PerkStreet Financial Review: A Free Debit Card with Rewards
PerkStreetFinancial Review – A Free Checking Account with a CashBack Debit MasterCard
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 Financial Debit MasterCard actually offers rewards comparable to or better than a lot of credit cards along with a FREE checking account.
The best part – the debit card offers great cash back rewards:
- Earn unlimited 1% cash back almost anywhere you use your card
- Earn 2% cash back at several popular retailers including Walmart.com and Amazon.com.
- Get 5% PowerPerks at rotating monthly categories and merchants.
PerkStreet’s cash back is definitely better than any other debit card I’ve seen.
Other PerkStreet Financial Benefits
- your first box of checks are free
- no fees for using your account
- nationwide network of 42,000 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!
Related Posts:
I am G.E. Miller, & 
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.
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
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
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.
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.
My name is Jason Henrichs and I work for PerkStreet. I’ve corresponded with AV since his experience and also worked with our customer service team to improve the information he was delivered. We are always working to improve the experience and any customer’s feedback is appreciated. We are taking action on the areas of AV’s experience that can be corrected, but there are several parts of his claim that I’d like to better explain.
Unfortunately fighting fraud is a tremendous burden that has several impacts not just for the bank but for the customers as we establish a relationship. For AV’s first point, the limit does go up over time and with the deeper relationship. There are several ways you can get money in the account besides our free online transfer- by pushing the money from the other account, setting up direct deposit or sending a check. We recognized that this would limit a new customer’s ability to meet the $5,000 threshold which is why we put in a 90 day grace period where you earn 2% no matter what. If we were looking to bait and switch to keep your balance captive we certainly wouldn’t have done that. We keep a small share of the interchange earned when a customer uses the card and give most of it back to the customer. It is in our best interest to make sure customers can spend as much as they want while balancing the fraud exposure to us and to the customer.
On the daily limit, I’ve worked with the customer service agent on how to better handle the situation and apologize that it was not a stellar experience.
For your last point on the check, it is clearly stated in FAQs what the hold times are but let’s face it, wading through FAQs is a pain so you naturally picked up the phone where the representative was not clear in her explanation. Again, I’ve worked on the education that she should have inquired whether you were a new customer because their is an extra hold time for the first 30 days.
Unfortunately banks have done little to engender trust so we’re fighting little by little to do better and earn that back. IM- I hope you’ll give us a shot. We aren’t perfect but I can assure we have many customers who love us. And I don’t know many other banks that have their COO writing a lengthy reply to an irate customer on a Saturday because he genuinely cares about making banking better.
Any customer or potential customer can contact me directly if they have questions or suggestions: jhenrichs -at- perkstreet.com
I am very impressed with the offer from Perkstreet. 2% cash back on all purchases is very appealing. The deal breaker for me though is that I am charged for ATMs not in the star network. Since “they save money from not having a brick and mortar bank to support,” I want to be able to use whatever ATM I want and get reimbursed the fees. Ally’s checking account will reimburse ALL ATM fees no matter what ATM I use. If Perkstreet makes this one change I would be willing to change.
I am a new customer of PerkStreet and so far my experience has been a good one. I too do not like the $1500 limit on transfers b/c it makes getting the $5000 into the account a bit more of a hassle but I will attempt to use the other deposit methods. I have contacted PS on at least 3 occasions and their service has been great. I live in rural OK and don’t have any ATM’s in my town and the closest one is about 35 miles so that would be my only struggle but if the rewards pan out to be what they promise I will be happy! It’s nice to see a bank take a genuine interest in their customers thoughts again (thanks PS COO for watching and replying…I’m impressed).
Tommy-
Thanks for the kind words. While I can’t fix the lack of StarSF ATM’s in rural OK (which I empathize with being from rural IL), I can promise the perks do pan out and offer some advice.
I wrote a blog post about how our perks program is different than other because it isn’t an incentive to get you to do something that benefits us more than you, it’s more like profit sharing. How much you benefit is dependent on how much you spend on your debit card. Since you are already spending on debit, that means you recognize it is better to spend the money you have rather than risking the death spiral of credit card debt. That’s smart and PerkStreet makes it rewarding. You can check out the post here: http://perk.st/wSP8
On the ATM front, many grocery stores allow you to take cash out when doing a PIN debit transaction. You don’t get perks on a PIN transaction, but it does beat driving 35 miles to avoid a fee if you buy a few small items and take out the cash you need at the same time.
Thanks for being a customer and let me know how it goes or if you have suggestions at jhenrichs “@” perkstreet.com
~Jason
COO
PerkStreet Financial
I have a PerkStreet Account. I have had great service from PerkStreet from Day one. I do think that I was a bit mislead with the term “cash back”… It does not seem as if I can do whatever I want with the so called “cash back”. I would like to just take the cash built up over the year, and put it in my acct, or add it to an IRA, etc… It seems as if you HAVE to get a “card” and spend the “cash back” you’ve earned. This to me is misleading…
Thank you Mr. Henrichs for your time, I just think the term “cash back” is not quite as true as it sounds… If I am wrong on this, please correct me. Can I get a check in the amount of the built up “cash back” just simply mailed to me? If not then I think that the term “cash back” should DEFINITELY be changed…
G-d Bless…