Chase Limits Popular Debit-Card Rewards Program

Starting this week, J.P. Morgan Chase will no longer allow banking customers to enroll in its debit-card rewards program, in the latest move by big banks to cut back on perks and freebies in the wake of new financial reforms.

Chase said it will stop new enrollment in the program as of Feb. 8th. The program will continue for current members, though card-industry watchers believe that this is the first step toward banks eliminating debit-card rewards programs entirely.

Chase’s debit-card rewards program is free for account holders already enrolled, and cardholders get one point for every $5 they spend. (If you pay an annual $25 fee, you earn four points for every $5.)

Why the sudden stinginess? Banks could lose up to $25 billion a year in revenue due to changes in payment regulations brought about by the CARD Act legislation, according to a recent study by The Boston Consulting Group. Chase, Bank of America, Citigroup, and Wells Fargo have already eliminated free checking in response.

Card-data tracking site CardTrack said the move by Chase to limit enrollment in the program is “sure to usher in similar moves by similar issuing banks, such as Bank of America and Citi, and smaller operations such as Key Bank and First Niagara.”

If you’re still interested in enrolling in a debit-card rewards program, you may not be out of luck. Consumer banking website MyBankTracker notes that since the new fee rules affect banks with assets of more than $10 billion, smaller banks and credit unions will more than likely retain these programs.