If you’re looking for an alternative to the Citibank AAdvantage Debit Card, see my post about banking with UFB Direct.
(Update: Even Megan McArdle, the senior editor for The Atlantic, is unhappy that Citibank is discontinuing the AAdvantage Debit card. And while people aren’t taking to the streets over the issue, someone decided to start a Facebook page in an effort to save the card.)
New Federal Reserve regulations take effect October 1 limiting the fees that banks charge retailers for processing debit card transactions. As a result, Citibank has decided to discontinue the AAdvantage debit card:
After December 9, 2011, Citibank will no longer offer the Citibank AAdvantage debit card rewards program. Here are some other important things you need to know:
• You will retain the American Airlines AAdvantage miles you’ve already earned, provided that once every 18 months you: (i) redeem AAdvantage miles; (ii) earn them on Amerian Airlines, American Eagle, or the AmericanConnection carrier; or (iii) earn AAdvantage miles with an AAdvantage participant.
• In November, you will be sent a new debit card to replace your existing Citbank AAdvantage debit card. However, this will not impact the debit rewards you earn through December 8, 2011. Your debit card number and PIN will not change
• Customer who paid the Citibank AAdvantage debit card rewareds program annual fee will receive a prorated credit to the checking account in December based on when the fee was paid.
I use both my Citibank AAdvantage debit card and my Citi AAdvantage credit card to earn miles. While I can still earn miles with my credit card, I like also having a mileage earning mechanism associated with my checking account, so I’m disappointed to see it going away.
So now it looks like the only option for earning miles with your checking account is to open an account with Bank Direct. I’ve been planning to open a Bank Direct account to take advantage (no pun intended) of their 21,000 bonus AA miles offer, but just haven’t had the time to do it yet, so now I’ve got another incentive to make the move.