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Cashback With A Twist – Amex and BoA

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CNNMoney reported about two new cash back programs from BoA and Amex. Cash back programs have been here for quite a while and many of us consumers are getting to be pretty savvy with them, getting 1% just isn’t good enough anymore. Credit card issuers have tried almost all the vanilla options – straight cash back, points for merchandise, points for travel, better than average cashback on gasoline/groceries/drugs, cash back to a brokerage account, cashback towards education, and even cashback aimed at heavy drivers. What’s next? How about “Keep the Change” from Bank of America and “One” from American Express?

Bank Of AmericaBank of America’s “Keep The Change”
Debit card users can opt into this program where their purchase is rounded up to the next dollar and that difference is deposited into a savings account. And for the first three months, BoA will match that deposit. After three months, they’ll match 5% up to $250 (each year). Here is a page on their site explaining this is greater detail. Something you should be careful of is that you have to pick which savings account it will go into and that account may be subject to minimums and fees.

Breakeven point: Tony brings up an excellent point as to where the break even point is between the bonus money you earn from a 1% card versus this BoA program. The break even point for the BoA Keep the Change Program is $99 in the first three months. After 3 months, the break even point is $5. With the 100% match, at $99.01 you will get 99 cents change with a match of 99 cents from BoA. With a 1% cash back card, you will get 99 cents in cash back. Above $99.01 and the cash back is greater and under $99.01 the BoA change matching program is greater. After three months, at $5.01 you will get 5 cents at 1% cash back and 4.95 cents on the 5% match of the 99 cents difference.

American ExpressAmerican Express “One”
In this program, American Express will put the 1% cash back into a savings account earning 3.15%. It’s a twist on the typical “give you your cash back” plan and it has a fancy name but its regular vanilla with a twist.

Honestly, both programs sound stupid and a waste of time. A dollar spent is a penny saved is a clever little catchphrase but, much to CNN Money’s credit for noting this, it’s a counter intuitive and destructive idea to be planting in the minds of our save-phobic society. While it’s nice to put the “change” in a jar (that only earns 0.5% if you aren’t dinged for fees), it’s better to keep that change in there in the first place and preferably in a high-yield savings account (Emigrant at 4%!)

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9 Responses to “Cashback With A Twist – Amex and BoA”

  1. Tony says:

    Jim buddy, your wrong and so is CNN Money.
    Why would you NOT sign up for a program that helps you achieve “automatic” savings AND gives money away? When was the last time a bank gave away money, you never see that happening. For three months BOA is going to give me change on the dollar every time I use my card, which I am using anyway. I was at a restaurant and calculated the tip and total to equal 30.01, BOA just gave me a dollar that I would have never had otherwise.

    You can tell CNN their wrong for me, okay?

    Thanks

    TDog

  2. jim says:

    You’re right, the BoA “Keep the Change” plan is better in the first three months than a 1% cash back card if your purchases are less than $99 (spend $99.01, get your own 99 cents in an account and 99 cents matched by BoA versus 99 cents cash back at 1%), but after three months it’s better to use the 1% card.

  3. Randolph says:

    The American Express One card seems to make financial sense if you use it to pay for everday purchases; and pay it off in full each month. If you spend more than $291 a month on groceries, gas, utilities, etc… then you will break even with the annual fee of $35 (which they waive the first year). So anyting above that is a 1% match going into a high yield savings account (currently 3.50%). If your monthly bills exceed $291, then this seems to make each dollar you spend worth a little more. Emigrant-Direct is scheduled to release a similar credit card plan in November; can’t wait to benefit from the competition between two of my most favorite financial institutions.

  4. Just a Memo says:

    Keep the Change, Bank of America Says

    I finally came to stumble upon this myself. Anyways… if you haven’t heard or seen yet (especially for BofA members), Keep the Change, the new program developed by Bank of America lets you save money in a weird way….

  5. Randolph says:

    Disregard my previous entry concerning the American Express One card as being a good thing. I have never encountered such incompetence from any company. American Express has released a product that they are unable to support. Their advertisements concerning this card all false. After having this card for three weeks, I have now filed a complaint with the BBB, the FTC, and my state’s attorney general’s office. Do not get this card. I have had other American Express cards for years and have never had a complaint, but after my experience with them concerning this account, I will never do business with them again.

  6. American Express One

    American Express is offering a relatively new (well, a few months old) credit card called One. As you spend, 1% of each purchase is automatically deposited into a savings account that’s currently earning 3.5% APY. It’s not a horrible intere…

  7. DropDeadGorgias says:

    However, the Amex One card has a $35 dollar annual fee after the first year. That was enough to stop me from even looking further into it.

  8. FMF says:

    I use Amex BLUE — no fee and decent rebate.

  9. Well i'm new says:

    Well I’m one of the new ones with this amex one card. And i’m still scratching my head on what that 1% toward the savings account applies. for i purchased groceries, gas and many household items and got nothing toward my savings otherthan the $50 bonus. Boa their card is no more than a debit card and there’s no bank in the city i live in. too bad Capital one couldn’t try for one with a higher percent to savings program. hopefully without the higher fees. i’m not saying its a bad thing just clarity to it all. the commercial shows items for home improvement, but is that its limit. Electronics and home decor?


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