I wrote in March that a few major banks were eliminating their debit-card rewards programs (see Debit-Card Rewards Disappearing ). Since then, several more banks have decided to end their programs or make changes to compensate for loss of revenue from debit-card fees, which will be capped at 21 cents starting October 1. (Banks now charge merchants an average of 44 cents every time a customer uses a debit card and are expected to lose $9.4 billion in revenue as a result of the new fee cap.)
If your bank's debit-card rewards program was one of the main reasons you chose that financial institution, you might want to consider shopping for a new bank if yours axed its program, says Alex Matjanec, co-founder of MyBankTracker.com . See Time to Switch to a Small Bank? for more advice.
SEE ALSO: How to Get a Better Deal at Your Bank
But before you jump ship, give your bank a little more time because Matjanec expects some banks that eliminated their debit rewards to introduce new merchant-funded rewards programs by the end of the year. Ally Bank recently started offering this type of debit-rewards program, which gives customers cash back when they spend a certain amount on purchases at specific stores (see Ally Bank Rolls Out Debit-Card Rewards Program ). Matjanec says it's easier for banks to offer these programs because the merchants actually run them (and the banks collect a percentage of the revenue).
To see which banks have eliminated their debit-rewards programs, which have not and which are still trying to decide the fate of their programs, see the list below compiled by MyBankTracker.com:
US Bancorp , ended its rewards program in February
Regions Financial Corp , ended new enrollments on March 1
Wells Fargo & Co. , ended rewards program on March 20
SunTrust Banks Inc. , ended new enrollments on April 15
Fifth Third Bancorp , ended rewards program in July
JP Morgan Chase , ended new enrollments in July but introduced a new merchant-funded program August 10
USAA Bank , will end program on September 1
PNC Financial Services Group Inc. , will end new enrollments on September 12
BVAA Compass , will end its current rewards program and begin offering a merchant-funded rewards program on September 20. Existing rewards customers will be able to keep their points.
Bank of America
Capital One Financial Corp.
HSBC North America Holdings
Hudson City Bancorp Inc.
KeyBank, will enhance its rewards program this fall ING Bank
TD Bank US Holding Co.
New York Community Bank
Citizens Financial Group
First Niagara Financial Group
Several banks could not be reached or declined to respond to MyBankTracker.com's survey. More banks will be added to this list as they respond to MyBankTracker.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
