BOA Keep the Change Program

[lennygaudy]

Hi, I'm just wondering what the general opinion about this program is around here. Earlier this week I read an article at a website linked on this forum (can't remember name now) singing the praises of Bank of America's Keep the Change program. I immediately proceeded to enroll myself and convinced my sister and my best friend to do so as well. But yesterday I read someone's post on another thread here saying anyone in this program was getting scr*wed and didn't even know it. Can anyone explain how this would be? Please let me know the downside of the program so I can cancel it asap if that's the case and apologize to my friend/sister. Thanks!

[disneysteve]

I see no point to the program. All it does is transfer your own money from one account to another each time you use your debit card.

1. Stop using a debit card. Use a rewards credit card instead.
2. Don't keep your money in a bank savings account. Use a high-yield money market account instead.
3. Don't develop the mindset that it is okay to buy something because at least it forces you to save some money.

I think the whole concept is bizarre.

[boosami]

It is a minimal savings strategy for those who can't bring themselves to save otherwise. Yes, people should be saving money, but they shouldn't have to trick themselves to do it. The bank should be teaching and rewarding good, conscious saving strategies. Programs like this make people think they can save money and solve all their money problems without changing their spending habits.

[poundwise]

It is a total joke. They round up and debit your checking account for the nearest whole dollar, transferring the difference in the purchase price and the debit into a savings account with a pitiful rate of return. Your own money, a few cents at a time, in an account earning practically nothing. No thanks.

Develop a real plan for savings. Set up a high-yield savings account and, if automation helps you, set up an automatic transfer(s) from your checking to savings.

[ktmarvels]

I agree that there are MUCH better ways of saving. However, I have a spend-a-holic friend who uses this card as a way to build up her savings without having to think or worry about it. Although setting up automatic transfers from checking to saving would have the same effect.

If they still are matching the funds you put in, that can speed up the savings, but once that stops, it turns into putting little amounts into a savings account with horrible interest rate.

[disneysteve]

Originally Posted by ktmarvels

I have a spend-a-holic friend who uses this card as a way to build up her savings without having to think or worry about it.

I think that is exactly the problem. It fools people into thinking that all of their spending is okay because at least it is forcing them to save money. That's nonsense, of course. As long as someone continues to spend on things they don't need, the few pennies that goes into the savings account from each purchase will amount to nothing.

[lennygaudy]

OK I understand why you frown upon it now. I signed up because I figured since I won't be focusing on my EF until my debt's paid off at least this was a way to get a little something saved up without even feeling it until I'm able to start throwing some real money in there later this year.

Should I just stay in the program until I get the $250 match or I'm able to start building my EF (whichever comes first)? The thing is with no money in my EF yet I don't think I'm at the point to open a new account anywhere-but I might be wrong.

[disneysteve]

Originally Posted by lennygaudy

Should I just stay in the program until I get the $250 match

I don't have a problem with that. Still, I don't generally support using a debit card for purchases. Credit cards are much safer, have better rewards programs and offer added protection that you don't get with debit cards.

[Ima saver]

i don't like the program either. If you want to save small sums, just put your change in a jar every day. That is what I do and then I put it in my savings account paying 3.1%, once a month.

[lennygaudy]

Originally Posted by disneysteve

I don't generally support using a debit card for purchases. Credit cards are much safer, have better rewards programs and offer added protection that you don't get with debit cards.

Good points disneysteve, I think I'm just going to cancel my enrollment and inform my friend & sister too.

[boosami]

Originally Posted by lennygaudy

Good points disneysteve, I think I'm just going to cancel my enrollment and inform my friend & sister too.

It's not a bad program, and I'm not sure it warrants cancelling (if you are comfortable using your debit card for purchases). It's just not a substitute for conscious, planned saving. Any kind of match is free money, and that's a plus with this program.

People here have a problem with it because it gives spenders a false sense of security and the mindset "the more I spend, the more I'll save!" If you're comfortable using your debit card my advice is to stay enrolled and continue spending as if you had cancelled the program. Get some of those free matching funds. As for the low rate of return, you can always transfer those funds periodically somewhere else with a better rate.

I can see how this program could be used responsibly to one's advantage, just like credit card rewards programs.

[disneysteve]

Originally Posted by boosami

I can see how this program could be used responsibly to one's advantage, just like credit card rewards programs.

I agree with staying with the plan until you've gotten the maximum matching funds. Nothing wrong with free money.

After that, I think the plan amounts to nothing more than mind games since you are just shuffling around your own money.

[boosami]

On the debit card usage note... I don't carry or use my debt card--ever. Unauthorized use of your debit card is much more of a hassle than any credit card, and you can be liable for much more of the funds stolen.

[simpletron]

while the maxinum yearly match is 250, but you only get the 100% match for the first 3 months before dropping to 5%. so during the promotional 3 months it is a good deal especially if most of your purchases are under $50. after the first 3 months, a 1% cash back credit card creams it unless a lot your purchases are .99 items, one at a time(so with sales tax, the bill is 1.0X).

one of the best place to use this program is gas stations. fill up for 10.01 and get .99 match during the promo is ~10% off.

[neguy11]

I like Wachovia Way 2 Save much better.

Each time you use your debit card as a "credit," as well as make bill payments from your checking account, they transfer $1 from checking to savings. You can also earn reward points from swiping your debit card as a "credit" but that's a different program. You can also do an automatic transfer fo up to $100 per month from your checking to your savings.

The APY if 5% for year one, and 2% for years two and three. You also get an annual bonus: 5% of the eligible balance for year one (up to $300) and 2% of the eligible balance (up to $300) for year two and three.

For me this is a good program because I CANNOT use credit cards, but I am still earning reward points through the Wachovia Possibilities Rewards AND I am growing my emergency savings at a higher rate than I get through ING. I'm not really able to put a large chunk of money into savings, so this is a practical way for me to slowly build up a savings.

[woodie96]

The way I remember it on my DW's old bank account we closed a couple of months ago.....They combine all of your debit card purchases for the day, and after that total, they then transfer the amount rounded up to a buck. So if i remember right, most she could get on any given day in the their program was $1.00. So at best, she could transfer 31 dollars a month into savings.
The jar idea works much better...IMHO....DW took our jar and deposited it a couple weeks ago, and had almost 90 bucks in it.

[minnie1928]

Here's the bank's perspective....it increases the number of debit card transactions which increases the amount of interchange revenue they earn. Moving your money from one account to another one of your accounts electronically costs them virtually nothing (outside of the original programming). They get good marketing material and increased revenue with very little effort/outlay on their part. The upside on the bank's part would be huge with very little downside.