While using a debit card can be convenient, especially if you're worried about ending up in debt, you’re missing out on lucrative credit card rewards if you frequently swipe your debit card instead of using credit.
It is possible to earn cash back on a debit card purchase so you can get the best of both worlds — rewards points without worrying about paying interest. Unfortunately, debit card rewards programs aren't very common and usually aren't very generous.
Debit card rewards programs used to be much more prevalent and offered a better bang-for-your buck in the past, when there were fewer regulations and banks could charge merchants larger fees for debit card purchases. But the Dodd-Frank Wall Street Reform and Consumer Protection Act put a cap on those fees and many of the best banks responded by discontinuing their programs or scaling down rewards offered after the reforms went into effect in 2010.
While it's still possible to find rewards debit cards that provide points or cash back, you're likely better off with a rewards credit card — as long as you can control your spending and make sure you pay your bill on time.
4 options to earn cash back on a debit card
1. Discover Cashback Debit Card
Discover's cashback debit card can be used anywhere Discover cards are accepted and provides 1% cash back on up to $3,000 in purchases made with your card each month.
That translates to a maximum of $30 in monthly rewards, which is automatically deposited in a Discover savings account each month.
Your debit card can also be used to access more than 60,000 ATMs throughout the United States with no fees — but there's no cash back provided for money withdrawn from an ATM.
To start using your Discover debit card to earn cash back, you'll first need to sign up for a Discover online banking account. You can do this right online at Discover.com.
The account truly aims to provide fee-free banking, with no monthly maintenance charges, no fees for standard checks, online bill pay at no cost, and no charge for stop payment orders, insufficient funds, or closing your account. If you lose your debit card, Discover even provides you with a replacement for free with expedited delivery.
A fee-free checking account plus the chance to earn cash back with a large spending limit makes Discover's debit card cash back program one of the best available.
2. Bank of America Debit Card
Bank of America's debit card rewards work differently than other cash back rewards programs on this list. With the BoA card, you earn cash back only on special deals that you pay for with your Bank of America debit card or credit card.
To be eligible to earn cash back through BankAmeriDeals, you need to sign into your online bank account or use your mobile app. After signing in, check out the available deals and activate the ones you're interested in — then pay for qualifying items with your debit card to earn cash back, which will be automatically credited back to your account.
Once you've completed a deal, you'll also be eligible for BankAmeriDeals Coins. For every four coins you earn, you'll collect $5. And after you start earning, you can move up to higher levels to earn even more.
At the top of your deals page after logging in, you'll see your progress as well as your current and potential earnings.
Anyone with a Bank of America checking account can take advantage of AmeriDeals, so just sign into your account and click "View all Cash Back Deals." Other terms and conditions of your account, including monthly fees and ATM access, will vary depending which BOA account you choose.
While you don't have the flexibility to earn cash back on any purchase that other cards on this list provide, the chance to take advantage of these deals that provide cash back can be attractive for existing BOA customers.
3. Axos Cashback Checking
Axos provides up to 1% cash back on all signature transactions made with your debit card. To score 1% back though, you'll need to maintain at least a $1,500 average daily balance. If you can't maintain this average balance, your cash back for the month will be just 0.50%.
With the Axos debit card, you can get a maximum of $2,000 in cash back each month. You can earn this cash back if you have a debit card linked to an FDIC-insured Rewards checking account.
This rewards checking account also comes with unlimited reimbursements for ATM fees at any domestic ATMS and there's no overdraft or insufficient fund fees charged with your account. Account holders also benefit from up to 1.25% APY* depending on your balance and how often you use your debit card, and will owe no monthly maintenance fees.
And while you'll need at least $50 to open an account, there's no monthly minimum balance requirement once your account is open. Still, because you need a high balance to earn the maximum 1% cash back for debit card purchases, this account is the best choice only for those who tend to keep a large sum of cash in their account.
*As of December 13, 2019
4. American Express Serve Cash Back Prepaid Debit Card
American Express Serve Cash Back is not a traditional debit card, but instead is a prepaid debit card that provides 1% back on all purchases with no limits.
The Amex card is different because you can spend only up to the amount you load onto your Serve card. But there are numerous free ways to transfer money to your account, including direct deposit and transfers from a bank account.
This card isn’t perfect, though. Adding cash to your card at a retailer comes at a cost of up to $3.95 per transaction, depending which store you choose. In most states, you'll also have to pay a $7.95 monthly fee for the Serve Cash Back card.
If you can't open a traditional bank account or don't want to, the Amex Serve Cash Back might be a good option for you. But the monthly fees and costs associated with adding cash to your account can be expensive, so many may prefer other alternatives on this list.
4 top credit cards to use for cash back
While it is possible to get cashback with a debit card, you're usually limited to getting just a small percentage back on a finite number of purchases per month.
If you want to maximize the rewards you earn for spending, you're likely far better off with a cashback credit card instead. Many of these cards offer more than 1% back — at least on some purchase categories — and don't limit your rewards on just a few thousand dollars in monthly spending. You'll also have way more choices when it comes to cashback credit cards, so you should be able to find a card well suited to your spending style.
Credit cards typically also come with other benefits that debit cards don’t offer, including better fraud protections, travel or shopping perks, sign-up bonuses for new cardmembers, and the chance to improve your credit score through responsible repayment.
If you're open to using a credit card to get more cash back, some of your best options include the following.
|Chase Freedom Flex||Discover it Cash Back||Bank of America Cash Rewards||Citi Double Cash Card|
|Rewards rate||up to 5% cash back||up to 5% cash back||up to 3% cash back||up to 2% cash back|
|Welcome offer||Earn $200 cash back after spending $500 on purchases in the first 3 months; earn 5% cash back on grocery store purchases (on up to $12,000 in spending in the first year)||Automatically get an unlimited dollar-for-dollar match of any cash back you've earned at the end of your first year||Get $200 cash rewards bonus after spending $1,000 in the first 90 days||None|
|Other perks||0% APR on new purchases 15 months||0% APR on new purchases for 14 months
0% (for transfers that post to your account by by January 10, 2021) APR on balance transfers for 14 months
|0% APR on new purchases 12 billing cycles
0% APR on balance transfers for 12 billing cycles
|0% APR on balance transfers for 18 months|
Debit cards do provide cash back — but credit card are more generous
If you want to maximize the rewards you earn, it makes sense to pay for as many purchases as possible using a credit card. But you do need to pay off your balance in full each month or the interest you'll pay will far exceed the value of any rewards.
If you aren't confident you'll be able to be responsible with credit or if you can't qualify for a credit card, you may decide a debit rewards card is better for you. Fortunately, now you know what some of your options are for debit cards that offer rewards and you can find a card that's right for your needs.