These are some of the questions to ask yourself before deciding which debit card offers the highest cashback or rewards points:
First of all, compare the basics
The basic features of a debit card to compare are:
- Fees – look for a card with no fees and check on fees charged if you overdraw your card. Compare overseas transaction fees and ATM fees if you use your card abroad, as they could reach as high as 4% and $5, respectively
- Security – make sure you can easily lock your card if it’s lost or stolen. Being able to do so through online banking or a mobile app is preferable to having to phone a card hotline, which may only operate during business hours
- Spending limits – many debit cards come with spending limits per day, which could be around $2,000 or less, or cash withdrawal limits at ATMs. Compare these limits and make sure they fit in with your needs
- Compatibility – make sure the card you choose works with the virtual wallet on your phone or wearable device, so you’re able to make contactless payments and store your card digitally
Think about whether the rewards are useful
The main thing to consider when choosing between debit card reward offers is whether you’ll actually make use of the rewards on offer. Surveys have shown that almost half of people who have a loyalty program don’t claim the rewards they’re entitled to. This waste of rewards points is often a result of having an unsuitable debit or credit card. For instance, there’s no point in being offered a pay TV subscription if you only ever watch free-to-air TV. As such, it’s important to make sure the highest cashback or rewards points are also relevant to your everyday spending and that you’ll use the points which are earned.
Is the reward worth the spending?
In addition, make sure you aren’t swayed by all the hype and advertising to spend more than you would have normally spent for very little real reward. For example, one bank offers cashback reward points if you spend $30 or more at least three times a month with Menulog. This equates to a minimum spend of over $1,080 on takeaway food in a year, for which you could receive a $200 cashback voucher. You should look at the big picture and ask yourself if the rewards on offer are worth the spending necessary to earn them.
Does the card fit in with your normal spending habits?
It’s also crucial to ask yourself whether the cashback offer on your debit card aligns with your normal spending routine. It isn’t always best to force yourself to shop in a particular store or buy specific branded products you might not normally buy just because they’re linked to your debit card cashback offer.
