Posted by Chuck on June 5, 2017
Checking Accounts

Published on June 5th, 2017 | by Chuck

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Northpointe 5% Checking Adds Restrictive Language Regarding Debit Card Usage

Northpointe Bank offers a rewards checking account with a 5% APY on balances up to $10,000. There are a few requirements necessarily to get the rate, chiefly the 15 debit transaction requirement. Previously, they required that the 15 transactions total $500, then they removed that requirement last month.

ReadNorthpointe 5% Interest Checking Account on Balances Up To $10,000

Today, Northpointe added language in the terms indicating that the 5% rate is only for those who use the debit card in an ordinary manner, not those who do so specifically for meeting the requirement. They reserve the right, at their discretion, to convert your account to another account or to close it if this requirement is not being met.

The new terms are in effect as of today for new accountholders, and will go into effect mid-July for existing accountholders. Email and mail notices will be sent out as well.

PDF Link (page 19) –

Purpose and Expected Use of Ultimate Checking Account

The Ultimate Checking account is intended to be the accountholder’s primary checking account in which payroll transactions and day-to-day spending activities including but not limited to grocery, gasoline, apparel, shopping, dining, sporting and entertainment transactions are posted and settled. We expect the account’s debit card to be used frequently throughout each month and for transaction amounts to reflect a wide dollar range. Small debit card transactions conducted on the same day at a single merchant and/or multiple transactions made during a condensed period of time, particularly near the end of a statement cycle are not considered normal, day-to-day spending behavior. These types of behaviors appear to be conducted with the sole purposes of qualifying for the account’s rewards, and thus will be deemed inappropriate transactions and will not count towards earning the account’s rewards.

 

Northpointe Bank reserves the right to determine if the account is being maintained for a purpose other than primary, dayto-day use. Accountholders who persist in making debit card transactions in a calculated and limited fashion in order to meet their monthly qualifications may have their account converted to a different checking account or closed altogether. We also reserve the right to convert the account to a different checking account if the Ultimate Checking account does not have consistent, active use of three (3) consecutive statement cycles.

 

We have the right to close this account at any time, with proper notice. Our decision to close the account will not affect your existing obligations to us, including any obligations to pay fees or charges incurred prior to termination. No deposits will be accepted and no checks will be paid after the account is closed. Upon termination of your Ultimate Checking account, any optional add-on products or services associated with this account will also be terminated at the same time.

It’s not surprising that they’ve added the limitation as it seemed too generous without that. I just wish there’d be some other sort of way to meet the requirement, such as bill pay activity and the like. I’d be willing to switch over my ordinary checking account to Northpointe which would result, often-times, in balances far greater than $10,000 (which would then be profitable for the bank). But I’m not willing transfer my ordinary spend from credit to debit since in the end I won’t be gaining from the high APY due to the loss of credit card rewards.

Since the previous requirement was to spend $500, we can venture to guess that $500 is ‘enough’ to satisfy the debit requirement. If you’re putting spend on a 2% card, you’d be losing $10 per month or $120 per year, and still netting a 3.5-4% APY on your money (after deducting the opportunity cost) which is still very good. Main question is how much effort you’re willing to put in for the gain and how easy it is for you to spend that amount (lots of us have most of our spend going toward minimum spend requirements or in bonus categories, etc.).

[Update: According to a bank representative in the comments, the main thing is to use the debit card 15 on varying dates, charge types, and amounts. You probably won’t need $500 in purchases, but will need to use it consistently throughout the months at various retailers.]

See also Best High Interest Savings Accounts for more high-yield options.



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bad move…. It’s ok to make the rule of $500, or whatever else amount, but to come out and say “at our discretion” gives no clear expectations. EVERY reward checking account out there has very clear rules and limits. This is very very disappointing to say the least.

I don’t understand why these guys can’t make up their minds about this and keep changing it on customers, and not they have clearly demonstrated that with no amount of data points, they still can’t make up their minds so they will leave it open to “their feelings”.

wow just wow.

Agree. Flip flopping policies is a terrible look and is not the way to gain trust

I agree, and wishing I hadn’t opened the account in the first place. Waste of a Chex pull. I don’t feel comfortable using the account as my daily checking anymore because they could just determine I’m not spending enough, at their discretion.

Agreed, this is ridiculous. If they can’t be bothered to tell us what the rules actually are, then I won’t be bothered to keep any of my money there.

Reminds me of the craziness RingPlus (the budget cell carrier) pulled when they were on their way out.

Just opened this account and want to make it my primary checking. But I don’t use a debit card. I would think no one on Doc uses a debit card.

I am now nervous to switch over employer direct deposit and all my CC auto-pays. I don’t want to deal with the pain that comes with having to switch everything back and or deal with rejected payments and deposits. Bill, if you’re reading this, please make this requirement easier. You will gain lifelong customers!!

Had I not already switched my DD, I wouldn’t do it now. Unfortunately for me I’m just passed the bait & switch part, already switched all primary banking & pushed the money to Northpointe.

@FreequentFlyr made a good point on Twitter abt looking at Consumer CU as an alternative (https://www.doctorofcredit.com/consumers-credit-union-5-07-apy-on-up-to-20000-rewards-checking/), requirements seem reasonable–and clear & steady–for getting 4.9% on up to $20K, including a card + Equifax hard pull. Unlimited ATM refunds worldwide also makes tthe Consumer CU debit card a great travel companion. I was planning on opening this at some point anyhow, might now do it a bit sooner if they are sensitive to new credit card accounts (for the credit card approval part). If they also take MO it would be even better, though not a must-have.

Culinarykid92

CCU doesn’t refund ATM fees worldwide, just in the US. I know because I asked them when I was interested in the account. I soon after decided I would go to Synchrony Bank for a fairly high APY that is no hassle without a cap. That and the bank is well established and I have cards with them.

That’s what he had said, was probably mistaken, thanks for clarifying. I will keep my Alliant accounts open no matter what, I know they do reimburse $20/month including international charges, that is plenty for practical reasons I think since most ATM operators abroad don’t charge fees and I rarely do ATM withdrawals domestically.

Bait and switch. Totally predictable

Since I know that Bill from Northepointe regularly interacts here, I hope he sees this comment — this is not how a professional bank interacts with its clients. Lay out clear, consistent rules that customers can understand and stick by those. Want $500 in spend per month? Say so! Want transactions at 10 different merchants per month? Say so! Cut out the arbitrary terms like “expected use” and “calculated and limited fashion” and set some simple rules that customers can deal with.
I was in the process of converting over to using this as my primary checking, but I’m not going to bother at this point — I have no interest in dealing with an operation that wants to play with secret rules.

exactly, I’m not going to live in fear that my account will get shut down for “limits” I’m an unaware of. To me $15 of debit card might be normal spend to another $10k might be normal spend.

This is not a fraud typology that you need to keep secret, this is supposed to be a “rewards” checking.

Northpointe Bank…where we reward you by closing your checking account without you knowing why!

Great motto!

Nothing to worry about, if Northpointe Bank ever decides to fuck with the customers, I will personally get a bunch of us guys here over at DoC and simultaneously file a CFPB complaint against these guys. Imagine a small bank with 100 employees suddenly getting 30+ complaints – I’d imagine a huge waste of time and possibly a deep review by the Feds for the sudden spike in negativity. Let’s just hope if they cancel an account that it’s not sudden or random.

Orrrr how about we don’t threaten a bank that’s offering a very generous interest rate and simply doesn’t want people abusing that generosity? They don’t OWE us a 5% rate; they’re choosing to reward customers who use the account for its intended purpose. And if it’s in their terms that they can cancel accounts at any time, then it’s well within their rights to do so.

Nothing was changed here. All that was stated was essentially them saying “If you abuse it, you will lose it.” Just like EVERYTHING ELSE ever posted on this website.

There are just so many cry babies on here.

Well said. Anyone who wants to defend Northpointe needs to read what you wrote. The fact that Bill knows the DoC customer profile and made changes this soon after implementing their new account is even more concerning about the longevity of this account even for those who use it as a daily driver.

It’s “arbitrary” because every person uses their accounts in different ways. They want to accommodate both small spender and big spenders.

Well, that didn’t take long.

What do you expect? I guarantee you if I got a credit card with northpointe and got in on this checking deal, and did only 20 debits, they wouldnt restrict me…….. gotta show some love somehow. Thats what I do now with my current bank which offers 5.01% on 5k, lets you have TWO accounts, so its really 10k, so 20 swipes total, plus they have a 8% interest CC with no bt fees. It is illinois only, can apply online, but restricted to certain counties. However it says they will make exceptions.

“Since the previous requirement was to spend $500, we can venture to guess that $500 is ‘enough’ to satisfy the debit requirement.”

So every new customer who doesn’t visit sites like this and doesn’t know the history of this account who will be a light user of their debit card will get their accounts shut down and closed without any warning. And if they do get a warning, it still won’t have a limit but the verbiage of “hey we told you to use it normally”, and the average person will be like WTF is normally? I used it 15 times for a sum of say $100.

This is just bad customer service and will not lead to high retention percentages. Once again you SET LIMITS if that is what you wish.

“It’s not surprising that they’ve added the limitation as it seemed too generous without that.”

I’d say it is unpleasantly surprising for everyone who opened a new account assuming Northpointe’s A criteria for the 5% rate to now have to comply with criteria B or else. After all, it was Northpointe who set up said criteria A, I’d venture to say knowing that a lot of people would do just what now Northpointe says doesn’t qualify for 5% rate (many small debit transactions), being they advertised it on this blog and seeming to have a good idea of what a lot of this blog readers do with similar accounts.

Just a month ago I expressed my reluctance to open a Northpointe account and switch my primary banking to it fearing a bait & switch type of change once they got lots of new accounts: https://www.doctorofcredit.com/northpointe-5-interest-checking-account/#comment-399050

I guess I had waited a bit longer than a month to jump in, but oh well, I already did now and I do plan to use my Northpointe account as the primary CHECKING–not credit card–account. I don’t mind doing some debit transactions but the vagueness of the terms and the hassle of having to maintain not just a dollar amount but also a number of debit transactions might just make me let it be/disqualified & go back to Alliant as my primary checking/savings + open one or two more 4-5% accounts from Insight and other credit unions, especially since some of them seem to be OK with a significant level of MO deposits (kinda killing two birds with one stone).

Why did you ignore my follow up question about Mango in the other thread?

That is so US Bank of them. They gave a great offer and now they nerfed it!

The offer still stands. They are just formally telling you that you can’t abuse it. Use some common sense.

It’s a checking account, not a stealth savings account so no real surprise.

The error was not keeping the former requirements and just simply increasing the rate cap from $5k to $10k.

Agreed. I mentioned this in my very long comment below. Their Ultimate Account was already the #1 rewards checking account in America at 5% APY on $5,000 with 15 debit transactions for $500. As a customer, I felt like that was a great deal. As a business, I’m assuming they weren’t struggling to stay afloat at that rate; otherwise, they wouldn’t have doubled the cap and removed the restrictions.

While I was certainly happy to see them one-up themselves, it was a mind-boggling move in my eyes. They were already ahead of the rest of the competition, so I don’t know what prompted them to make that change. If I had to choose between this “better” account that can now be shut down arbitrarily for “unusual spending activity”, or the previous account with the lower cap/higher restrictions, I would *much* rather have the latter.

They did it to attract more customers I would presume. They probably didn’t anticipate the majority would just do the bare minimum to get the good rate. Of course since Bill has visited this blog several times in the past he shouldn’t be surprised.

When I saw they were raising it to 10K I thought for sure the terms would be more restrictive (ie $750 spend and/or 20 transactions). I could see this issue coming a mile away.

I’m sure they’ll be very excited to hear from the CFPB when customers complain about their closed account with out clear reason.

I’ll be the first to educate people on their social media on how to go about filing a CFPB complain if they post about their account closure.

There is a reason banks are held to high standards of clarity and disclosure and not based on someone’s feelings in the bank office. lol

joE, I responded to your comment above before I read this one, and I’m pleasantly amused and smiling that we think so alike 🙂 Perhaps we should put that on their Twitter/FB/other social media pages

very good idea about CFPB thank you!

Don’t other reward checking accounts have similar ambiguous language? Did you complain in those threads too?

they sure don’t, look it up yourself.

Yes, this change was guided and approved by FDIC (our primary regulator). It’s also in line with disclosure verbiage used by 200+ other financial institutions that offer Rewards Checking Accounts (note: I’m aware of 650+ FIs with RCAs so many but not all use similar verbiage).

I said “other”. I didn’t say “all”. This means that even if 1 other reward checking account has similar language I would be correct and you would be wrong.

I certainly will not be looking up the hundreds of different reward checking accounts to prove I am correct. I know for a fact that I saw similar ambiguous language about “everyday spend” on the terms for a couple of reward checking accounts that DoC has posted about.

I remember it well because it scared many people away. Maybe you didn’t read those threads but they do exist.

LMCU does not. They require 10 debits only and don’t have threatening or abusive language or pull bait and switch on their owners (I use owners instead of customers since it’s a credit union). If you max the $15,000 deposit and earn 3% per year, that’s $50 less than NP Bank, but with the possibility of opening 3 Insight accounts and can just leave it there to earn 5% interest, NP could go to hell and it wouldn’t make much of a difference. I’d say the only disadvantage is that your interest is paid-out quarterly but it still accrues daily.

Calling the CFPB in this case is just a waste of taxpayer dollars. Your entitlement to gaming the system is something made up in your mind. You aren’t entitled to abusing the system – you can sure game it until it doesn’t work. Just like Redbird, Bluebird, Chase pre-5/24, BOA 8 apps in a day, etc.

Quit acting like you are entitled to everything in life.

not going to waste my time with you as you’ve trolled the replies here and don’t understand the basic concept of banking regulations and disclosures. not everyone games like you by visiting sites like this.

They cleared it with regulatory authorities before adding it.

Yes, this change was guided and approved by FDIC (our primary regulator). It’s also in line with disclosure verbiage used by 200+ other financial institutions that offer Rewards Checking Accounts (note: I’m aware of 650+ FIs with RCAs so many but not all use similar verbiage).

200+? Show us one reward checking FI that DOES NOT spell out minimum spend requirements BUT at the same time has similar verbiage where they go on and on about how “inappropriate transactions” will not be acceptable.

Make sure however that you don’t confuse fraud, AML/OFAC verbiage with rewards checking transactions. Show me one FI that goes on and on about how one should use their debit card but at the same time gives zero guidance on the dollar amount.

I or the CFPB don’t care if 90% meet your hidden requirements. Out of the other 10% not all are wanting to “just” meet requirements. There will be light users, I’m not going to make this in to story time and give you examples of who is a light user. You are making a blanket statement that “light” user accounts will be changed or terminated. Just goes to show it’s not the customer you care about but the banks profitability and that my friend is what the CFPB cares about. FDIC might have approved your disclosures, but they don’t care about customers being treated “fairly”.

CFPB: “We are the Consumer Financial Protection Bureau, a U.S. government agency that makes sure banks, lenders, and other financial companies treat you fairly. ”

So when CFPB comes in and asks for a sample of all your reward checking customers you better pray to God those 10% you closed are not low income minorities and that 90% you kept open are affluent people who are “big spenders” to keep your reward checking profitable.

Bill, this was food for thought and no need to reply bud. We’ll have to agree to disagree.

Cheers!

Kasasa (fka Bancvue) has this exact language, sadly.
I looked at one credit union, and it sounded really great until I read the fine print that I was handed at the end of the interaction. There’s even some fine print that one can only have one Kasasa account per SSN.
Santander and Wells offer options where the account can be free with a set of transactions, but they don’t limit what “counts”.

Wow. To think that I referred a bunch of people to Northpointe and said how great they were. In reality, it’s clear a bunch of unqualified, indecisive children operate this bank.

are they cursed to always have two restrictions? just $500 or just 15 not good for them?

This is exactly why I didn’t open an account there last month when I was looking for a rewards checking. I saw the changes and read all the information from last month and figured it would change again. This is actually kind of worse than I thought it might be as it’s not really clear as to what they want. I’d say the $500/mo is a good guess, since that’s what they had as a rule before.

This should not be a guessing game. The average customer who doesn’t read boards like this doesn’t have to receive a letter saying your account was closed because of some hidden limits you did not meet/know about.

Most of those “average” customers will easily fit their profile. They likely will be using their debit cards for multiple transactions throughout the month. They know they are signing up for a minimum of 15 – and will be using for at least 15 “average” daily transactions. Gas, groceries, and a couple meals for most people will already come close to the minimums, plus some daily transactions. It will be clear who the gamers are without much work. Don’t kid yourself – you’re not that clever JoE – despite the cute case sensitivity.
You know exactly what you’re doing, and what your risks are.

Hi Joe,

Help me understand what’s hidden here – the new terms are in the disclosures for all new account holders, are being sent via email or mail to all existing account holders and we’re going so far as to hop on forums like this to help further communicate and clarify the change. I’m open to hearing other suggestions for how we could increase or improve communication around this.

Best,

Bill Clancy, Northpointe Bank

What’s hidden is that there are clear provisions in the terms for Northpointe to arbitrarily deny benefits, despite someone meeting the stated account activity requirements with their genuine spending. Why does my daily $1.75 trip on the subway not count as day-to-day spending? Since I live next to a grocery store, I typically buy just about $10 worth of food every few days, is that a wide enough dollar range for you?

What’s bothersome is that you leave these ambiguities in what are supposed to be crystal-clear terms. There are real people with real spending behavior out there, who would qualify on paper for this account and benefits, but sound like they might incur your ire and get shutdown.

Easy on the common sense artgriego, remember this a for profit organization not a for people organization and no matter how many rules and regulations we pass, they will find a way to get around them, ok ok meet them.

But when people like us try to meet their rules, 15 transactions and beg them for more rules then all the sudden we become a threat.

So we can either move on and not waste our time/breath on these institutions or open an account, let them close it and finally let an organization like the CFBP be the judge who was in the right or wrong. I know which route I’m going 🙂

@DOC. This is the first instance in my knowledge where doctorofcredit promoted a financial institution and then the financial institution backed out. I guess the lesson is financial institutions cannot be relied upon period.

I don’t think DOC has ever promoted any financial institutions. This site basically just displays all the facts, T&C, requirements about bank bonuses, and let the readers themselves to decide what to do. If this is “promoting” then we can say CNN is promoting terrorism because all the news they broadcast about London.

DoC had an exclusive sign up bonus with NP last year (I believe). Bill from NP was active in comments, answering many questions and dodging others. Regardless, DoC isn’t responsible for anything here.

Anthony,

If I missed a query from you, please re-post. It’s obvious we sit on opposites sides of the fence on this issue but I’ll continue to be open and respectful to hearing your opinions on the matter.

Respectfully,

Bill Clancy, Northpointe Bank

It was comments by others in the post(s). I’m not a NP customer, although I was close to signing up.

My only issue here, echoed by others, is that there isn’t enough transparency with new T&C implemented after the fact.

I’ll always believe that any business can do what is in their best interest, even if means turning away customers or changing T&C. Doesn’t mean customers will like it, but it’s a free market and both sides can make their own decisions.

Like with people, being transparent and up front is all we can do and that’s the area where we’ll just have to agree to respectfully disagree.

Have you ever heard of Seacoast? There are other instances too but the names don’t come to mind.

First, I pretty sure DoC put in the warning right at the beginning of that old post about the terms may change in near future.
Second, I don’t think it is a promotion when DoC does not receive any kind of incentives from the bank. (In fact, they gave up on the promotion to get us reader better deal last year)

That’s incorrect. What you described is a “paid promotion” to which Will does not ever participate in. This was just a normal “promotion” like many blogs and websites do every day.

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