Debit Cards Earn Miles, Too

Unfortunately, Your Options Are Limited.

April 12, 2000 - For those who insist on earning miles for each and every purchase, there are more credit and charge card options than most mere mortals can keep track of, much less evaluate. The list includes airline affinity cards (AAdvantage Citibank Mastercard, Mileage Plus First Card VISA and Mastercard, etc.), multiple-program charge cards (American Express and Diners Club), and bank cards with travel-rewards programs (Bank of America's Travel Choices Rewards, Capital One's MilesOne, etc.).

The problem with credit and charge cards is their sheer number and dizzying diversity. Since it's expensive and counterproductive to maintain more than a couple of active accounts, consumers face a difficult choice. Which explains why we receive as many "What's the best card for me?" questions. But that's a subject for another time...

What's relatively new on the mileage-card front is debit cards which earn miles for purchases. The good news is that they exist. The bad news is that so far there are only 2 to choose from.

Chase Continental Airlines Banking Card

In February 1999, Chase and Continental launched the first co-branded debit card.

The Chase/Continental Banking Card rewards users with 1 Continental OnePass mile for every $2 spent on purchases. New debit card customers earn 1,000 bonus miles upon sign-up, and additional bonus miles each year upon renewal of the card, which has a $30 annual fee.

Used as an alternative to cash or writing checks, purchases made with the Chase/ Continental Banking Card are automatically deducted from customers' Chase checking accounts. All purchases are itemized on checking account statements to make tracking and reconciling expenses easier. A summary of all miles earned is also reflected on monthly checking account statements, as well as on periodic Continental OnePass statements.

Customers can earn up to 80,000 miles per year including bonus miles.

For further information, or to apply for the card, visit http://www.chase.com or call 1-800-CHASE24.

CompuBank Check Card

Our second contender is a very different animal in several significant respects.

First, to qualify for the CompuBank card, you must open a CompuBank account. If you're married to your current bank, or if you aren't ready for digital banking (CompuBank is an Internet-only institution), this could be a deal-breaker. If not, read on...

Secondly, rather than the airline-specific miles you earn with the Chase-Continental card, the CompuBank card rewards you with ClickMiles. ClickMiles is the rewards currency of the ClickRewards program, and can be converted into frequent flyer miles in 9 airline programs (including those of American and United, but not Delta). The flexibility afforded by Clickmiles' convertibility can be a boon to multi-program participants. On the other hand, if your preferred program isn't among those on the ClickRewards list, ClickMiles are of little value. Note that each airline requires a minimum of 500 ClickMiles per redemption.

And lastly, there's the earning rate itself: at 1 ClickMile per dollar spent for purchases, the CompuBank payout rate is twice as generous as that of the Chase-Continental card's.

You can find out more about CompuBank at http://www.compubank.com/index.cfm, and about ClickRewards at http://www.clickrewards.com.

Is There a Debit Card in Your Future?

Because you must have an account at the bank which issues any debit card, choosing a debit card amounts to choosing a bank. And that, clearly, is a decision of an entirely different order of magnitude than choosing a credit card, which doesn't require any further relationship with the issuing bank.

So in evaluating the Continental card, for instance, you have to go beyond the features and benefits of the card itself and consider whether Chase is the bank for you. And if you live in an area where Chase doesn't have branch offices, it probably isn't.

All of which suggests that there won't be a mileage-earning debit card in most consumers' near-term future. Longer term, if and when more programs introduce their own debit cards, 'debit card miles' may find its way into the frequent flyer lexicon.