American Express Launches Digital Checking Account Which Earns 1x MR Per $2 Debit Spend & .50% APY

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American Express Checking

Direct link | Press Release

American Express is launching a new digital checking account with no fees or minimums and free Moneypass ATM withdrawals. The account will also come with a rewards-earning debit card (more on that below) and the ability to deposit checks, all with no fees.

The account will initially be reserved for American Express consumer cardholders. Amex already has previously a digital savings account, and also a digital checking account for businesses called Kabbage.

Interest Rate

  • The checking account will pay interest, currently it will offer .50% interest.

That’s competitive with top savings account rates (including Amex’s own digital savings account), a rare thing to find in a checking account.

Debit Card Rewards

  • The account will come with a debit card which will earn 1 Membership Rewards point per $2 spent on the card.

Membership Rewards points earned are the same as those earned on American Express credit cards and can be combined with card points to maximize their value.

The thing that confuses me here is that traditionally there’s never been such a thing as an American Express debit card; prepaid cards like Bluebird run similar to how credit cards run and I don’t recall there ever being an Amex card that comes with a PIN. Perhaps Amex has partnered with Visa or Mastercard to run their debit card? Or perhaps this whole ‘debit card’ is a sham and it’ll function similar to how Bluebird works? I’m not sure.

Update: from the image I added above, it looks like a regular Amex card, so I’m guessing this will work like Bluebird and function like a credit card.

Our Verdict

This sounds like one of the best digital checking accounts out there as checking accounts rarely earn any interest at all. The added benefit of getting 1 point per $2 spent on the debit card is also quite interesting – even if they exclude PIN-based transactions from earning points (I don’t know if they will or won’t), it still will be very lucrative for things like paying taxes. For example, you can pay a $10,000 tax bill and earn 5,000 Membership Rewards points for a small fee of just $2.55 with PayTaxUSA. As noted above, we still need to confirm that the ‘debit card’ is truly a traditional debit card before fleshing out how it’ll be useful.

I’m doubtful the debit card will function as a debit card at all. The only usefulness I see in the rewards angle is for someone who refuses to use a credit card, this could be an interesting starter account for them to get into a normal credit card rewards program.

Regardless, the interest-earning checking account is still an interesting development.



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