Online banking rewards programs offer customers the convenience of banking by computer with the added bonus of points that can be redeemed for a wide variety of shopping or travel benefits. Their motto is "Spend money to save money." Take this quiz and find out how spending your money online to pay bills, etc., will help you earn you money offline.
Online banking is done by computer at home or at work.
The alternative to online banking is the traditional brick-and-mortar banking, where you pay your bills by writing checks and go to the bank to make deposits.
With online banking, clients can access their bank accounts easily and have the tools to manage their money more efficiently.
The banks benefit in that they reduce their transaction, delivery and administrative costs.
Online banking reward programs are designed to encourage customers to use the bank’s online services and to reward them for their loyalty.
There are two types of online accounts referred to as rewards programs. One is a points-based reward program; the other offers higher interest rates to customers who meet the bank’s criteria.
For each dollar spent, clients rack up rewards points. Depending on the terms of the program, one to two points are generally given for every dollar a client spends.
The client can use the points for cash back as a credit to his/her account or air travel, gift cards and certificates or merchandise.
If everyone did all their banking online, more than 17 million trees a year would be saved as result of the mass reduction in paperwork.
Once you are enrolled in the program, you can start earning points immediately for everyday purchases.
Some banks offer triple points for purchases made with a credit card. They may also offer double points for debit card or recurring purchases.
You can earn more points when you make purchases through a network of merchants, which includes a host of popular retailers Once you register, you can access their websites through a customized portal, and your purchases will help you rack up points more quickly.
You check your points and redeem them as easily as you is log into your reward account.
Some small and community banks are offering rates as high as six percent to attract new online customers from near or far.
Banks prefer rewards accounts over regular free checking accounts, because they are more profitable. The clients keep higher balances and maintain their account longer.
There is often a limit to the amount that earns the higher rate of interest. Usually the limit is $25,000, but some banks will pay the higher interest on deposits of up to $70,000
The two types of gift card are the open loop and closed loop. With the open loop, the recipient can spend it at a variety of businesses. The closed loop card can be used at only specific places or chains.
When you receive a gift card, your best plan of action is to use it. Only one-third of people who receive them actually redeem them.
The FIDC will cover up to $250,000 for individual accounts.
BancVue is a company that helps small and community banks set up rewards accounts.