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How Online Banking Reward Programs Work


Online banking rewards programs are designed to encourage bank loyalty.
Online banking rewards programs are designed to encourage bank loyalty.
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Imagine that paying your electric bill could help you save toward a new television. It sounds a little crazy, but it's true: Online banking reward programs are an excellent way to turn everyday spending into savings or to help boost your bank account balance.

As online banking grows as an alternative to brick-and-mortar banking -- where a customer writes checks to pay bills and visits a local branch to make deposits -- banks are eager to encourage customers to make the switch. Banks benefit from lower transaction, delivery and administrative costs, while customers enjoy easy access to their accounts, as well as tools that make budgeting and managing money easier.

Online banking reward programs are designed to encourage bank customers to use online services and to reward them for their loyalty. There are two types of online accounts referred to as rewards programs: those that offer points-based reward programs similar to an airline or hotel rewards program, and those that offer higher interest rates to online customers who meet certain requirements.

Popular points-based rewards programs offer incentives to use online services to pay bills and to make both routine and special purchases. Rewards points are given for many different types of expenditures, ranging from household utilities, gas and grocery charges to clothing, electronics, entertainment and travel.

For every dollar spent, account holders accumulate rewards points. Usually, one to two points are awarded for each dollar spent, depending on the terms of the program. Some programs offer double points during promotional periods or for everyday purchases like groceries, gas or fine dining. The rewards points can be used for your choice of cash back as a credit to your account, or air travel, gift cards and certificates, merchandise and more.

Today, most banks with an online presence offer points-based banking rewards programs. Bank of America, Wells Fargo, Wachovia, JPMorgan Chase, and SunTrust are a just a few well-known banks offering these programs.

To learn more about how you can enroll in an online banking rewards program and start earning points for everyday spending, read on.