Last night I opened a PerkStreet account. It took me less than 20 minutes from beginning to end. And that included a call to customer service to ask about a funding question.
It was definitely a different experience because I could fund my account with a credit card (up to $500) with no credit card processing fee. I guess PerkStreet typically charges 2.5% if you fund your account with a credit card (because the credit card companies charge a fee to process the transaction). But with the initial funding PerkStreet eats the fee.
My question for customer service was how the transaction was processed – as a credit card purchase or cash advance / ATM transaction. The woman on the phone was helpful (the prompts were a bit complicated and, to tell you the truth, I was distracted so it might have been me…. but I just hit good old trusty “0″ and got a live person right away.).
The reason I asked is because a credit card purchase gives me the normal grace period, so I can then transfer money from my other checking account right away to pay off the amount and never pay interest on it. But if it’s a cash advance / ATM transaction I pay interest right away. The woman assured me it was a credit card transaction – “just like if I were buying a pair of jeans” I asked. “Exactly,” she replied. Score!
This was also a great “score” because a few weeks ago I got a letter from my Visa card saying something like:
We notice you haven’t charged anything in a while (it’s been over two years). We want your business back. So we’ll give you 10% cash back (yes – 10%, can you believe it?) on all purchases through September 30.
So just by charging the $500 initial deposit I scored $50 cash back from Visa.
I’ve never heard of funding a checking account with a credit card, so I was (and still am) a bit skeptical. But I was raised right outside of Boston, spent 7 college and grad school years in Boston, spent one year in Los Angeles (during undergrad), lived and worked for five years in New York and spent the last year living in New Jersey, but still working in NYC. So, yeah, I guess I’m a bit skeptical by nature.
After the funding page, I submitted the application and received an e-mail confirming the contact information and saying the following:
We are currently processing your application and will contact you within 2 business days to notify you of the status. Once your account is open, we will begin processing your deposit and send you an email with the subject “Welcome to PerkStreet Financial – Important Login Information”.
That’s it, so far. I’ll keep you posted.
In case you’re wondering, this is how the Step Away from the Mall “PerkStreet Project” (my name) came about:
Exactly one month before I opened the account I discovered Clark Howard, who was talking about a new bank with a rewards debit card by PerkStreet. I wrote a post about how I thought it was a pretty good idea – especially for those folks who have a hard time managing credit cards, but “just can’t” give them up because of the rewards. PerkStreet sounded like a great alternative.
A few days ago I commented on a post at Budgeting In the Fun Stuff. The comment right before mine was PerkStreet Jen. I referenced my love for the Boston Red Sox in Yankeeland and PerkStreet Jen came back with a Go Sox! So I was sold! (Just kidding, of course. I had planned to open an account, but other things were prioritized).
An hour later, PerkStreet Jen commented on my post and offered to donate $100 to the Financial Literacy Foundation (in my name, but that’s not as important) if I blogged about the experience with PerkStreet. I got in touch with her and she assured me that they wanted an objective review, not a “company man” advertisement (which would have been a deal breaker). With that, I was sold. I’m a big fan of financial literacy, as you probably could tell by now.
So that’s it. I’ll give PerkStreet 12 months to earn my business on a more permanent basis. I’m sure there are some pros and cons, as there are with debit v. credit cards (and banks) in general. The one thing I did notice about PerkStreet is they do not have a “live chat” customer service option. I wish they did. It saves me time and I prefer to just type my question and get a response. Plus I can print out the conversation and remember exactly what happened, so there’s no “gotcha” down the road.
Also, the credit card I use gives me an automatic extension of certain warranties, car insurance and other perks that I don’t think PerkStreet offers because their card is a debit card (I’ll confirm this). So when I want one of the credit card perks I’ll still use my credit card.
Also, my credit cards have rolling 5% cash back categories. So I’ll make purchases in those categories with my credit card. But with normal, everyday purchases outside of a special promotion that I don’t care about the credit card perks I’ll probably go with PerkStreet.
With this plan I’ll get great rewards. And it will help my credit score because my credit card balances will be that much lower (This will improve the credit-utilization ratio.). They’re already pretty much nonexistent, but it can’t hurt to improve it even more and not lose the rewards. For some folks it can be a good boost to your credit score. I’ll keep you posted.
NOTE: I don’t work for PerkStreet. I may guest blog for them on general personal finance topics in the future, but not as an advertisement for PerkStreet or anything like that. I have an independent mind. I have an objective mind. And my opinions about personal finance and PerkStreet will not be influenced by anything other than my life experiences and personality.
But I heard of their rewards checking and thought it was a great idea, so I’m trying it out. I’ll test it out and let you know what I think. And some kids in D.C. will have $100 more financial literacy education as a result. Win, win.
So until next time, put your credit card down and slowly step away from the mall!
Image: cooldesign / FreeDigitalPhotos.net
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