An exclusive interview with PerksStreet CEO, Dan O'Malley about what happened to PerkStreet, what happens to our money, and what about the Perks?
One of my soldiers is down
Steve Stewart: PerkStreet was that final ammunition that proved you don't need a credit card to exist and prosper in America:

Credit cards used as emergency funds are destined to become new revolving debt
You can prove your credit worthiness without having to use credit cards to "build your credit score" with alternative options (see eCredable)
Debit cards have the exact same Zero Liability protections as credit cards when used in the non-pin functions (swipe and sign)
Using credit cards causes us to spend more than using cash or debit (recent article by Zac Bissonnette)
PerkStreet allowed us to earn cash back or rewards without using a credit card

Unfortunately, PerkStreet will be closing its doors September 26, 2013. They announced this via email to their customers on Monday August 12, 2013 and via their website PerkStreet.com.
I was able to secure an exclusive interview with PerkStreet's CEO Dan O'Malley. Click on the media player above to listen, read the transcript below:

What happened to PerkStreet and why is it closing?
Dan O'Malley: This space has undergone a ton of change from the fact that the Federal Reserve has taken interest rates to 0% and is keeping them there. This means all of the deposits that our accounts bring in are unable to make any money whatsoever. In a normal interest rate environment having checking account deposits is quite a profitable thing. All the regulations from the Dodd-Frank Financial Reform Act meant that there were not many partner banks that we could work with to host our accounts. Because of that, the banks in this space have pricing power over companies like PerkStreet. That worsened our economics.

Plus, interchange fees (swipe fees the bank earns when we use our cards) have been pushed down as a result of the Dodd-Frank Financial Reform Act as well. It has just taken us time to adapt the business and at the end of the day we ran out of money and we ran out of time.
Why can a credit card company make money but PerkStreet wasn't able to?
Dan O'Malley: There are a couple things here highlight why this is incredibly unfair to people who choose to spend their own money and spend on debit versus credit.

The first is that the Dodd-Frank Financial Reform Act specifically targeted debit card interchange. This is the fees that banks earn when you swipe your card at a retailer and reduce the amounts that banks earn on debit card transactions but didn't touch credit card transactions so banks make a whole ton of money when customers swipe credit cards and make much, much, much less when people swipe debit cards.

In fact, credit cards weren't touched at all as part of (Dodd-Frank Financial Reform Act) but debit cards were cut nearly in half. That to me is ridiculous - it's encouraging people to use credit over debit because you can have much richer rewards on your typical credit cards versus your typical debit card. I think it's frankly heinous that the government would choose to do that and encourage use of credit.

The second thing is credit card companies are able to take advantage of the fact that they can get customers in debt and make plenty of money. With debit cards you can only make money by holding people's deposits as opposed to getting them into debt. Those are the two things that shouldn't be the case in my mind.
What is going to happen to the money in PerkStreet accounts?
Dan O'Malley: PerkStreet customer's money is absolutely safe.

They are FDIC insured.
Our accounts are held at the two partner banks that we have: Bancorp and Provident Bank. Those are two highly stable, secure financial institutions.
Accounts at Bancorp will continue to function the same as they always have, you can continue to use your Bancorp account for as long as you like.