Author Topic: Genius idea for high-interest checking minimum transactions?  (Read 8344 times)

sheepstache

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Genius idea for high-interest checking minimum transactions?
« on: December 03, 2012, 01:51:21 PM »
You know those high-interest checking accounts where you only get the high interest if you use the debit card a certain number of times a month.  Through my spouse, I can open one at a credit union that pays 4.25 on the first $5,000, provided you make 24 debit transactions, not counting ATMs.

24!!

I don't even make that many transactions a month, much less in-person card swipe-y ones.

But I do spend just about $20 a month on subway rides and you can use your card with a PIN on those machines.  What if I just make 24 one dollar transactions a month?   Do they consider that fraud?  Does anyone familiar with these types of accounts see a problem with this?

Paul der Krake

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Re: Genius idea for high-interest checking minimum transactions?
« Reply #1 on: December 03, 2012, 01:54:39 PM »
I suggest you ask them. My Wwells Fargo checking acocunt comes free as long as I do 10 swipes a month, and they told me explicitely to do whatever I could to get them, even if that meant paying for $3 purchases by card.

My guess is that they make enough money from the transaction fees.

Psychstache

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Re: Genius idea for high-interest checking minimum transactions?
« Reply #2 on: December 03, 2012, 02:02:03 PM »
I have one where I have to make 16 transactions per month to get the interest. I will put every tiny transaction i can on there until i get the minimum. 2 dollar coffee here. 5 dollar lunch there. It gets there.

I have definitely put 1 dollar transactions on there, and have not heard any negative comments. Also, I never use my pin on the transactions but i still get the fat interest rate.

grantmeaname

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Re: Genius idea for high-interest checking minimum transactions?
« Reply #3 on: December 03, 2012, 03:42:31 PM »
Somebody on this site mentioned a few months ago that they pay their cable bill online in fifteenths with their debit card. You could try that...

Will

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Re: Genius idea for high-interest checking minimum transactions?
« Reply #4 on: December 03, 2012, 05:39:20 PM »
I have a similar situation with my CU.  I work inside a Costco, so what I do is split up my grocery shopping so that I am picking up one item each time I work until I meet the minimum.  So I might buy a bunch of bananas one night, then some salad the next night, and so on.  Or sometimes, if I am buying 2 items, I will ask them to split it into 2 transactions.  Works for me, and while they aren't $1/each purchases, they are low, but no complaints.
« Last Edit: December 03, 2012, 06:17:05 PM by Will »

dragoncar

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Re: Genius idea for high-interest checking minimum transactions?
« Reply #5 on: December 03, 2012, 06:08:59 PM »
I used to have a 0% balance transfer that was valid forever as long as I did 2 transactions per month.  This was back when payments were allowed to be applied to the highest interest rate first, so you'd end up paying like 17% on any new transactions until your balance transfer was paid off. 

To minimize that, I made two gasoline purchases with as little gas as I could pump - about $0.10 per transaction.  Now, two transactions per month was easy.  16 might take a while if someone's waiting behind you.  You could also hit the self-checkout line of the grocery store at a slow time and scan each item one by one. 

I milked that 0% rate for almost 6 years until my minimum payments brought the balance so low it wasn't worth the trouble any more. 

Right now I have a credit card that gives me $0.10 back per transaction.  Trying to figure out of there's a way to make that pay anything substantial.
« Last Edit: December 03, 2012, 06:13:01 PM by dragoncar »

sheepstache

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Re: Genius idea for high-interest checking minimum transactions?
« Reply #6 on: December 03, 2012, 06:23:38 PM »
The fine print says something about swipes which makes me think they mean in-person, but I could always check on those other options.  It would be easier, though not as charmingly quixotic, as standing in the subway station loading up my metrocard a dollar at a time once a month.

And see, I'm already past the two-dollar coffee, five-dollar lunch thing.  Ironically, my spouse is not, but he can't manage to keep money in his account :)

Thanks for the feedback.  Seems like the card companies won't care and it's more about disadvantaging/inconveniencing the merchants as little as possible.

sheepstache

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Re: Genius idea for high-interest checking minimum transactions?
« Reply #7 on: December 03, 2012, 09:01:53 PM »
By the way, I had definitely considered accounts that required a certain number of transactions per month before.  But 24??  Especially now with mustachianism, I'm like, "24 purchases a month?!  That's, like, buying something every day!"  Which frustration I can not share with most people outside this board :)

I had assumed banks required a minimum number to ensure that you were using it as your principal purchasing account so that they would actually end up with your total purchases, and their transaction fees, not just the minimum required.  With 24, I'm wondering if they're not also trying to ensure that you won't actually make the minimum many months and they'll save on the interest payment ...or is it that 24 is a perfectly normal number of purchases now?  Maybe it always was and people use plastic for small things more now.

Will

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Re: Genius idea for high-interest checking minimum transactions?
« Reply #8 on: December 03, 2012, 09:19:17 PM »
I was just griping about something similar to this: rewards credit cards.  I'd love to get a Southwest Airlines Rewards card, so I could get the 50,000 points for 2 free roundtrip flights.  But I'd have to spend $2000 in 3 months.  Ain't gonna happen.  Or the Fidelity Investments AmEx or Visa for 2% back; I already buy my gas on the TrueEarnings card and get 3%, and most of the rest of my spending is the debit card grocery stuff I mentioned in a previous post.  2% of not much is really really not much at all.  Being mustachian makes some things so difficult!  LOL!

mushroom

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Re: Genius idea for high-interest checking minimum transactions?
« Reply #9 on: December 04, 2012, 07:46:59 AM »
@Will: You might want to consider looking at Bluebird, a new prepaid debit card put out by American Express this year. It's a system that sort of works like a debit account that you can use to pay bills, write checks, get money out of ATMs, etc.

The interesting part is that you can buy reload cards (with a credit card such as the Southwest card) to load into your Bluebird account to pay stuff like rent or taxes or write checks to your friend where you can't normally use a credit card. The prepaid cards cost money, but something like $4 for a $500 card a few times to ultimately get over $800 back on Southwest flights isn't bad at all.

Basically, people are using these to get credit card rewards points while using that money to pay bills that would normally not accept credit cards. It's also especially helpful if you have to meet a minimum spend requirement to get a certain bonus on a credit card.

You can read more about it: http://thepointsguy.com/2012/11/top-10-ways-to-maximize-miles-and-points-with-pre-paid-reloadable-and-gift-cards/ and http://thepointsguy.com/2012/10/new-american-express-bluebird-card-huge-potential-points-earning/

Caveat: I think some stores are selling out of the Vanilla Reload cards so you'd want to make sure you could buy them in your area if you do this.

The Points Guy is definitely unmustachian, but I follow him on my RSS feed because I like getting free money from credit card companies. Last year I got a $1250 bonus after spending $1500 just for signing up for a 2% cash back credit card with the first year's annual fee waived, which is insane (especially since my husband did the same thing).

sheepstache

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Re: Genius idea for high-interest checking minimum transactions?
« Reply #10 on: December 04, 2012, 09:31:38 AM »
But I'd have to spend $2000 in 3 months.  Ain't gonna happen.

Exactly!  And in fact the Fidelity 2% card is why I'm attracted to the subway card idea for qualifying purposes because then I would still have substantial purchases (read:groceries) I could make with a Fidelity card.

In addition to Mushroom's idea you might also check out this post from My Money Blog about Charge Smart which lets you pay almost anything with a credit card for a 2-3% fee, which, as the guy points out, is worth it if you're trying to get rewards.  Haven't used it myself.
http://www.mymoneyblog.com/paying-your-mortgage-with-a-credit-card.html

dragoncar

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Re: Genius idea for high-interest checking minimum transactions?
« Reply #11 on: December 04, 2012, 12:36:49 PM »
...or is it that 24 is a perfectly normal number of purchases now?  Maybe it always was and people use plastic for small things more now.

24 is a perfectly normal number for my primary credit card.  But I tend to buy small amounts of groceries a few times a week on my walk home from work (small enough to carry without difficulty).

sheepstache

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Re: Genius idea for high-interest checking minimum transactions?
« Reply #12 on: January 05, 2013, 11:07:24 AM »
Arrg, just realized a flaw which is that you have to make a minimum $10 transaction on the mta machine to get the 7% bonus, which I would normally do.  So if I make all 25 transactions (it is up to 25 now) that would be an opportunity cost of $1.75, plus the 1% I would get back using my regular credit card, so a $2 cost, bringing the interest earnings down to $15.70 a month.  Though for the ten minutes or so it takes me to do the transactions not a bad hourly rate.

I hope it's obvious I'm not actually super concerned about the $2, just trying to figure out the best way to play the game.

Crash87

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Re: Genius idea for high-interest checking minimum transactions?
« Reply #13 on: January 06, 2013, 09:13:51 AM »
You could go to www.kasasa.com and find an account that requires fewer debit transactions.

Will

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Re: Genius idea for high-interest checking minimum transactions?
« Reply #14 on: January 06, 2013, 09:22:40 AM »
Maybe there is a business opportunity here:

Set up a website where you allow people to make all their required transactions and you somehow get a cut...

arebelspy

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Re: Genius idea for high-interest checking minimum transactions?
« Reply #15 on: January 06, 2013, 10:36:18 AM »
Maybe there is a business opportunity here:

Set up a website where you allow people to make all their required transactions and you somehow get a cut...

Setting up your business relying on another company to keep doing the same is risky.  I'd bet once the bank found out about your business, they'd cut off transactions to you.
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sheepstache

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Re: Genius idea for high-interest checking minimum transactions?
« Reply #16 on: January 06, 2013, 01:18:05 PM »
You could go to www.kasasa.com and find an account that requires fewer debit transactions.

Mm. The problem is I'm specifically trying to get the 4.25 this one offers.  That website's a little confusing but I didn't see anything over .75.

Crash87

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Re: Genius idea for high-interest checking minimum transactions?
« Reply #17 on: January 06, 2013, 02:04:41 PM »
You could go to www.kasasa.com and find an account that requires fewer debit transactions.

Mm. The problem is I'm specifically trying to get the 4.25 this one offers.  That website's a little confusing but I didn't see anything over .75.

.75%? That's very low compared to the accounts available in my zip code. Keep in mind accounts like this have an upper limit on the balance that gets the good interest rate. Sometimes the higher interest rate isn't as good a deal as the lower rate applied to a higher balance.

If the account you're looking at is similar to mine I'm sure you'll be able to make 24 $1 transactions. The merchant will likely lose money on whatever you buy.

sheepstache

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Re: Genius idea for high-interest checking minimum transactions?
« Reply #18 on: January 16, 2013, 09:33:46 AM »


.75%? That's very low compared to the accounts available in my zip code. Keep in mind accounts like this have an upper limit on the balance that gets the good interest rate. Sometimes the higher interest rate isn't as good a deal as the lower rate applied to a higher balance.

Ah, okay, I was searching for the wrong type of account, now I see the ones you're talking about.  Unfortunately I can't find any with higher than 4.25%.  I did find one with 4% and with a higher balance limit and only 15 required transactions but I'm not eligible :( (you have to live in a certain area or work for a particular company in that state).

The 4.25 one is limited to $5000 but I probably don't particularly want to hold more than that in cash so it's fine.

If the account you're looking at is similar to mine I'm sure you'll be able to make 24 $1 transactions. The merchant will likely lose money on whatever you buy.
Yeah, I know it's possible to do it, it's just that, most months I literally make like only 5 plastic transactions a month.  I want to make sure that, psychologically, I'm not influenced to spend more money than I would otherwise :) 

Also, I just realized you can get an American Express card with 3% back on groceries which is my only real budget category (besides rent, hookers, and blow, none of which are eligible for cash back) so I'm trying not to rely on groceries for any of the transactions.

madage

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Re: Genius idea for high-interest checking minimum transactions?
« Reply #19 on: January 16, 2013, 01:04:55 PM »
Also, I just realized you can get an American Express card with 3% back on groceries which is my only real budget category (besides rent, hookers, and blow, none of which are eligible for cash back) so I'm trying not to rely on groceries for any of the transactions.

If you spend enough on groceries, it's actually a better deal to go for the Preferred version of this card (with the $75 annual fee) because it doubles your grocery cash-back to 6%. The break even point is $2500/yr in groceries. Even if you don't spend that much, many grocery stores have nice racks of gift cards that you can earn 6% cash back on, too.

sheepstache

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Re: Genius idea for high-interest checking minimum transactions?
« Reply #20 on: January 16, 2013, 01:29:54 PM »
Also, I just realized you can get an American Express card with 3% back on groceries which is my only real budget category (besides rent, hookers, and blow, none of which are eligible for cash back) so I'm trying not to rely on groceries for any of the transactions.

If you spend enough on groceries, it's actually a better deal to go for the Preferred version of this card (with the $75 annual fee) because it doubles your grocery cash-back to 6%. The break even point is $2500/yr in groceries. Even if you don't spend that much, many grocery stores have nice racks of gift cards that you can earn 6% cash back on, too.

I did see that one, thanks!  But yeah I calculated that I wasn't at the break even point or just barely and didn't want it to influence me away from farmer's market or CSA stuff.  Also, no car and not much of a shopper so the gas and department store stuff doesn't help me much.  I'm keeping it in mind for if our family gets bigger. 

But since it sounds like you have one, what do they mean by "stand-alone grocery story"?  I gathered Costco and BJs don't count but what about chains?  I mean, most grocery stores are chains, so I would assume they would count but wasn't sure.

madage

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Re: Genius idea for high-interest checking minimum transactions?
« Reply #21 on: January 16, 2013, 01:52:28 PM »
But since it sounds like you have one, what do they mean by "stand-alone grocery story"?  I gathered Costco and BJs don't count but what about chains?  I mean, most grocery stores are chains, so I would assume they would count but wasn't sure.

Yep, I have one and love it. You would earn 1% (with either card) at warehouse stores like BJ's and Costco, probably Wal-Mart, too (I don't shop there, so I'm guessing). We typically buy our produce from either HEB or Kroger, and get 6% back at both stores, also Meijer when we're in Michigan. Most of our gift card purchases are for Amazon or Lowe's.