San Antonio-based USAA Bank will eliminate its debit card rewards program in a move it says will offset projected revenue losses from federally-capped debit interchange fees and allow the bank to maintain more popular perks such as free checking accounts and ATM fee refunds.
The announcement comes a week after the Federal Reserve Board issued its final ruling on debit card interchange fees, which caps the amount banks and issuers can charge to between $0.21 and $0.24 per transaction. In a release to its customers, USAA said that it uses interchange fee revenue to provide customers with free checking, ATM fee refunds and debit rewards. In eliminating debit rewards, the bank will keep the benefits its customers value most.
"We carefully considered all options and surveyed members when we began assessing the financial impact of the provision," said David Bohne, USAA Bank president. "USAA's survey found that members favored free checking and ATM fee refunds over debit card rewards. Based on this feedback, we decided to stop the debit card rewards to maintain the other benefits."