Is Rewards Checking Right for You

Rewards checking accounts could be found at nearly any bank but not anymore. Only a few banks offer rewards checking accounts. Some banks have restricted their rewards checking accounts to new customers who are state residents. Banks make money with rewards checking accounts when customers spend a lot of money using their debit cards. Rewards checking accounts benefit savers. Spenders with low balances don’t reap the benefit. The pros of having a rewards checking account are:

1. FDIC or NCUA insured.
2. Can make purchases.
3. Can get an account with no fees or minimums.
4. Easier to obtain than a credit card.
5. Avoid finance, interest charges and late fees.
6. Multiple ways to earn points.
7. When making online purchases use your check card as a credit card to qualify for points.
8. Can use as a credit card instead of debit card for increased security protection.
9. Requirements: setup direct deposit, use online statements and/or banking, use a minimum number of times per month, login to your account at least once a month, may only earn interest on a portion of your deposit, transactions must post to your account no later than the qualification period.
10. Returning goods or canceling services treated the same as cash.
11. You don't have to carry cash, a checkbook or traveler's checks with you.

The cons of using a rewards checking account are:
1. You have to qualify.
2. Some merchants don’t require a signature for purchases under $50 or $25.
3. Using as a debit card for online purchases, paying bills or making a charitable donation may cause you to be ineligible for rewards.
4. ATM transactions may not earn rewards.
5. May require signature based transactions.
6. Interest rates may vary depending on the economy.
7. Some banks may charge a fee for using a check card as a debit card.
8. Some banks process debit charges although insufficient funds are in the account.
9. May not be accepted by some merchants unless it has a Visa or MasterCard logo.
10. May place a hold on your debit card for more than the cost of the purchase.
11. Provides less protection for purchases but you may dispute unauthorized charges or other mistakes within 60 days.

Comparison shop to find the best account for you using sites like www.money-rates.com/rewardschecking.htm.