distribute power and money from the big banks to smaller financial institutions. This way, big banks have less lobby power and helps to hedge against another financial crisis by not putting all money eggs in one bank basket.

By: Daniel

Daniel — Thu, 01 Jan 1970 00:00:00 +0000

TJ, why would you use Perkstreet as your main spending account? I find that if you have more than $5k, you’d be better off having the money earn interest in an online savings account, an online money market account, or a Reward Checking Account (which as of Dec.21,2011 pays ~2.0-3.0% for upto $25k balances with e-statements, 1 ACH debit/or direct deposit, and usually 10 debit non-pin transactions..which most people use for like small change purchases), and, using your credit cards that pay anywhere from 1-5% in either cashbacks, rewards, points, miles? Plus, isnt the grace period on credit cards worth it? I feel you’re throwing away $30-50 in interest (on $5k, 1%, taxes) to earn -4%-to-+1% rewards on purchases?? It really depends on how much you spend on credit cards per year, and in which categories, and when. Your interest would be more if you have a Reward Checking Account. Isnt the combo of the Citibanks, Discovers, Chases, BankofAmericas, AmericanExpresses, CapitalOnes, and others with either the broader quarterly 5% rotating categories, or the 3%, 2%, 1% rewards in everyday purchases or groceries and gas? [[FYI, while the 2% Charles Schwab Investment credit card stopped in April 2011, cardholders still earned 2% cashback on all purchases until FIA/BankofAmerica converted and changed the cards around September-to-October 2011 to the 3-2-1 cards.]]

By: Philip

Philip — Thu, 01 Jan 1970 00:00:00 +0000

Good question. I understand the concern with not wanting to waste your time doing the banking switch for some flash in the pan company.

Here’s what PerkStreet says on their blog:

“At PerkStreet, we have no plans to increase our fees or place additional limitations on spending. In fact, the only changes we plan on making are ones that will directly benefit our customers, like introducing a savings account and rolling out new mobile apps that are already under development. We plan to continue finding new ways to give our customers even more cash back than the unlimited 2% we already offer.”

I believe them. Perkstreet’s only real offering is the debit card cash back. They’ve got to maintain that model or they will no longer have customers. They will do what it takes to keep it.

By: Jo

Jo — Thu, 01 Jan 1970 00:00:00 +0000

Phil, I would love to click on the link in your article to apply for a checking account at Perkstreet, BUT! What prevents me from doing so is the new swipe fee regulation in place now and how this will affect the decision to perhaps drop the cash back opportunity.

As it is, USAA opted to drop their debit cash back program in lieu of charging monthly fees on their checking accounts.

Any insights here?

By: TJ

TJ — Thu, 01 Jan 1970 00:00:00 +0000

Tim was incorrect – it doesn’t have to go in a brokerage account, it can go in a fidelity mysmart checking account which you can immediately transfer to your bank account, or use your fidelity debit card and get the cash at an ATM.

By: PT

PT — Thu, 01 Jan 1970 00:00:00 +0000

RB – if you need a news article, here’s one: Charles Schwab Stops Offering 2 Percent Credit Cards

Schwab killed their 2 percent back in April. Thanks so much for your accountability.

As for brokerage cards, I can’t see many regular consumers wanting one of those. Not practical.

By: RB

RB — Thu, 01 Jan 1970 00:00:00 +0000

Charles Schwab’s also credit card has also offered 2% cash back on all purchases since its inception a few years ago. I guess you can post any lie these days in a “news article” online with no editors and no accountability.

By: Tim

Tim — Thu, 01 Jan 1970 00:00:00 +0000

Actually the Fidelity Investments American Express Card has been offering 2% cash back on all purchases for years and still continues to do so to this day. The money has to go into a brokerage account, but you can withdraw it for cash whenever you want.