Advantages of Reward Checking Accounts That Count PIN-Based Debit Card Purchases

One provision of the financial reform bill (that's likely to become law this week) gives retailers the right to impose a $10 minimum purchase requirement for credit cards. Also, retailers will be allowed to give discounts for paying cash instead of credit. These provisions may also affect debit card purchases. However, it's possible that PIN-based debit card purchases may be excluded.

The fees that retailers pay for PIN-based debit card purchases are much less than credit-based debit card purchases. Here's one example given by Clark Howard:

If you go for credit, the merchant will pay $1.50 in processing fees. If you opt for debit, the merchant may only pay 17 or 18 cents.

So if retailers start implementing these changes for credit card purchases but not PIN-based debit card purchases, it will be important for us to identify reward checking accounts that allow PIN-based debit card purchases to be counted toward the debit card usage requirements.

Many banks and credit unions allow both signature-based (credit) debit card purchases and PIN-based purchases to count. This includes the two nationwide reward checking leaders, Danversbank and ViewPoint Bank. Allowing both types of transactions appears to be most common. However, there are a few that only count signature-based purchases. One recent example is TransPecos Bank (see review). In my reviews of reward checking accounts, I have tried to note if the debit card purchases have to be signature-based.

It is nice to see many banks counting both types of transactions. My guess is that most people just use the credit option since you don't have to remember your PIN, and that's why banks allow both.

There are a few institutions that actually punish customers for making PIN-based debit card purchases. One example is GTE Federal Credit Union which charges customers 25 cents for every debit transaction made using the PIN (see review).