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Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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USAA Bank Announces the End of Its Debit Card Reward Program


A week after the Federal Reserve released its final rules on the debit card regulation, USAA Bank announced that it will be ending its debit card reward program. However, USAA Bank will be keeping its free checking account along with its ATM fee refunds. USAA Bank posted the announcement on its website in this news release:

A new federal law will significantly reduce the revenue banks receive from merchants when consumers pay with a debit card. USAA Bank has always returned the majority of this revenue to its members in the form of benefits, such as free checking, ATM fee refunds and debit rewards.

As a result of the law, USAA Bank will end its debit card rewards program Sept. 1.

The new regulation caps the debit card interchange fees that retailers pay every time you use your debit card. The regulation exempts financial institutions with assets under $10 billion. USAA Bank has $48 billion in assets so the fee caps will directly affect them. The regulation takes effect on October 1st.

USAA Bank's debit card reward program wasn't that great, so I doubt it will be missed. It only offered 0.5% cash back. For those interested in cash back rebates, they will probably be using a credit card. Since the regulation only affects debit cards, USAA Bank will continue to offer credit card cash back rewards.

According to USAA Bank, they conducted a survey to decide what to cut:

USAA's survey found that members favored free checking and ATM fee refunds over debit card rewards. Based on this feedback, we decided to stop the debit card rewards to maintain the other benefits

It's nice to see USAA Bank will be keeping its free checking along with its ATM fee refund policy which refunds up to $15 in other banks' ATM usage fees each month. The checking account will remain a good deal. Other perks that come from the free checking include mobile banking apps and Easy Deposit which allows you to deposit checks at UPS Stores around the nation. They also offer a remote deposit service called Deposit@Home, but they are still restricting this to customers who qualify for their insurance products which requires a military connection.

Thanks to reader WhataBummer who first mentioned this news in the discussion forum.

Related Pages: USAA Bank, San Antonio

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Shorebreak   |     |   Comment #2
Re: Anonymous - #1, Friday, July 8, 2011 - 9:06 PM

Jo   |     |   Comment #3
I think USAA chose the best alternative of the choices they were confronted with; I hold a checking account there and will readily give up the rewards program over being charged a monthly fee. It just proves that they choose to put their customers ahead of their potential greed. Unlike the other large banks who readily chose the checking account fees, it reinforces USAA's priorities yet once again.

Ya gotta love Karma, which is what's going to come around and bite the big banks in the arse. I would not be surprised if this move on USAA's part eventually surges them ahead of the big banks. You know people will want to withdraw from Chase, Wells Fargo, BofA, and the rest, looking for a local/community CU/bank or USAA itself.
RJM   |     |   Comment #4
What will be interesting is to see how retailers react now that they can legally offer a cash discount.

I always use rewards cards but if I get a cash discount, I may well opt to pay cash in the future when the cash discount exceeds the reward.
CDA   |     |   Comment #5
A community bank is the way to go.  Keep the money that is earned and or saved in your local enconomy!  Not in the form of big bonuses to corporate execs.
Mark in CT
Mark in CT   |     |   Comment #6
Well, I just added up my last 12 months of cash back from USAA  into my chencking at the end of every month, it camp up over $234...once again, the government COST ME $$$$$$  they suck! I figgin hate congress.....UUUUUUUHHHHHHHHHGGGGGGGGGGGGGGGGGGGG!!!!!!!!!!!!!!!!!!!!!!
Anonymous   |     |   Comment #7
The article reads:  "USAA Bank's debit card reward program wasn't that great, so I doubt it will be missed. It only offered 0.5% cash back."

"USAA's survey found that members favored free checking and ATM fee refunds over debit card rewards. Based on this feedback, we decided to stop the debit card rewards to maintain the other benefits."

I want to know who USAA talked to when conducting this "survey".  They certainly didn't call me.  I did not use the cash rewards option, because the author of this article was right, the cash rewards sucked.  But the points program was awesome.  Last year I earned enough points in 15 months, in just my regular weekly spending, to get $275 cash back.  This year, I was going to be on track to probably get $350 back, because I have already earned enough in 9 months to get the same $275 back that I did last year.  That is certainly a lot better than saving $15 a month in ATM's or $5 a month in service fees for checking.

  Whoever voted to get rid of the rewards program obviously did not use it to the full advantage & they are stupid for voting to get rid of it.  I personally like $300 back per year (especially around Christmas, which is when I was planning on using it).
RJM   |     |   Comment #8
I suspect more & more will be reducing or eliminating rewards in the future.

My paypal card is grandfathered in at 1.5%.

And i use Chase & Discovers quarterly 5% promotions a lot.

Heck, maybe merchants start offering cash discounts. For a 2% cash discount, I will go back to paying cash for lots of things.
Ron   |     |   Comment #11
To the moron that wrote this article... .05% isn't that much... I love the USAA cash back rewards infact I purchased high end items all the time with my debit card I made $300.00 one year in  cash back rewards.. What a dumb ****!
RJM   |     |   Comment #12

Ken is not a moron and 0.5% on a reward checking account is very low rate of interest.

Are you confusing the interest rate with a a cash back rewards ?

If you got $300 in a year from 0.5%, I suspect I would have made many times that going with my paypal card at 1.5% to chase & discovers 5%.

But what do cash back rewards have to do with a lousy low interest rate rewards card ?
Anonymous   |     |   Comment #13
Great. It's May 28th of 2015 and I just realized I didn't get debit rewards anymore. Before I found this article I called to inquire why I hadn't received my reward. The representative didn't understand what I was calling about and placed me on hold, upon her return she informed me that they no longer issue debit rewards and most of the staff is new and had no idea they ever had such a program.
Guess I should start paying more attention to my account disclosures.