Earning miles and points on everything you do should extend to your checking account if possible. For a long time I have loved debit products like the SunTrust Delta Debit card, and the BankDirect mileage-earning checking account. It offers a rare opportunity for those who have challenged credit or otherwise limited from earning through credit card sign ups; mileage-earning checking accounts are egalitarian. But it was time to close my BankDirect account and here is why.
In Love With The Concept
I have previously written about my love of earning points through checking accounts. I’ve held the SunTrust Delta debit card and loved it until that came to an end (I earned more than 120,000 points with the account). I’ve held the Citi Gold Checking account twice (earning 80,000 miles in total), and then BankDirect’s Advantage Checking account. It’s therefor surprising that I reached a decision to close my BankDirect advantage mileage-earning checking account.
I also recently discussed leaving the Citi Advantage Executive credit card, and while this may appear to be part of my overall exodus from American Airlines generally, the decision to close the two are related only in that they no longer offer value for the price paid.
Benefits of the Account
When signing up for a new account with BankDirect they encourage account holders to try out a variety of ways to earn points through the account. Here are some of the draws to the account:
- Sign-up bonus
- Activity bonuses
- Ongoing Mile accrual
- Personal service
Between the initial sign up bonuses and activity bonuses, new account holders can earn 25,000 or more points without maintaining significant cash reserves in the account. An unanticipated benefit of working with BankDirect is that they operate as a pretty small bank, it felt personal. Several times, phone agents looked up my account using minimal information and they were all really very kind.
Why I’m Closing My Account
In theory, a smaller more personal bank experience is really attractive to me. After dealing with Bank of America’s horrendous customer service system (for an Alaska Airlines bonus that was never paid), a smaller bank is incredibly welcoming. But smaller banks also have their limitations.
One of the biggest issues I had with the account was regarding travel notices. My debit card was useless on the first day abroad during a trip. My card would be shut off and the cash withdrawal function disabled regardless of whether I called in or not which meant that I had to maintain other checking accounts as a backup. You shouldn’t have to maintain two cards because one is so consistently useless. It reminds me of my father’s advice about purchasing a Jaguar (neither of us have ever owned one) “You might as well buy two so that you have something to drive while the other is in the shop.”
Usually when this happens (and it does happen occasionally at other banks too) a quick call to customer service will rectify the situation. Sadly, for almost the life of my account customer service was available by phone from 8AM-7PM central, Monday through Friday. If you had the unfortunate luck of landing in Asia on a Saturday morning you might not have cash available to you until Monday night (Asia time) when BankDirect customer service opens. That’s horrible and it’s left me in an undesirable position many times. I have mitigated that risk by keeping another account but it’s not something I want to do and shouldn’t have to do with technology available today.
The account isn’t free, you’re trading cash for miles. The monthly cost is $12/month or $144/year. Mileage earning is based on the average balance over the month at a rate of 100 miles per $1,000 held in the account. To break even on the account (based on my valuation) you need to hold $7,500 or more in your account on average. To get maximum value you can hold up to $50,000 in your account to maintain the same earning rate. If you generally keep that kind of cash in your checking account it may work great for you. For me, I would prefer to place my cash elsewhere and find ways to earn small amounts of miles rather than pay for this account and effectively buy them.
How Was My Experience Overall?
The BankDirect experience was a mixed bag. They upgraded their technology during my period of holding the account for about two years and that was a net positive effect. But relics of the old tech still hinder simple issues with bill pay functionality. It was great to have a small bank with genuine people who care about your experience with the brand (unlike the unfeeling robots at Bank of America). But it was terrible to be left out to dry for days on end because they couldn’t staff a call center or provide even email support. (I also left a voicemail over a weekend asking to close my account and several days into the week I never heard back and had to call in again.)
If you are storing lots of cash in checking accounts as more or less a savings account to buy American Airlines miles at a discount, it might be a good fit for you. If you are looking for anything else out of your bank, you should probably look elsewhere.
Have you tried a debit account that earns miles? How has your experience been?