PerkStreet Financial Review: A Free Debit Card with Rewards
PerkStreetSM Financial Review – A Free Checking Account with a Visa® Debit Card
With the impending Credit Card Act looming, a large number of credit card providers are starting to charge annual fees for the use of their cards for the first time in a long time. I find this problematic, since the only reason I use credit cards for right now is for the perks that they provide, and annual fees deeply cut into that benefit.
That’s why I’ve been looking for a debit card with comparable benefits. Debit cards typically don’t offer good rewards programs, however.
But I just discovered PerkStreet Financial and I’m still trying to figure out what the catch is. It really does seem like a great deal.
What is PerkStreet Financial?
The PerkStreet FinancialSM Visa® Debit Card actually offers rewards comparable to or better than a lot of credit cards along with a FREE checking account. You get your option of the following with PerkStreet: coffee, music, or 1% cash back. I think I’d opt for the cash.
And PerkStreet’s cash back is definitely better than most debit cards. The average debit card offers .04% rewards vs. PerkStreet at 1%. 17% of debit cards offer rewards (Source: BAI/HItachi 2008 Study of Consumer Payment Preferences).
Special PerkStreet Offer
It looks like PerkStreet Financial is currently offering a special promotion of 2% cash back for the next 6 months. Additionally, you are eligible for a bonus $50 just for funding your account with $250 and making 25 transactions in the first 90 days.
Other PerkStreet Financial Benefits
- your first box of checks are free
- no fees for using your account
- nationwide network of 37,000 ATM’s (largest in the nation)
- FDIC insured up to $250,000 through a partnership with Bancorp Bank to offer financial services
- free online banking and bill pay
- no account minimums
The Drawbacks on PerkStreet
The only I could find was a $4.50 fee if your account is completely inactive for the month (which shouldn’t happen if you pay any of your bills or make any charges with your card). Standard overdraft charges apply ($30), less than most banks.
PerkStreet Financial definitely seems like it’s a great alternative to credit cards!
Whenever I think of debit card purchases I think of PIN based purchases. But the reward part of the card only applies to non-PIN purchases, as in you basically tell the cashier you are using a credit card, not a debit card. If you tell then it’s a debit card, you’ll end up entering a PIN, which won’t count as a reward eligible purchase.
@ Brian – you are absolutely correct. I always use non-pin on my purchases on my debit card. That’s basically how Perkstreet makes their money – from a kickback on the Visa transaction. Seems like a win-win for the company and user.
So I’m a bit confused, is this a credit card or debit card?
@ Robert – It’s a debit card. Debit cards draw money from your checking account. Credit cards use money you don’t have. If used without a pin for the debit card, both are using Visa to process the transaction.
@Robert: You’re not the only one that’s confused by this. We offer a Visa debit card so you are never borrowing money, even if you select ‘credit’ at the register.
In choosing the credit option, you’re really choosing to have your transaction processed over Visa’s network. Making this choice also means you’re protecting your card from fraud since your PerkStreet debit card is protected by Visa’s Zero Liability policy.
Other types of non-PIN transactions include:
* Any purchase that you sign for
* Any purchase where you swipe your card and don’t enter your PIN
* Purchases made on the internet
* Phone and mail order purchases
A good rule of thumb is a pretty straight forward one: if you make a purchase with your debit card and you don’t enter your PIN to complete the purchase, you will be earning perks on that transaction.
I hope this information helps and I’m glad you are considering making the move to PerkStreet.
Laurie McLachlan
PerkStreet Financial
Would the $4.50 inactivity fee be avoided if I setup an automatic money transfer every month into the checking account?
And can this money transfer be setup on PerkStreet? (I believe the service is called “e-money mover”)
“Seems like a win-win for the company and user.” I disagree with this statement: sure, you get cash back, and PerkStreet gets a fee, but this extra money has to come from somewhere. The merchant ends up paying that fee, which will tend to push the prices offered by that merchant up by the extra amount that he or she has to pay. So in the end, instead of paying $30 for an ink cartridge and saving $1 for a coffee in the afternoon, we all end up paying $31 and getting $0.50 “cash back” (and PerkStreet earns $0.50). This is a definite lose-win situation, even if very indirectly. For anything under $100, I always pay in cash: it’s my little personal way of fighting against this corrosive evil.
The best alternative would be for merchants to offer “cash discounts” for paying in cash instead of by debit / credit card, so you could *really* see how much less the “cash back” you get is, compared to the resulting price increase. My understanding, though, is that that’s illegal. It would be great if CARD v2.0 changed this.
@ Patrick. I disagree. Credit purchases are not an emerging trend. The largest percentage of purchases are already made with credit versus cash – so you can bet that merchants have already factored this into their pricing. You assume that they haven’t. I don’t see our society reversing the trend and going back to actual monetary exchange versus credit at this point. As we move more towards e-commerce this will be even more exaggerated. So when you pay with cash, you’re paying for the increased price. You might as well get your cut back. Would it be great if merchants offered a discount for cash purchases? Absolutely. But how many actually do?
@ G.E. Miller. I understand your point: given that everyone uses credit and merchants aren’t differentiating between credit and cash/PIN-debit, then it makes sense to get the cash back. And paying with credit cards does make sense for certain purchases, like flights or furniture, which are too large for cash or have some kind of trust barrier that makes liability protection worthwhile. But for many purchases we make every day, it’s makes little sense to pay by credit, since the fee attached is bigger than the cash back: on top of that, feeling that you’re gaining something by paying with credit simply adds insult to injury.
I decided to read up a bit on cash discounts, and it turns out they are not illegal; what’s illegal is for surcharges to be imposed on credit card users. Here’s an interesting article on the topic:
http://nudges.wordpress.com/2008/08/07/an-old-framing-classic-is-back-cash-discounts-and-credit-surcharges/
The idea is that, although economically, both mechanisms are equivalent, psychologically it’s much easier to forgo the cash discount than to feel the pain of paying an extra cost.
So to turn the issue on its head and to be constructive, how about the following: next time you’re at a local merchant, simply ask them straight up for a cash discount if you pay by cash/check instead of credit (or a smaller discount for a PIN transaction), even if they don’t offer it explicitly. It’s perfectly legal, and in their interest, to agree. If they do, then you’ll end up with more money than whatever cash back you might get through the card. If they don’t agree, then they’re being thick, so by all means, hand them the highest fee AMEX in your pocket (it’s illegal to discriminate *between* credit cards) and recover some of the cost through cash back.
By the way, I’ve only recently started following your blog, and it’s quickly become one of my favorite sites. Keep up the great work!
@ Patrick – you make some great points. It certainly doesn’t hurt to ask the merchant. But if they say no – charge away. =)
Thanks for your comments and following the blog. Glad to have you around.
It seems to be a good deal and if it a pin-less debit card then the things are easy as you do not have to remember the pin and other associated problems. But if it is pin-less debit card, the problem I find is the insecurity, if I lose it whatever money is there in my account is at risk.
Though I agree there is a never ending debate whether to use debit card or a credit card. Because at the month end when one does not have money and they wait for their salary and at that time no debit card could replace credit card.
So those people who have a good bank balance and they do not want to pay the fee, for them it is surely good. But people who only rely on their monthly income and it finishes to pay off the last month credit card bill then debit card would not be a good option until and unless one gets one month salary in advance.
Just read an interesting NY Times article on the subject of merchant fees on debit / credit cards. The most striking figure is the National Retail Federation’s estimate of these fees costing households an average of $427 in 2008. Tasty food for thought:
http://www.nytimes.com/2010/01/05/your-money/credit-and-debit-cards/05visa.html?em
I’ve only been with PerkStreet for a couple of weeks, and frankly I am undewhelmed so far.
It took about a week for them to open the account, which I guess is no big deal. What bothers me more is the extremely slow ACH processing time, and the fact that their site is slightly misleading.
On the customer side of the site (once you’re logged in), there’s a link for first-time users of their “e-money mover,” or some such thing. In that link it mentions that transferring money from a credit or debit card is the fastest way to transfer money into the account. So that’s what I did. I initiated a $500.00 transfer from a debit card. That was on, I believe, Monday. Today is Friday, and the transfer is still “processing.” Oh, and they charged me $12.50 for the speedy service.
By comparison, when I transfer money into my Credit Union account by standard ACH, it’s always there within 24 hours — at the most.
I did call PerkStreet and spoke to a lady who explained that debit card transfers go down as ACH transfers, and take between three and five days to process. So what’s the advantage? And why does the site say that a card transfer is the fastest way to transfer money into the account if it’s no faster than an ACH transfer?
True, I can avoid the fee by just running an ACH, which is free. What annoys me isn’t the fee itself. I would have been willing to pay it in return for speed. It’s that I got nothing in return for that fee. And frankly, even for a free ACH transfer, three to five days is way slow.
I’ll give them a few months to see if things get any better. It’s a new account, so maybe there are some security-related issues compliments of Big Brother. But if every transfer I do is going to take three to five days to process, I won’t be banking with PerkStreet for very long.
-Richard
Richard- I would be interested on how things turn out. I’ve been looking into using their service also however if it really does take that long then it really wouldn’t work for me.
Since this issue is dear to my heart, I was very happy to read the following article on the vote in the House to limit the amount of fees that debit cards can charge. Cheers to the authentic “cash back”: lower costs for merchants and lower prices for *all* consumers!
http://www.nytimes.com/2010/05/15/business/15credit.html?hp
Well, I called back again yesterday (Friday) and expressed my concerns again.
Firstly, I must correct myself. I initiated the transfer on Tuesday, not Monday. By yesterday morning, it still was shown as “processing,” but it was queued for last night’s batch and is in my account today.
The lady I spoke to yesterday explained that incoming ACH transfers are actually batched at the end of a business day, so the processing time didn’t actually start until Wednesday. Okay, I understand batch processing, so I can accept that. So it actually took three days (Wednesday, Thursday, and most of Friday) for the deposit to be processed. It was available late Friday night.
Had I initiated the transfer on Wednesday, my understanding is that it wouldn’t have been available until Monday at the earliest, as Saturday and Sunday are not business days.
The question that was not answered was why does PerkStreet’s customer site say that using a card is the fastest way to add money to an account? It’s not. And the fact that there’s a fee associated with the card transfer means you’re paying for nothing. An ACH would take exactly as long and would be free.
The lady explained that transferring from a card makes sense for people who can’t push an ACH (for example, if they’re transferring money from a credit card, rather than a debit card associated with a checking account). Fine, I said, then that’s what the site should say, not that it’s any faster than any pther method. But obviously, the CSR has nothing to do with what the site says.
I should mention that the CSRs at PerkStreet are pleasant, knowledgeable, and helpful, and that there’s almost no wait time to talk to them.
Back to the ACH processing lag, in fairness, a three-day ACH processing time is not unheard of. My credit union is much faster (usually one day), but they’re exceptional. The brick-and-mortar bank I used to deal with also took three days.
So I dunno. The cash back from PerkStreet is generous, and I guess I can deal with the three-day processing time as long as I know about it. The misleading language on the site bothers me, but that also could be inadvertent. I’m a Web designer, and sometimes things are written based on policies that wind up changing later, but no one tells the designer.
So for the time being, I’ll keep the account, knowing that ACH transfers will be slow and planning accordingly. And again, PerkStreet is no slower than most other banks. They all like to hold your money for as long as they can before making it available to you. Finally, the rewards are generous, and the customer service is very good. So all in all, they’re no worse than other banks, and probably better than most.
But if fast processing of your ACH transfers is important for you, then look elsewhere.
-Richard
I was rather disappointed with them. I read many good reviews about them and was hoping to have a good experience as well.
Their website clearly states that if you fund your account using your credit card, you would not get charged cash advanced fees. Well that ended up not being true. I was charged by my credit card company cash advance fees. PSF says that they run the charge as a “point of sale” but my credit card company still recognizes them as a financial institution. I asked for help from 3 different agents and each one were of no help. The first one I spoke with was the worst while the other 2 at least tried to look into the situation. I was pretty much left with an “oh well” response.
Based off of this experience, I’m going to close my account once the other pending charges hit.
Credit Card
Make a transfer from your credit card to your account without incurring cash advance fees.
Initial deposits are limited to $500 and can be completed when you use the online application or log in to your account for the first time.
There are 2 ways to add additional funds by credit card,
1. Use our online E-Money Mover service; or
2. Call customer service at 866.792.2834 and ask to fund your account with a credit card. Please have the following information available:
* Your Credit Card with your account number, CVV number, and the expiration date on the card
* The Cardholder Name
* The Billing Address
At this time we accept the following cards: VISA® and MasterCard®.
I like things about PS but there is a significant problem for me. Their online banking is clearly two or three versions behind everyone else. For example,PNC and most others,show card transactions almost instantly “as processing”. They stay there until the charge comes through. So, at any point it is very easy to tell what is posted, processing, etc and derive a balance. With PS you have no clue until the final charge posts. Now awful but not convenient.
I also miss any other services – savings, overdraft prot, etc. It is really basic.
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