Mileage-earning debit cards make no economic sense for banks.
The Durbin Amendment to the Dodd Frank financial reform law signed in 2010 limits the cost to merchants of debit cards. Banks don’t earn very much any more off of debit card transactions, so it doesn’t make sense to ‘pay’ consumers to make those transactions. In fact, buying miles costs the banks more than the fees they earn. So mileage-earning debit cards are almost a thing of the past.
They still exist in a couple of places, such as with Bank of American’s Alaska Airlines debit card (earns 1 point per 2 dollars in spending).
And from Suntrust Bank, which issues the Delta Skymiles World Check Card and offers 1 Delta mile per dollar spent.
All I can fathom here is that Suntrust — one of the few banks that failed federal government stress tests in 2012 — is doing its darndest to incentivize deposit accounts, even at a loss.
I personally have no qualms about holding a Suntrust bank account, but I probably wouldn’t want to exceed FDIC coverage limits in that account.
Delta Mileage-Earning Debit Card Now Open to Everyone
The offer used to be available only to residents of Alabama, Arkansas, Florida, Georgia, Missouri, Mississippi, North Carolina, South Carlona, Tennessee, West Virginia, Virginia, and Washington DC only. Suntrust is strong in the South and Mid-Atlantic.
And while the debit card’s page says it is available in those states, Free Frequent Flyer Miles reported that the account can now be opened online, with the option to list any state of residence.
Apparently the SunTrust – Delta Airlines miles offer for the bank’s debit card (5,000 miles and 1 miles/$1) is now available to everyone in the U.S. and can be obtained online. Today I was able to access an account application online whose pulldown menue for states included all of them.
There’s a 5000 mile signup bonus and a $75 per year annual fee.
Earning Miles for Tax Payments — Cheap
It doesn’t make sense to pay taxes on a credit card just to earn the miles, since the fees for doing so are generally higher than the value of the miles earned.
It can make sense to use tax payments to help you hit minimum spending requirements for credit card bonuses. And it might make sense to use tax payments to help meet spending requirements for certain credit card benefits (if I wanted to stay a Delta elite in 2014 I might put tax payments on a Delta co-branded credit card so I didn’t have a minimum spending requirement in ticket purchases for that status).
But not for the miles.
Debit cards are a different story. PayUSATax.com will charge a flat $3.49 fee no matter how big a tax payment you make. So paying your taxes for the miles does make sense with a mileage-earning debit card.
Bank of America debit cards expressly do not earn miles for tax payments. But the Suntrust Delta debit card does.
Buying Money With Your Debit Card for the Miles
If you don’t have access to Vanilla Reload cards, you can still earn miles with Bluebird.
Many folks like to ‘buy money’ at CVS, load it onto their free Bluebird card, and then use Bluebird’s online billpay to pay mortgage or rent or just have a check mailed to their spouse. Or withdraw the cash from an ATM.
But Vanilla Reloads aren’t at all CVS stores, and those that have them may not be willing to put the purchases on a credit card.
If you can’t find Vanilla Reloads purchasable by credit card, you can still load Bluebird with a mileage-earning debit card at Walmart for free (you can do it online too, but there’s a $2 fee and $100 limit so the economics of that don’t work out).
Loading with a debit card is limited to $1000 per calendar day and $5000 per calendar month, and is a shared limit with Vanilla Reload card funding (so you cannot do a combined $10,000 a month — it’s $5000 total for loads via Vanilla and via debit cards).
Using your Delta debit card from Suntrust means you can earn up to 5000 miles per month with this technique — and it doesn’t even come with the fees that would accompany the purchases of Vanilla Reload cards.
I have a feeling lots of folks beyond the Mid Atlantic will be signing up for Delta debit cards from Suntrust.
My Suntrust card came today along with my new Bluebird card. So far my Suntrust account remains open. Still need the PIN to be able to use as a debit card. Once I get that I’ll try a Bluebird reload at Walmart.
Further update in the saga: And now I get my first communication from Suntrust. It’s an email asking me to fund my account…
@nathan- I had issues with Walmart, not allowing me to load funds from Suntrust Debit card on 3/12/13. I am going to try again tomorrow, but I think they may have put a stop on this. This could really suck!
I haven’t had any load issues as of two weeks ago. I’m going tonight for a load so will report what happens.
I loaded $980 tonight without any problem using my Suntrust debit card.
I did another $990 today.
Wow…you did $980 in one load at WMT? I’ve never been able to load more than $100 at a time, making it worth my time only if I happen to be there. But, I figured out why it was not loading at all…I had hit my $5000 limit for the month, which apparently includes a combined VR and cash.
I’ve done up to $1000 in a single load without a problem. I just mix up the amounts so it’s not an even 1000 every time possibly triggering some check into what I’m doing.. lol
I get back to the US tomorrow…I’ll give it a try!
Suntrust is a total waste of time. Tried to apply online only to get error messages. Called and was told may be system maintenance issues, try later. Tried a couple of days later. Lengthy application process but it goes thru. I get email saying account is open and I should wait for email on funding. Nothing comes so I call in to be told account is closed per “rules and regulations.” What rules and regulations? They can’t tell me – call back tomorrow before 4:30 e.d.t. when that department is open. In the meantime, I get an mail asking me to fund my (apparently closed) account but, when I click the link, it can’t find an application associated with my name. I call again, before 4:30, only to again be told account closed per unspecified “rules and regulations.” I’ll get a letter but rep doesn’t know if letter will be any more specific.
OK. This a new theory regarding Square the credit card swiper for ipads and phones, but I haven’t tried yet. Keep in mind that almost anyone can get a Square account from Babysitters to anyone who wants to accept credit cards for any reason. I have a small business and signed up for Square on Smartphones to take credit cards. Square has a program in which you can pay $275 a month flat rate (cancel at any time) instead of having to pay 2.75% on every swipe. According to their site you can use the flat rate program up to $250,000 a year. After that it reverts to normal swipe fees.
So lets say you sign up for the monthly program and essentially “charge or swipe yourself” $5000-$10,000 a day, then just refunding yourself between a couple of bank accounts and/or credit card and bank accounts. Square usually funds money to an account the next business day after a swipe or purchase. That means in a 20 business day month you can earn 50000-200,000 miles for only $275 Square fee and then cancel? Does that make sense? Also, I am wondering if you are constantly charging yourself or (spouse, friend etc) and you are getting the funds and putting it back and charging again is it legal?
Two notes for folks applying online.
1. I filled out the application online and received an error message telling me to call SunTrust. Despite the error, I later got an email saying my account had been created.
2. I called and confirmed that the account was active the next morning. I chose to fund my account with $100 from my Chase Sapphire Preferred MC, but noticed a Cash Advance fee of $10 a couple days later, so I had to pay off the balance right away to avoid interest charges at 19.99%. The funding max by CC is $100, but it looks like, at least with Chase you won’t be earning miles or making progress towards a minimum spend.
Has anyone had success funding this account with a CC that processes as a purchase?