Comparing debit cards with rewards

4 October 2016
If you’ve heard of credit cards, chances are you’ve heard of credit card rewards. But what if you don’t want a credit card at all? Fortunately there are debit cards with rewards attached.

Canstar takes you through exactly what they are, and the pros and cons of each type.

We are all familiar with credit card rewards – those enticing flight rewards, cash rewards or merchandise rewards offered via a large number of credit cards. And rewards credit cards are popular: approximately 33% of the thousands of visitor searches for credit cards on Canstar’s credit card comparison tables are for a frequent flyer card, and another 22% are for a general rewards card.

But not everyone wants a credit card – although we surely all enjoy being rewarded! That’s where a rewards debit card can come in handy.

What are rewards debit cards?

A rewards debit card offers a similar type of reward scheme to the rewards credit card – but you’re spending your own money. This has a much lower risk as you are not accruing credit or paying interest on the amount.

Unfortunately, there are barely a handful of rewards debit cards on the market, as they don’t represent a particularly strong reward for banks. But if you are looking for some low-risk rewards, they are definitely worth investigating.


What are the pros and cons of rewards debit cards?


No annual fee.

Unlike many rewards credit cards, most rewards debit cards do not have an annual fee. Many rewards credit cards come with an annual fee which can reduce the net reward return you receive from your spending.

It’s your money!

With a debit card, you are spending your own money – so they are good for those of us who don?t trust themselves to use a credit card wisely.


The average earn rate.

Debit cards can have lower rewards earn rates (that is, the amount of reward you get per dollar pf spending) as well as restrictions on the amount of cashback. This means that they don?t necessarily represent the best value for people who have a lot of expenses to put through a credit card and who can be disciplined about paying their credit card in full each month.

Monthly fees.

While debit cards don’t attract the annual fee that many rewards credit cards have, a debit card may well have a monthly fee instead! Often this monthly fee can be waived, but you may need to commit to depositing your salary regularly into the account.

What debit card rewards are on offer?

Based on Canstar’s most recent Credit Card Rewards Star Ratings research, potential rewards on offer across debit cards are (at time of writing – October 2016) are as follows:

 Card/Account Reward Earn Rate/cash back rate  Fees and Conditions
Qantas Cash 0.28%* No fees when transacting in AUD.
Velocity Passport 0.27%* No fees when transacting in AUD. $1 monthly inactivity fee after 12 months.
Australian Military Bank Rewards Account 2% <$100 (Visa payWave only)

Nil >$100

Must deposit $1,500 each month

to receive cashback and avoid $4 monthly fee.

BankWest Rewards


5 Points per transaction (1.3 cents

when redeemed for cash) + points

earned on account balance

Must deposit $2,000 to waive

monthly account fee of $6.

BankWest Qantas


5 Qantas Points per transaction

(2.8 cents when redeemed for gift cards)

+ points earned on account balance

Must deposit $2,000 to waive

monthly account fee $6.

*When points are redeemed for supermarket gift vouchers

Should I consider credit card rewards instead?


All in all, credit card rewards do seem like a good option when it comes to purchasing a credit card. However, it is important to take into account outliers such as high interest variable rates, and reward limitations when making your decision. In 2016 Canstar rated 169 rewards credit cards across 60 providers.

Share this article