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Banking

These 4 debit cards offer credit card-like rewards and perks

Debit cards aren't known for their rewards, yet these ones offer cash back and can help you save.

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The M1 Spend Visa® Debit Card is no longer available.

Credit cards are great for those who are looking to build credit, earn rewards and take advantage of various purchase protections. However, they might not be a good option for everyone.

If you're prone to overspending and can't pay off your balance on time and in full each month, you'll likely face late fees and costly interest. Plus, if you have a bad credit score, you might have trouble even getting approved for a credit card in the first place. This is where debit cards come in handy.

Unlike credit cards, where you're essentially borrowing money from a line of credit, debit cards are linked to your checking account and you pay for each transaction instantaneously. This allows you to manage your spending better, to not worry about approval odds and to avoid any unexpected late fees and high interest.

One caveat is that most credit cards offer a lot more perks than debit cards — in part due to 2010 legislation limiting the interchange fees that debit card issuers can charge merchants. In other words, debit cards became a less lucrative product for banks, so they began offering fewer rewards on these cards.

There are, however, a handful of debit cards on the market that offer rewards and that can actually build credit (the latter usually being a big disadvantage to only using debit cards). To determine the four best rewards debit cards, CNBC Select looked at which debit cards have the lowest fees, the highest cash-back rewards rates and the lowest minimum balances to earn rewards. (Read more on our methodology below.)

Best rewards debit cards

Best overall

Discover® Cashback Debit Checking

Discover® Bank is a Member FDIC.
  • Monthly maintenance fee

    $0

  • Minimum deposit to open

    $0

  • Minimum balance

    None

  • Rewards

    1% cash back on up to $3,000 in debit card purchases each month. See website for details by clicking "Learn More".

  • Free ATM network

    60,000+ Allpoint® and MoneyPass® ATMs

  • ATM fee reimbursement

    None

  • Overdraft fee

    $0

  • Mobile check deposit

    Yes

Terms apply.

The Discover® Cashback Debit Checking is one of the few debit cards that offers rewards and has no annual fee. While the cash-back rate is relatively modest — only 1% — cardholders can still earn rewards on up to $3,000 worth of purchases each month. This means you can receive up to $30 in rewards monthly.

In order to get the card, you must open a Discover® checking account. There are no minimum deposit amounts, but you're required to make a deposit within 45 days of opening the account. You can deposit money to your account through direct deposit, online transfer from another bank account or mobile deposit of checks.

If you want to withdraw money from your checking account without paying ATM fees, you can do so at 60,000+ Allpoint and MoneyPass ATMs. One caveat of this card is that it has limited use abroad: It can only be used at select merchants in Canada, Mexico and the Caribbean. Cardholders are also eligible for a feature called 'early pay,' which allows them to access their paycheck two days earlier than they normally would.

Runner-up

Axos Bank CashBack Checking

  • Monthly maintenance fee

    $0

  • Minimum deposit to open

    $50

  • Minimum balance

    No minimum balance

  • Rewards

    Earn up to 1.00% cash back on all transactions that require a signature.

  • Free ATM network

    None

  • ATM fee reimbursement

    All domestic ATM fees reimbursed

The Axos Bank CashBack Checking is a no-fee option that offers debit cardholders up to 1% cash back on signature-based transaction purchases. Earn up to $2,000.00 per month in cash back on your signature-based transactions. 

This card does, however, have a few restrictions on what cardholders can earn rewards on.
Purchases made at wholesale, discount, grocery, super stores and markets are not eligible for cash back. Cardholders also need to maintain an average daily balance of $1,500 in order to earn 1% cash back. If their balance falls below that, they will only earn 0.50% in cash back that month, or up to $10.

There's a required minimum deposit of $50 to open an account. There are no monthly maintenance fees and account holders can get unlimited reimbursements for domestic ATM fees.

Best debit card to build credit

Extra Card (Rewards + Credit Building)

  • Rewards

    Up to 1% rewards points on all purchases

  • Welcome bonus

    None

  • Annual fee

    $25 a month or $199 upfront for the year. 

  • Foreign transaction fee

    N/A — cannot be used internationally

  • Credit needed

    None

Pros

  • Does not require a security deposit like other credit cards for building credit
  • No credit check or minimum credit score required

Cons

  • Costs $199 annually
  • Only reports to two credit bureaus, Equifax and Experian

The Extra Card isn't known for its generous rewards, but it is one of the few debit cards on the market that can help improve your credit score. If you have a low credit score or a thin credit file, it can be difficult to get approved for all sorts of financing, from credit cards, to personal loans and mortgages. The only catch is that the card requires paying a $20 monthly fee or a $199 upfront annual fee to earn rewards.

With the Extra Card, purchases and payments are reported to two of the three main credit bureaus: Equifax and Experian. The Extra Card is able to do this because it doesn't operate like a typical debit card. Instead, Extra pays for the purchase at the time of the transaction and then withdraws the money from your bank account the next day. Your spending limit will always be based on the real-time balance of your bank account.

The rewards on the Extra Card are definitely lacking, however — cardholders only earn up to 1% back in rewards points on their purchases. Those rewards points can only be used in the Extra rewards store which features items like gift cards and AirPods.

Best debit card with a high APY on a checking account

M1 Finance is a banking and investing platform that offers debit cards, credit cards, brokerage accounts, retirement accounts and crypto accounts.

Anyone with a M1 checking account, however, can get the M1 Spend Visa® Debit Card. It's free to sign up for a standard account, but if you want to maximize your returns, you'll need a M1 Plus membership, which costs $125 per year and has a one-year free trial.

The M1 Spend Visa Debit Card offers the following rewards: 1% cash back if you're a M1 Plus member and 0% cash back for non-members. If you're a M1 Plus member, you'll be reimbursed for any foreign transaction fees, but non-members will have to pay between 0.8% and 1.0%, depending on if the merchant settles the transaction in U.S. dollars.

The M1 Plus membership also comes with other rewards and perks like a 3.30% APY checking account and a credit card that earns rewards on the stocks you hold in your M1 brokerage account. There is no minimum balance on the checking account. M1 Spend checking accounts are FDIC-insured up to $250,000 through Lincoln Savings Bank.

FAQs

What are cashback debit cards?

Cashback debit cards are debit cards that offer credit card-like rewards, such as cash-back, points or miles. They are linked to your bank account and work similarly to cash, where you typically can't spend more money than you have in your account.

Are cashback debit cards worth it?

Some cashback debit cards may charge an annual or monthly fee or have a required minimum balance. The rewards you'll earn can offset these fees, though there are also a number of rewards debit cards that don't have these fees and still earn decent rewards. 

Which bank gives reward points on debit cards?

There are a few banks that offer rewards on debit card transactions. Some banks that offer rewards debit cards include Bank of America, Axos Bank and American Express.

How do you earn points on your debit card?

You earn rewards on your debit card by spending money with your debit card. Typically, for every transaction you make, you'll receive a percentage of the purchase in the form of cash-back, points or miles.

Our methodology

To determine which rewards debit cards were the best, CNBC Select analyzed some of the most popular rewards debit cards on the market. We compared each card's rewards rates, whether a minimum balance was required, ATM fees, the size of the ATM network, monthly fees and other perks. If customer reviews were available, we referred to those as well.

Catch up on CNBC Select's in-depth coverage of credit cardsbanking and money, and follow us on TikTokFacebookInstagram and Twitter to stay up to date.

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Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
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