Debit Cards 

Recommended Cards

137554676_1020770828449882_7097365234500

Introduction

I'd like to go over my cashback debit cards, what spend to put on them, what card I'd like to see that you might know about, and why I don't like to put much money into those accounts beyond what is going to be spent on the debit card. I'll also go over true debit cards vs credit/charge cards that act like a debit card, including some that act like debit cards. 

If you're anti-credit card, have a below 650 credit score, want to maximize your spending options, &/or if you're trying to get out of credit card debt, the below could be useful.

For anyone carrying an interest accruing balance on credit card(s), I typically recommend shifting entirely to debit card spending despite the fact that I have a few dozen credit cards & >95% of my typical spending is on credit cards. The interest that you typically pay on credit cards most often far exceeds any rewards that you get from them, excluding sign up bonuses, especially sign-up bonuses that are achieved after a single purchase with no minimum purchase amount (i.e. 60k AA miles after 1 purchase with no minimum within 90 days on the Barclays AAdvantage Aviator Red as of 9/14/21).

Since most of these are cash back cards, like with any cashback earning debit/credit card, it's important to note that a workaround to points earning is to purchase them, whether out of pocket or with cash back earnings directly. Points purchases are typically best done (hyperlink to my page on the subject) during promo periods and when they are available below the TPG valuation for those points. 

Applications

While it's a good idea to spread out credit card applications by a month or so at times (I've seen where 3 credit card applications submitted in <5 or <15 seconds sequentially gets the 3rd flagged as too many applications as the reason for denial; in other cases, if you can do 3 credit card applications on unique bureaus based on which bureau they're pulling from, 3 at the same time can work out well), you can immediately get multiple solid options for debit cards. Whenever doing so, be sure to check to see if you are getting a hard credit pull if 1 would negatively impact you too much. 

Sbucks 1.39.jpg
Hebrews.jpg

This debit card has some of the most lucrative options for purchase and is an example where debit card rewards can beat credit card rewards at times. This App has a number of rotating discounts available. For instance, while no longer available, for months (if not over a year) it had $1 off a purchase at a coffee shop of >$1.50 once an hr. As of 9/14/21 it has $50 off a purchase anywhere with a minimum purchase of $50 after $300 in a paycheck deposit. It also has 10% off one online order of Burger King, 10% off each order of DoorDash, 10% off 1 grocery store purchase, 10% worth of bitcoin from 1 restaurant purchase, 10% worth of Bitcoin on one coffee shop purchase, 15% off 1 order of Chick-fil-A, 15% off one order at 7-Eleven, 15% off one order of Starbucks, 15% off one order of Domino's, & more. I have also seen $1 off Sonic purchases of $1.50 or more on a day when corndogs were on sale for 50 cents each. You can use a "boost" like the discounts above after selecting them 1 at a time day of prior to use. While I believe this card is 1 of the top debit cards to get for small purchases (& these types of debit cards are significantly more lucrative than additional alternatives below for most), I also get a referral incentive if you haven't already signed up for the useful & free Cash app which I had before I found out about this card which is required to have this card. 

new coffee.jpg

 Also Venmo is using a similar rewards model as CashApp & so is Oxygen so you might want to get those as well for diversification of possible discounts. Oxygen (pictured above on 9/14/21) has the best option for a $3 fast food or coffee shop purchase with the excellent CashApp option no longer available.

Point has a $49 annual fee incurring debit card, but unless you can really maximize their bonus categories, at 1 cents per point, I don't see a compelling reason to choose it over no annual fee cards that can have better returns than Point at times like Venmo, Oxygen, and Cashapp with no annual fee.

Starbucks_edited.jpg

Starbucks Gold Card (which you can load gift cards onto) & when combined with some of their better bonus star opportunities, especially for high per purchase spending, can sometimes be better than the $ app. The biggest negative even when a particular instance appears on the surface to be better than the $ app is the 6 month points expiration policies which is not an issue with the Cash App.

GasBuddy.jpg

Gasbuddy Debit Card
The Gasbuddy Card can save you up to 25 cents a gallon, but typically my Wyndham Earner Business card earning 8 points per dollar spent on gas is going to be a better enough option for me to not spend time on this one even though I check gas prices using Gasbuddy. No credit check is required.

target.jpg

Target Red Debit Card
(not the credit card due to nearly identical value prospect & credit card # having impact whereas debit card # has no impact on new credit card applications as long as no hard pulls occur)
5% back at Target - great for Target registries & Black Friday even though I typically don't shop there
10% back at Hotels.com (meh - because max 5 bookings & does NOT count toward your reward nights where you typically get 1 night free for every 10 nights that can be combined with Rakuten. That said, some might like that it's immediate and that it won't shift before they hit 10 nights)
It's best to consider alternative portals as well, such as my favorite with OpenTable where points redeemed are worth 2 cents each (up to $80/booking) & where the points back for a night in $ can be worth more than the cost of the hotel at times. OpenTable's booking with points option tends to have a lot of glitches though, so buyer beware.

museums on us.jpg

Bank of America Debit Card & Wells Fargo Debit cards are good for some including myself (despite the requirements to avoid monthly fees which either tie up $ in the bank or tie up direct deposits - unless you have a sufficient Merrill Edge account for Bank of America or qualify through other means).

I like the Museums on Us benefit that also comes with any of Bank of America's credit or debit cards (both of which I have) & with their Merrill Edge accounts (which I also have). The top reason why my wife was once denied from a Bank of America credit card appeared to be her lack of holding onto any prior Bank of America account, so a debit card or Merrill Edge investment account could have helped her there as well.

While I don't bother to check them due to the value proposition for the time required, there are $ back deals with Wells Fargo debit cards. One of the reasons why I hold onto my Wells Fargo account is free cashier's checks in my particular account, the only bank I have with local branches with that available. Wells Fargo has the most branches of any bank in the nation. 

10 Cents per transaction cashback debit card like that with Langley Federal Credit Union if you don't have the Citi Rewards+ with plans to combine with card like Citi Premier to convert to airline transfer points (& the sign up bonus is low so with Citi's rules be sure not to get it within 2 years before the Premier or Prestige) although it is a good downgrade option for those and other cards.

This card is one that I use a lot more often than Discover, because it's much more often a better deal compared to credit cards excluding the Citi Rewards+. It's ideal with most transactions that are a dollar or less, and in some cases it's better than anything I have available for higher amounts, like $2 or even $3. What I would like to see is a card like the one with Langley Federal for 10 cents cashback per transaction that is available nationwide without people needing to belong to any organization or pay any initial fee to get into one (cheapest option with Langley I believe is $20). Langley was free for me, but won't be for most around the country. To recoup $20 would require 200 transactions, which could take years. By then, you could have the Citi Rewards+.

I like to combine this card at the time of this writing (unavailable at this time) with the 59 cent deal at Burger King for cheeseburgers to get a cheeseburger for effectively 49 cents plus tax, and it was even better when you could initially add bacon for free (though they "corrected" that & probably never intended that possibility).

If you plan to get this card, consider first the time needed to get it vs the possible return. While it might be a strong % return for low level transactions, there are banks accounts that can be opened where you meet some requirements (i.e. direct deposits at certain levels) that could get you $100's in a sign up bonus without the hassle of adding another card to take up limited space in your wallet.

For alternatives available in your state to this card (& comparable to a number of other cards in here), Doctor of Credit has a solid list, but it looks like it hasn't been updated since 2015

Discover Debit card for 1% cashback up to $3000/month. 
I use this card primarily on the rare occasion when a location (online or in-person) does not allow credit cards, or where the retailer charges an additional fee to use credit cards that is not the same for debit cards where the math makes more sense with a 1% cash back debit card. It's also a solid option for certain transactions you normally wouldn't be getting cashback on, such as when I've gotten $ back when buying stock with the debit card w no additional fee by using a debit card on Stockpile.
While my current home is one we own, when I rented for a year or so, I used this card some for rent/utility payments. While credit cards were incurring relatively high percentage-based fees, debit cards were only getting hit with a flat fee of around $4, so especially larger than required payments in advance were getting a relatively good return. If you have a credit card sign-up bonus you're chasing, high fees for using a credit card on rent can sometimes make sense as well.
Regarding rent, Bilt should be coming out soon that could be a solid alternative.

There are other cards offering uncapped 1% like TAB Bank, but it requires a minimum of 15 purchases of $5/month. For someone without credit cards, that may be more attainable than most with them.

Discover Debit_edited.jpg

American Express® Rewards Checking Debit Card - Provides 1 Amex Membership Reward per dollar spent. If you get <2 cents per point in value, like most, it doesn't make sense vs. a 1% cashback debit card. If you get 2 cents per point in value (the TPG valuation for the past few years as of 2/8/22) or more, it starts to make sense as a debit card. Considering that Amex MR can be worth >20 cents per point, if you are really maximizing value, this option can be solid. 

Novo Business Debit Card - while perks are limited in # as of 1/11/21, if you can take advantage of them, substantial savings are possible & there are no initial or recurring fees for holding the account open.

Novo.jpg
Novo no fees.jpg

You may have heard about the Delta debit card options, but since they only earn half a point per dollar, the value of Delta miles is less than 2 cents per point typically, & because of the restrictions on using them, you're better off with a 1% cashback debit card like with Discover in my opinion.

Credit Cards that act like a Debit Card

Here are cards that charge as a credit card but have the budgeting impact of a debit card with no ability to carry a balance for any duration (unlike charge cards which, if not equipped with a pay over time feature, must also be paid in full but with more time between the charge and the payment due date). Brex listed below will often be better than true debit cards above for those who don't have the time or whose time is too valuable to check the changing categories to spend on with cards like the Cash App Debit card.
 
Because these are technically credit cards, and adding new credit cards impacts your ability to get new ones, I recommend a personalized recommendation prior to getting either of these unless you are convinced that you don't want to deal with the budgeting difficulties of credit cards despite higher potential rewards. 

Brex Corporate Cash Card: Solid transferable points earning cards where the money needs to be in the account prior to you purchasing. No hard credit inquiry involved & it's a business card so won't show up on your personal credit. It also has much higher sign up bonuses than anything else on this page, i.e. 110k miles available after spending $9k within 30 days of holding the account (30k for spending $3500 & another 10k for spending $3k within 3 months) as of 9/14/21.

While the options vary depending on how you select your business category and the below bonus options aren't available on just one card, the following are some options reported by Miles to Memories,
"

  • 8x on rideshare, including Uber, Lyft, taxi, and scooter

  • 5x on flights and hotels booked through Brex Travel

  • 4x on restaurants and dining

  • 3x on recurring software like Salesforce, Zendesk, Twilio, and more

  • 3x on eligible Apple products like Mac and iPhone, via the Brex portal

  • 1x on everything else

...

You can redeem points for cash back at 1 cents each, or transfer to airline partners. Eligible partners include:

  • Aeromexico Club Premier

  • Air France/KLM Flying Blue

  • Avianca Lifemiles

  • Cathay Pacific Asia Miles

  • Emirates Skywards (Coming soon!)

  • JetBlue TrueBlue

  • Qantas Frequent Flyer

  • Singapore Airlines KrisFlyer

Transfer ratio is 1:1 for all partner airlines but we" have seen a group of 5 transfer partners with a 20% transfer promo at the same time including to Singapore Airlines, which hasn't occurred from another issuer at that level in recent history (9/14/21). The 20% also included Asia Miles, and while there was a much better option from Amex recently, it was targeted, and neither my nor my dad's accounts were targeted. Excluding that offer it was the best Asia Miles transfer bonus in recent history. We also saw an example of Avianca Lifemiles with a 25% transfer bonus from Brex.

 

Another thing I like about the Brex account is free international & domestic outgoing wires. 

Paypal Business Debit Card: 1% unlimited cashback with no annual fee & no credit check.

Zerocard: 1%-3% unlimited cashback on personal spending. It requires a credit check.

Debit Card Benefits

Alliant Debit Card for ATM fee reimbursements & relatively high-value checking account: https://www.alliantcreditunion.org/money-mentor/tired-of-paying-atm-fees-alliant-now-offers-atm-rebates
While I don't have it yet due to lack of need, an even better ATM rebate card is one that's unlimited worldwide, including this one:https://www.schwab.com/checking


The reason why I don't like to put much money into those accounts beyond what is going to be spent is that you can get better interest elsewhere. I like to put enough of a buffer where I can have free transfers from other banks (Bank of America does not offer free transfers for the account I have with it, while Wells Fargo & all of my other bank accounts and credit union accounts do) on autopilot most of the time, but primarily put savings where the intention is primarily to get interest into other accounts.

I also recommend establishing at least a small account with Synchrony Bank. After 5 years, as long as the rewards program doesn't change, it offers the following as of 8/14/22, with 6 of my favorite aspects of it being multiple separate accounts in one place, relatively high interest, unlimited ATM fee reimbursements, some credit card options issued by the bank, minimal qualifications for accounts, & up to 3 free wire transfers/month:

Synchrony Rewards.jpg