Credit cards dominate the travel rewards universe. From the large sign up bonus, to the category multipliers on everyday spend, credit cards offer tremendous point and mile earning opportunities. However, credit cards are not the only avenue to earn valuable points and miles. One, relatively unknown, method to earn points and miles, is a travel rewards debit card.
The Travel Rewards Debit Card
Prior to the United States financial crisis in 2008, while still not common, multiple banks offered a travel rewards debit card. After the financial crisis, and ensuing legislation, competition in the travel rewards universe was no longer profitable for banks. However, a few debit cards, which offer points and miles on everyday spend remain.
Delta SkyMiles World Debit Card
The Delta SkyMiles World Debit Card, issued by SunTrust (now Truist), is the most well known travel rewards debit card on the market today. Despite being a debit card, the Delta SkyMiles World Debit Card offers the opportunity to earn Delta SkyMiles on any purchase.
Sign Up Bonus:
5,000 Delta SkyMiles
Annual Fee:
$95
Earning Categories:
1x Delta
1/2x All Other Purchases
** 4,000 Delta SkyMiles Monthly Cap
Credits:
N/A
This card is perfect for individuals who do not qualify for credit cards, but still want the ability to earn Delta SkyMiles on everyday purchases.
** There is also a Business version of the same card, but the annual fee is higher ($120) and the monthly earning limit is lower (2,000 Delta SkyMiles).
The Delta SkyMiles World Debit Card Alternative
If your goal is earning Delta SkyMiles, consider the AMEX Delta SkyMiles Gold credit card. The annual fee on the Delta SkyMiles Gold credit card ($99, waived first year) is similar to the Delta SkyMiles World debit card ($95). However, the Delta SkyMiles Gold credit card earns you 2x Delta SkyMiles on Dining, Groceries, and Delta purchases. In addition, at 70,000 Delta SkyMiles, the credit card has one of the best sign up bonuses of any credit card. The Delta SkyMiles Gold credit card also provides you with a free first checked bag, $100 Delta credit, and 20% off inflight purchases.
Bankoh Hawaiian Airlines Visa Debit Card
The Bankoh Hawaiian Airlines Visa Debit Card, issued by Bank of Hawaii, offers one of the few ways to earn Hawaiian Airlines HawaiianMiles directly. The debit card offers the opportunity to earn HawaiianMiles on every purchase and bonus HawaiianMiles for purchases through the HawaiianMiles Marketplace.
Sign Up Bonus:
N/A
Annual Fee:
$36
Earning Categories:
1/2x HawaiianMiles Every Purchase
** 1,000 HawaiianMiles Monthly Cap
Bonus HawaiianMiles on HawaiianMiles Marketplace
** No HawaiianMiles Cap
Credits:
N/A
This card is perfect for individuals who do not qualify for credit cards or who are looking for a quick and easy way to top up their HawaiianMiles balance.
The Bankoh Hawaiian Airlines Visa Debit Card Alternative
Outside of flying Hawaiian Airlines itself, earning HawaiianMiles directly is notoriously difficult. One alternative option is the Barclays Hawaiian Airlines World Elite Mastercard. While the annual fee is significantly higher ($99 vs $36), so are the benefits. The sign up bonus sits at 80,000 HawaiianMiles and you earn HawaiianMiles at a rate of 3x on Hawaiian Airlines purchases and 2x on gas, dining, and groceries. In addition, the credit card benefits include the first checked bag free, a one-time 50% off companion discount, and a $100 companion discount.
Disney Visa Debit Card
The Disney Visa Debit Card, issued by Chase, offers a fantastic way to earn cash back on a wide range of Disney purchases at Walt Disney World Resort and Disneyland Resort.
Sign Up Bonus:
N/A
Annual Fee:
$0
Earning Categories:
N/A
Credits:
10% on select purchases at shopDisney.com
Pose for special photos at a private cardmember location
10% off select merchandise purchases of $50 or more
10% off selection dining locations
15% off select guided tours
10% off select recreation experiences
The Disney Visa Debit Card Alternative
The Chase Disney Premier Visa credit card offers all the same benefits as the Chase Disney Visa Debit card, and more. The credit card comes with a $300 statement credit and the opportunity to earn Disney Reward Dollars on everyday purchases; 2% on groceries, restaurants, gas, and Disney purchases and 1% on all other purchases. In addition, the credit card offers you a special 0% financing opportunity on Disney vacations.
Bask Mileage Savings Account
The Bask Mileage Savings Account, issued by Bask Bank, is one of the most unique opportunities to earn points and miles. The Bask Mileage Savings Account functions exactly like a normal savings account, with one exception. Instead of earning interest on your savings in cash, you earn interest in American Airlines AAdvantage miles. The AAdvantage miles accrue daily and a deposit occurs monthly. Here is the calculation:
Average Monthly Balance ÷ 365 x Days Per Month = AAdvantage Miles
The relative annual interest rate on the account is 1.4%; the interest is taxable. Bask Bank also offers various mileage bonus opportunities, including an account opening bonus. The current bonus earns you 1,000 AAdvantage miles on an initial deposit of $5,000.
There is no comparable product anywhere else in the travel rewards universe.
What Are The Benefits Of A Debit Card
Why should you consider a debit card over a credit card? To start, it is relatively easy to open a bank account and get a debit card. There is no “hard pull” on your credit score, which opens up debit cards to individuals with poor credit. Once you have a debit card, your account balance limits your spending ability. This helps avoid excessive debt and compounding interest. A travel rewards debit card is perfect for individuals who want points and miles, but either do not qualify for a credit card or have trouble controlling their spend.
What Are the Drawbacks Of A Debit Card
The main drawback to a debit card is the inability to positively effect your credit score. A debit card does not affect your FICO credit score. You are not rewarded for sound financial behavior and prompt payments. Debit cards also carry the risk of overdraft fees and the potential for AMT fees. Furthermore, in regards to travel rewards, debit cards pale in comparison to credit cards. Both the sign up bonus and earning potential of a travel rewards credit card far exceed that of its debit card counterpart. In addition, credit cards often provide valuable insurance and various purchase protections lacking in a debit card.
Final Thoughts
Imagine a Venn Diagram with two circles. The first circle represents the world of Dave Ramsey. The second circle represents the world on travel rewards. A travel rewards debit card occupies the microscopic space where the two circles overlap. However, if your goal is earning large volumes of points and miles, a travel rewards debit card is not the answer. First, very few travel rewards debit cards even exist. Second, the opportunity to earn valuable points and miles via a credit card dwarfs that of a debit card. With that said, a travel rewards debit card provides a unique points and miles opportunity to individuals with poor credit.