Bancorp Bank Issues Rewards Debit Card

At a time when most banks are making it much less palatable to use your debit card, a small non-branch bank in Delaware is rolling out a new debit card with a rewards program.

Maybe I should qualify the choice of the word “small” to say that Bancorp Bank is a now a giant in the world of prepaid cards. They have roughly $2 billion in deposits, but they issue cards for most of the major ISOs. Since MetaBank was felled by an OTS order, more card programs are turning to Bancorp. The momentum is on their side.

I saw an add for “Perkstreet” in my hotel room last week. At first blush, the advertisement give the impression that this is some kind of financial recovery program built around “a community of savers.” Instead, the card functions as something of a reserve account for people that have another bank account.

Perkstreet is not a prepaid debit card. Rather, it functions as an online checking account. Some banks with these cards distinguish them from either prepaid or a full checking account with the term “demand deposit” card.

The card has no monthly fee, (see fee schedule ) provided that the account holder conducts at least one transaction per period. The cards have overdraft and NSF fees.

The key benefit with the cards is their cash back benefit. Perkstreet says that if an account holder spends $2,500 per month that over the course of the year they will get $600 back in rewards.

I think people like getting free money. For people that qualify for platinum rewards credit cards, getting free miles or cash back has become common. For people at the other end of the financial spectrum, getting anything for free is unusual.