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Americans typically don’t earn rewards when paying with a debit card. That’s because unlike credit cards, the fees that issuers can charge merchants for accepting debit cards are capped by law at a relatively low rate, which makes it cost-prohibitive for them to offer rewards for debit card usage.
But on Tuesday, American Express launched an innovative new checking account that earns not just interest on your money but also rewards when you use the connected debit card for purchases. The account, called Amex Rewards Checking, has no minimum balance and no monthly maintenance fees, and is available starting today at americanexpress.com/en-us/banking/online-checking/ to customers who have had an Amex personal card for at least three months.
Customers “want more from their checking account, without giving up the benefits that are important to them,” says Eva Reda, executive vice president and general manager of consumer banking at American Express. “That’s why we built Amex Rewards Checking to deliver more value for members.”
Earn Amex Membership Rewards with a debit card
Amex Rewards Checking earns 1 American Express Membership Rewards point for every $2 spent on purchases with the account’s debit card. That’s half the basic rate of a typical credit card, but comparable to the very few deposit accounts that offer any rewards at all for using a debit card. There are no bonus categories with this debit card — all eligible purchases earn points at the same rate.
For consumers who don’t have any American Express charge or credit cards, the points earned with the Amex Rewards Checking debit card can be redeemed for a deposit back into your account at a rate of 0.8 cents per point. That means you’re effectively earning a 0.4% cash back return on all your debit card purchases if you redeem this way, which isn’t huge, but better than nothing.
However, things start to get much more interesting if you have even a single American Express card that also earns Membership Rewards points. That’s because consumers can combine all their Membership Rewards points across all their American Express products — including Amex Rewards Checking — and then have access to all the redemption options normally offered with your card account.
So if you have a card like the American Express® Gold Card or The Platinum Card® from American Express, you’ll be able to redeem the points you earn with your Amex Rewards Checking debit card for travel at American Express Travel, or at Amazon through the online retailer’s Shop With Points program, or you can even transfer them to any of Amex’s 21 airline and hotel partners.
That could potentially make your points worth a whole lot more. While some of those alternative redemption options are similar in value to depositing points back into your account, you can get much more for them when you redeem them for travel, especially through the issuer’s travel partners. That’s why frequent flyer website The Points Guy values Amex Membership Rewards at 2 cents apiece — and it’s possible to get even more than that when you redeem them for international first- and business-class flights.
Fee-free ATM withdrawals and purchase protection
Account holders can access Amex Rewards Checking via the American Express mobile app, which is available for both iOS and Android. Check deposits are made digitally with the app. There are no monthly fees on the account, regardless of your balance, and you earn a 0.5% Annual Percentage Yield (as of Feb. 3, 2022) on your money. While that’s not a huge amount of interest, it’s excellent for a free checking account in the current low-interest environment.
Plus, account holders get fee-free ATM withdrawals with the account’s debit card at 37,000 MoneyPass ATM locations nationwide. The card is also contactless-enabled for tap-and-go payments, and purchases made with the card get purchase protection, so the things you buy are covered against theft or damage for the first few months after you buy them.
Finally, you’ll get access to American Express customer service on a 24/7 basis, either by phone or chat if you run into any issues, and you’ll have fraud protection and monitoring of your account.
Should you get an Amex Rewards Checking account?
Frankly, the only thing missing from the Amex Rewards Checking account is a sign-up bonus. But while you won’t get anything extra for opening an account, the value from the account itself and the ability to earn rewards on your debit card purchases make it an easy win.
Since there are essentially no fees for opening and maintaining an account, there’s really zero downside to getting one. And while CNN Underscored still believes that you should use a credit card for most of your routine purchases — since you’ll earn more rewards and get more protections by doing so — there are always some items that can’t be paid for using a credit card. That’s where Amex Rewards Checking can be a powerful tool in your financial arsenal.
So if you want to earn rewards from your debit card, you’ll do very well with the Amex Rewards Checking account, especially if you can pair it with an American Express charge or credit card and redeem your points for travel. It’s certainly worth a good look if you’re primarily a debit card user, or if you just want to have another option when it comes to earning rewards from your banking relationships.
These American Express cards also earn Membership Rewards points that can combine with points earned from the Amex Rewards Checking account debit card and then be redeemed for travel or transferred:
Looking for a new credit card? Check out CNN Underscored’s list of the best American Express cards.