Ally Bank launched four new products last weekend. I did a quick overview of the Ally changes on Sunday. During this week I've been doing in-depth reviews for each of the four new products. Today will be the last of these reviews, and it will focus on the Ally Perks Program.
The Ally Perks program requires that you have Ally Bank's Interest Checking account and its debit card. When you make qualifying purchases using the debit card, Ally will reward you with money back (deposited to your account). The "qualifying purchases" are based on offers they list when you log into your account.
Details of the program are listed at the Ally Perks page. However, they don't list any examples. A reader commented about the offers that he was seeing when he logged in:
I'm seeing the following Ally Perks in my account: $5 back on $50 purchase at Target.com, $5 back on $40 purchase at Shoes.com, $5 back on $35 purchase at Petsmart.com, $5 back on $25 purchase at bestbuy.com, $1 back on $2 purchase on iTunes... And quite a few more.
It's important to note that this is not a generic cash back reward program in which you earn a certain percentage cash back on all purchases. The cash back is only for the listed offers with specific retailers and for specific purchase amounts.
Other Banks with Similar Programs
This kind of rewards program reminds me of the SmartyPig Cash Boost. In that program, you can redeem your savings goal into a discounted retail gift card.
Other similar programs include FNBO Direct's My Deals, Bank of America's Add It Up and Sallie Mae Bank's UPromise.
All of these programs allow you to get discounts for purchases at certain retailers.
Where the Cash Back Money Comes From
It appears that the cash back from Ally Perks and these other programs come from retailer agreements. These programs are designed to bring more money and new customers to the stores. In exchange, the stores provide a discount.
The cash back doesn't appear to come from the debit card interchange fees which are scheduled to be capped soon by the new Federal Reserve regulation. This makes sense since Ally, as a large bank, will definitely be hit by the cap when the regulation takes effect.
Value of the Program
As you can see by some of the examples above, there are significant cash back opportunities. If you already have Ally's checking account, I don't see an issue with keeping an eye on the offers and making use of those offers that are good deals for you. Since the offers require spending a certain amount, they could encourage you to spend more. Also, when you use your Ally debit card, you'll miss out on credit card cash back opportunities and it will be harder to meet your monthly reward checking requirements.