Every time you shop, you’re likely presented with the conundrum of choosing debit or credit. After all. who carries cash anymore, anyway?
When you’re asked to decide, you might think: Do I want to get the cash back on that credit card, or is it worth it with the interest rate? Or do I want to use the cash in my bank account and save the interest? If you have the right bank account you won’t have to make these deliberations — the choice will be clear.
Here are a few of the many benefits of this kind of checking account:
Earn Cash Back
A lot of credit card programs offer you cash back as a percentage of what you spend. Some even give you points for travel rewards. But few banks give you cash back as an incentive for using your own checking account. The good news is there are accounts that allow you to earn up to 4% cash back when you make debit card transactions.While 4% may not seem like a lot, it will add up over time. And it’s certainly more than you get with most bank accounts, which offer you nothing — and usually charge you a fee for the account instead.
Pay No Monthly Fee
Most banks now charge a monthly service fee. Some waive the fee if you meet certain requirements, such as having a minimum average balance each month or making a certain number of charges. But what if you always keep a low balance in your account or you don’t make many purchases? You’re essentially paying a fee to use your own money. Finding checking accounts where you don’t have to pay a monthly fee means you don’t have to worry about meeting any special requirements. And if the account has a cash-back component, then you continue to earn rewards on everything you buy.
Free Access to Funds
A lot of banks also charge fees for other services, such as accessing your account online or writing checks. So look for checking accounts with free access to online banking, as well as mobile banking, allowing you to access your account information from any device. That way you can quickly check your balance, make transfers, or pay bills without any extra fees. You also get free e-statements, a free debit card, and can write as many checks as you like without paying a fee. Essentially, you have access to your money any way you want without paying a fee (minus buying the checks you want).
Other Options
Most savings accounts typically offer interest rates that are less than 2%. When you compare these benefits to a credit card, the choice is clear. Using a credit card actually costs you money over time. The interest rate on most credit cards is anywhere from 13% to 20%. So failing to pay off your balance in full just one month will end up costing you more than what you would make by making the same charge with the checking account.
So the next time you’re shopping and are asked “Debit or credit?” the choice should be very clear. Consider opening up an online checking account to start getting more with your money.
Photo Credit: Jesse Michelson
My Kasasa bank account card is serviced by Mastercard and can be used as a credit card. I just just choose “credit” on the merchant’s card reader, with attendant safeguards which don’t apply to debit transactions.
No “pin” is required, eliminating another vulnerability should the pin number be stolen.
To the Lloyd Blankfein of Goldman Sachs. CBS anchor woman Cindy Hsu recently got involved in dangerous coraption business with crazy CBS anchor Otis Livingston to steal money from Goldman Sachs company employees bank accounts never trust Cindy Hsu and Otis Livingston they belong in prison!!!!!!!!!!!!!!!!!
I see you posted this exact same comment on several other boards, Tom. Care to elaborate and provide evidence of your claims? I’ve found no other news that backs your accusations.
I understand you were trying to review/push the Kasasa account but your choice between debit and credit does not make sense financially. If you have the cash in your savings to make a purchase, why not use the credit card to get the rewards on the purchase and then pay the card from the savings balance?
As far as I see it, once you are using a cash back card and paying it in full before the due date there is no choice between debit or credit. Interest rates will never come into play unless you carry a balance.
My credit union has Kasasa accounts. In fact, I can get the same rewards from debit or credit. There is a catch though: most of these accounts have a limit on monthly rewards and a requirement for number of transactions. In most cases, rewards are maxed out after $200 to $300 of monthly spending and require 12 to 15 minimum transactions.
The concept is good, but the devil is in the details.