Bank makes credit key to rewards

September 20, 2011|Bloomberg News

NEW YORK - Bank of America Corp. is urging some brokerage clients who want to keep their debit rewards to switch to credit cards.

Customers who have the Visa Inc. signature rewards debit card linked to their brokerage accounts will no longer earn rewards points after Nov. 15.

They were invited to apply for a Visa signature credit card and earn a one-time bonus of 25,000 points if they make retail purchases totaling at least $1,000 by Feb. 28. They will also get double points for purchases made within 90 days of creating the credit-card account if opened by that date.

Charges made with the debit card are generally deducted from the brokerage account at the end of the month, not at the point of sale.

The Federal Reserve capped debit-card swipe fees at 21 cents starting Oct. 1. It will let issuers tack on five basis points, or 0.05 percent, of each transaction, or almost 2 cents based on the average debit purchase of $38, and a conditional 1-cent adjustment for lenders that follow certain fraud-prevention standards. The cap replaces a formula that averages 1.14 percent of the purchase price. Swipe fees for credit cards are not regulated.