Chase Revives a Durbin Casualty: The Disney Debit Card

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JPMorgan Chase's Disney debit rewards card was one of many that banks eliminated after regulation led to a slash in debit interchange revenue. Now the card is making a comeback — with a few changes.

The New York bank axed its original Disney debit card just two years after its introduction. The new card, announced today, features discounts from its cobrand partner for merchandise and travel purchases instead of points for each dollar spent.

"Chase discontinued offering debit card rewards programs in 2011 as a result of the changes to debit card economics resulting from the Durbin Amendment," said Lauren Francis, a spokeswoman for JPMorgan Chase, in an email. "We are launching this new card because we feel that it is important to offer Disney customers a choice of cards from Chase."

The Durbin Amendment to Dodd-Frank directed the Federal Reserve Board to set new, lower debit interchange rates. Other major banks, including Wells Fargo, Regions, SunTrust, U.S. Bank and USAA, joined JPMorgan Chase in modifying or eliminating debit programs post-Durbin.

The Disney debit card's revival shows that perks still have a valuable place in a checking relationship, even if there isn't as much interchange revenue to support them.

Debit card rewards programs are still available, but many of them have migrated to merchant funded rewards strategies, says Patricia Hewitt, a director at Mercator Advisory Group.

And cobranded debit cards like the new Disney card, which has no annual fee, are rare.

Chase is looking to retain its checking account customers, Patricia Sahm, a managing director with Auriemma Consulting Group, said in an interview. Disney wants to use the program to drive more spending in its stores and parks, she says.

The rebirth of the Disney debit card may create some confusion for consumers forced to toss out their original Disney debit cards, but the new card fills a gap for Chase, she says.

Providing discounts for Disney fans that use both credit and debit cards should also drive more overall transactions for Chase, Sahm says.

"Once a family buys a Disney travel package with their credit card, they may hesitate to pile more expenditures during the trip onto that card, which means they could lose out on some Disney discounts," Sahm says. "Now a customer could revolve the cost of their Disney vacation on their credit card, and still get discounts by buying incidentals in the park with their debit card."

Chase's latest Disney debit card resurrects some of the same perks associated with the original debit card, including 10% off on merchandise purchases with the card online and at Disney Store locations and certain Disney theme park shops.

The new card has no annual fee, whereas the earlier one had a $25 fee. Chase is positioning the new card as the latest in a "suite" of Disney products that includes the Disney Rewards Visa Credit card, introduced in 2003 with no annual fee, and the Disney's Premier Visa Credit Card, introduced last year with a $49 annual fee.

The original Disney Rewards Visa Debit card, introduced in late 2009, provided one reward point equal to $1 for every $200 spent in signature-debit transactions, in addition to a handful of other perks.

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