Many experts suggest using a credit card rather than a debit card because it provides better fraud protection and can give the cardholder access to comprehensive rewards programs. In general, debit cards cannot compete with these benefits.
As credit card issuers face a more competitive market, banks are expanding debit card offerings and incentives. Debit cards that withdraw money directly from a checking account can now offer rewards to users, including points, price discounts and cashback.
A cashback debit card can be a great option for consumers with bad credit or a limited choice of credit cards.
Should I buy cashback debit cards?
Think about your situation and goals. Are you looking for rewards with no credit history or bad credit history? It can be difficult to get approved for an unsecured credit card that offers benefits like points, miles, or cash rewards, especially with thin or damaged credit. By choosing a cashback debit card, you can still earn rewards for your spending.
Also, if you have a tendency to overspend, a cashback debit card might be the perfect choice for you – it offers rewards but also limits your spending to what you can afford.
The best debit cards for cashback
For consumers with a limited choice of credit cards, a debit card is a viable option. You have some great options to consider. Here are four debit cards that stand out for their cash and miles back benefits.
Discover cashback deductions
Why did we choose this: With the Discover Cashback Debit Card, users can earn up to $30 per month with a 1% return rate on purchases up to $3,000 per month. Discover does not require a minimum deposit to open a checking account, but cardholders must make a deposit to their accounts within 45 days from the opening date.
Rewards do not expire as long as the account is open and in good standing with Discover. This card’s redemption options include an automatic deposit to a savings account or a loan to a checking, savings, or money market account you hold with Discover. You will also have access to over 60,000 ATMs without a fee.
- No monthly service fee
- Access to more than 60,000 ATMs without commission
- 1 percent money back
- No physical branches
- Can’t deposit cash
- 24/7 customer support
Who should applyA: If you don’t mind doing all your banking online, this card might be right for you because there are no Discover physical branches. You’ll also get 24/7 US customer support.
Who should missA: If you want to visit a physical store or prefer to use credit cards for everyday purchases, this card is probably not for you.
Delta SkyMiles Debit Card
Why did we choose thisA: For travelers who choose Delta Air Lines and its SkyMiles program, the Delta SkyMiles® Debit Card offers additional mileage opportunities. This debit card awards you 5,000 bonus miles after your first signature or PIN based purchase and up to 1 mile for every $2 USD for all future PIN or signature based purchases. While this debit card has a $95 annual fee, you can earn extra miles on direct Delta purchases based on your status with Trusit, which issues this debit card. Truist Wealth, Truist Asset Management Account, and existing Signature Advantage customers can earn 1 extra mile per $1 on Delta direct purchases.
- 5000 bonus miles after first purchase with signature or PIN
- Miles are earned when you sign transactions, shop online or use your PIN.
- Annual fee up to $95
- Gotta fly Delta a lot to get the benefit
Who should applyA: Those who bank with Truist, don’t want a credit card, are Delta SkyMiles members, or are Truist Wealth, Truist Asset Management Account, and existing Signature Advantage customers are all good card candidates.
Who should missA: If you don’t want to pay a commission or want to earn more miles on your purchases, a credit card might be a better option.
Refund via American Express
Why did we choose thisA: The Serve® American Express® Prepaid Debit Account is a little different from the others on this list as it is a prepaid debit card. In fact, the funds are not tied to a current account. Rather, the consumer transfers funds to the card and expenses are deducted from this preloaded balance.
Cardholders can receive an unlimited 1 percent refund on all their purchases, but there is a monthly fee of $6.95 per card. In addition, you will pay a fee of $3.95 to add more money to the card.
You can receive cashback for both personal purchases and online purchases. Unlike some debit cards that may make you wait until the end of the month to access your earnings, this prepaid cashback card gives you immediate access to your rewards. To access cashback, log in to your account portal or mobile app.
Also, Amex is known for its excellent fraud protection and this card does not disappoint. American Express Serve cards offer purchase protection benefits typically only seen on credit cards. If an item you purchase with a card is damaged or stolen for up to 120 days from the date of purchase, Amex can refund you up to $1,000 per incident (up to a maximum of $50,000).
- Instant access to rewards
- Excellent fraud protection
- Free reload available at participating locations
- Monthly fee
- Must use MoneyPass® ATMs for free transactions
Who should applyA: If you’re looking for a way to limit your spending and don’t want to carry around cash, this card might be a good choice. In addition, this is a convenient way to work in a bank without a current account.
Who should missA: If you do a lot of international transactions, use offline ATMs, or want to increase your credit, you should probably consider another option.
PayPal Business Mastercard Debit Card
Why did we choose thisA: PayPal Business Debit Mastercard® allows you to spend the money you have with PayPal. Cardholders can receive unlimited 1% cash back on qualifying purchases, including any purchases made from a linked bank account, which is a unique benefit. This card also does not charge an annual fee.
This card from PayPal also offers the superior benefits of any Mastercard, including worldwide acceptance and ATMs, online account management and zero fraud protection.
- No annual fee
- Benefits provided by Mastercard
- Fraud Protection
- ATM withdrawal fee $1.50.
- No sign up bonus
- PayPal transfers are limited to $400 per day.
Who should applyA: If you need a debit card linked to your PayPal business account, automatic cash rewards, or the ability to transfer funds between your PayPal account and your bank account for free, this might be a great option.
Who should missA: If you want a signup bonus, no ATM fees, and bonus rewards for certain spending categories, you can look elsewhere.
Credit cards with cashback
If you want to get credit while earning cashback, you can apply for a cashback credit card. A number of cashback cards have a flat cashback rate, while others offer a higher cashback percentage for certain categories of purchases (such as food, travel or gas) and then a flat cashback rate for all other purchases.
For example, a cashback credit card might offer a 3 percent cashback on groceries and gas, but 2 percent on all other purchases.
Be careful with cashback credit cards – if you can’t pay off your balance in full by the due date, you risk paying much more interest than you can earn in cashback.
If you don’t want to use a credit card, a cashback debit card can be a valuable addition to your wallet. While it doesn’t offer as many benefits and perks as a bonus card, it can still help you limit your spending and is a good alternative for those with bad credit. If you choose a cashback debit card, just make sure you find the one that offers you the highest reward rate as well as the benefits you need the most.