Keep the Change

Bank of America has been advertising the crap out of their new program, "Keep the Change."  Here's how it works.  It's a debit card (attached, of course, to your checking account), and whenever you make a purchase, they kindly round up to the nearest dollar, and deposit the excess into your savings account with them.  For the first three months they will match 100% of your "change" and 5% thereafter.  Sounds okay right?  Here's how it works.

Let's say you have dinner for four at your local Piggly Wiggly, running up a total tab of $23.37.  You add $4.00 for tip (that's about right, they bust their butts there), and your total bill is $27.37.  BofA will kindly round your charge up to $28.00.  They will deposit 63 cents into your savings account, and if you are out of the three month promotion, add 3 cents to that deposit.  Now, if you're smart, you'll add $3.64 for tip.  It's still an acceptable 15.6% tip, and it make your total bill $27.01.  BofA will still round up to $28.00, and your "keep the change" deposit will consist of the 99 cents, plus 5 cents from the bankers.

Even with all that is it remotely a good deal?  Generally no, but for some rare cases it can be.  Before you consider using this card you must be able to answer "yes" to all of these questions:

1.  Do you have credit card debt, or an inability to pay off your balance in full each month, thus have decided that you will only use debit cards?
2.  Do you have the patience to remember to only use this card for small purchases (under $10), that end in .01-.25?
3.  Are you okay with the "savings" going into a savings account that currently pays an interest rate of 0.50%?

The answer for me is "no, no and no."  But hey, you might be different.

Here's the problem.  Remember our Piggly Wiggly example?  The money being deposited is almost entirely your own.  The 5 cents that they deposit on a $28 purchase works out to be 0.18% of the purchase.  There are plenty of cash back cards that will reward you quite a bit better.  Don't rely on gimmicks like this to save some money.  If you need some tips, Amanda of Young and Broke has some good tips.

Comments

[Tim]

Hey there! Thanks for visiting my blog, thought I'd return the favor. Looks like you've been at it a while now though. This was a good post...I never heard of this program. Probably doesn't help that I don't watch TV. Doesn't sound that great to me, but maybe there's a way to work it.

[Newsgirly]

Hi,
I joined this program. Here's how I do it. I have cc debt, so I use a debit card. I am only really using it for the 3-month 100% promo period. I take the subway every day. I add to my farecard in $2.05 increments. That way I "make" $0.95 per transaction. I have to buy the fares anyway, and it only takes me a minute or so to rack up a few dollars at at time. I've hit the $250 mark. As I UNDERSTAND THIS: All I have to do now is keep $300 in that account for a year. The rest of my $ can go to wherever. As my change gets slotted in there, I can slide it out and back into my other accounts as long as I have $300 remaining. In december, they give me $250. So I'm getting a return of about 46% on my $2.05 purchase that I'd have made anyway, $20 at a time.

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