Mirroring what previously was known about debit card rewards, consumer website Bankrate.com has found through its own recent research that the majority of programs require a signature-based transaction to receive an incentive. How that changes after the Federal Reserve Board sets debit card interchange rates remains to be seen, and the survey data could serve as a benchmark, Bankrate.com says.
Bankrate.com in June examined 40 debit card rewards programs and found that 65% gave rewards only on signature purchases, while 30% did so for both signature and PIN-debit transactions. The other 5% of programs only offered merchant-funded rewards.
The range for rewards on signature-debit transactions was between 0.2% and 3% of the sale; the range for PIN-debit transactions was between 0.1% and 0.5%.
Half of the programs surveyed charged no annual fee. For those programs that did charge, Bankrate.com found fees ranging from $12 to $55 per year, with the most common annual fee being $25.
Debit card rewards are in store for a major overhaul now that Congress has passed the financial reform bill (
Banks use part of their interchange income to fund card rewards.
Bankrate conducted the survey with an eye toward the legislation, says Greg McBride, a Bankrate.com financial analyst. “This survey gives us the before picture, before any changes take place,” he tells PaymentsSource.
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