I've long been an outspoken critic of debit cards, but there's one kind of debit card that I can actually recommend.

Let me set a little background here. Target has had great success with a credit card called the Target REDcard that gives you 5% off your in-store purchases. But for those who don't want credit cards or can't get approved for one, Target also offers a version of the card that -- like a traditional debit card -- will debit from your checking account and still give you 5% cash back when you shop at the Red Retailer.

Target's not the only one doing this kind of thing. On the other end of the spectrum, Nordstrom is also doing a debit card program called Nordstrom Fashion Rewards that earns you reward points that convert to shopping discounts or cash.

But it was really the independent gas station/convenience store chains that were the pioneers of this kind of idea.

Gas stations have been brutalized by the enormous charges they have to pay when they accept a credit card. As an alternative, many developed the idea of offering you a reward card that is not a credit card but rather ties into your checking account.

Typically, these kinds of cards at gas stations also give a discount on each gallon of gas or a number of cents off every dollar you spend inside their convenience store. Sometimes the cards will also give you free food inside or "buy one, get one" (BOGO) offers.

One of the largest expenses facing gas station/convenience store operators are the merchant processing fees they pay to accept credit cards. It's worth it to them to offer these kind of debit cards that give you a discount because they can cut the credit card processors out of the equation. You get to share in the savings!

Ditto for Target and Nordstrom. They're putting an end to the looting being done with the merchant processing fees, and you get something for it and the retailer gets something for it. I think that's great news.

Image of Clark Howard About the author: Clark Howard

Clark Howard is a consumer expert whose goal is to help you keep more of the money you make. His national radio show and website show you ways to save more, spend less and avoid getting ripped off. View More Articles

Show Comments 0