Have a Reward Checking Account but Use Your Credit Card Too

Have a Reward Checking Account but Use Your Credit Card Too

Debit card aversion: it's one of the main deal breakers that stop credit card aficionados from setting up a reward checking account. Per one of the principalreward checking account stipulations, a debit card must be used 10+ times a month to qualify for the highest possible rate of return. This stipulation is intensely debated, as evidenced by these comments we found on a popular finance blog:

"I really dislike debit cardsI'm so used to being able to see everything at once on my credit card statement and paying it off with one lump sum."

"I simply don't ever make debit card purchases, let alone 10 per month. I use my credit card for everything so I can earn my 1.25-5% cash back."

There are many people out there who prefer using credit cards for the majority of their personal finance needs. And rightfully so. We believe that you should use your credit card for everyday purchases. Here's why

Why Credit Cards Matter

The return on the rewards given to cash-back credit card holders is built into the cost of goods sold. So if you use cash, or non-reward cards like debit cards, you are missing out. Say you are in line at a sporting goods store and you buy new tennis shoeswith your debit cardfor $60. The person in line behind you buys the same pair of shoes; but, because they are buying the shoes with their credit card, they are only spending $57.85. The difference will be paid back to them, along with all the other purchase they've saved on, throughout the course of the year.

Cash-back credit cards are great, as long as you don't carry a balance on them from month to month. The high interest rate on cash-back cards will wipe out the savings and in turn cost you much more than they're worth. With the recent financial regulation reform,merchants could possibly be allowed to set a minimum purchase price at $10 for credit cards. For those with reward checking accounts, it's worth paying attention to; the possibility of higher monthly transaction costs would increase in order to meet the minimum reward checking requirements.

While we are proponents of using credit cards for your everyday purchases to earn cash back and maximize your finances, we also don't think debit card aversion should be an excuse holding you back from a reward checking account. A reward checking account, or high yield account, is a great way to build an emergency fund. It's a no-brainer as a method to start an emergency savings fund, as long as you can abide by the few monthly stipulations. Plus, there are ways to get around spending a high dollar amount on the debit card transactions.

Want to have a reward checking account but still use your cash-back credit card for 99% of your purchases? Then visit our onlinereward checking account services here.

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