Monday, January 23, 2006

Debit Card Savings Plans Help You Save Money

There is an interesting program offered by Bank of America to encourage use of debit cards.

We all know that debit is better than credit but, according to the Keep the Change Program Bank of America is putting more money in your bank account.

How it works is when you make a purchase with your Debit Card, Bank of America will pay you the difference between your purchase and the next highest even dollar ammount. Lets say your purchase is $5.49. Under the Keep the Change program, Bank of America will pay you $0.51 and deposit it to your savings account. To make this even better, they will match your keep the change payments for the first three months.

Now why would a bank give away money?

Well...the prospect of getting a free dollar on a purchase, the reality is most products ring in closer to $x.97 or $xx.99 which means the real difference is a matter of pennies so the net savings effect is marginal.

Shifting purchases to debit cards streamlines the transaction costs for the bank and save them millions in handling fees.
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