US Fed cap causes beginning of the end for debit rewards
As a product, debit has always had to play second fiddle to its richer sibling, the credit card. 
The merchant charges for debit are usually lower for debit, but in the US there has been an additional fee difference, with signature debit costing considerably more than PIN debit.
This has made it possible for debit rewards to operate, but moves are afoot for UK issuers to close their debit programmes due to Federal Reserve limits on how much they can earn from checking accounts.
As from February 8, Chase says it will close off enrollment for its debit rewards. The program will only continue for those who are already enrolled as of that date.
As part of the sweeping financial overhaul last year, the Federal Reserve has proposed a cap that could slash the billions of dollars in fee income for banks by as much as 70 percent. The Fed is still accepting comments, but a cap on the fees is expected to go into effect by this summer.
Analysts say the reduced profits will prompt banks to end or curb their debit rewards programs. Now Chase is doing just that.
Bank of America, Citi and Wells Fargo, which are the other major card issuers in the US, say they haven’t yet decided on any changes to their programmes.
How the Chase programme works
The rewards programme is free and open to anyone with a checking account.
Cardholders get 1 point for every $5 spent, but there’s no cap on earnings.
A redemption of 5,000 points would t herefore earn a $50 Macy’s gift card, requiring a spend $25,000 for that particular reward.
Those who want to rack up points at a faster rate can pay a $25 annual fee; that enables you to earn 4 points for every $5 spent. At that rate, you would need to spend $6,250 to get the same gift card.