$150 for an Hour’s Work

open_a_checking_accountOpen a checking account at our bank and  get a $150 bonus.  So, what’s the catch?  What does it say in the fine print?  Is it worth it?

Yes, it might be worth the time it takes to open a checking account you don’t need, collect the bonus, and then close it later.  It will take some effort, probably over the course of several months, but altogether it shouldn’t total more than an hour of actual work, so $150 is a pretty good wage for that amount of time.

I heard an ad on the radio:  Open a checking account.  Get $150.

Here’s what I had to do.

Go to the new bank’s website.  Fill out some forms with my name and other information.  Print and sign a signature card and mail it to the bank.  Make an initial deposit by linking the new account, which required allowing the new bank to make a couple small deposits (a few cents each) into my existing account at my credit union and then logging into the new bank’s website and entering the amount of the deposits to verify the accounts were linked.  This took about 20 minutes over the course of a few days.

Using my employer’s intranet, I allocated a portion of my paycheck to be deposited into the new account.  To avoid a monthly fee (which would add up to a significant chunk out of the bonus I was trying to get), at least one direct deposit must be made into the new account each month.  That took another 10 minutes.

Then back to the new bank’s website.  I don’t really want to keep any of my money in the new account.  I first thought I would just transfer the money from the required direct deposit that went into the new account into my checking account at my credit union, but I discovered that there’s a fee to do this.  However (for some weird reason), there’s no fee to pay bills from my account via the new bank’s website.  So I set up a monthly transfer to the gas utility company to pay my monthly gas bill.  Another 10 minutes.

I get paid and log onto the new bank’s website to ensure my direct deposit arrived in my account.  It’s there.  I get the $150 bonus.  That goes towards the gas bill.  10 minutes.

I look into closing the new account and discover that there’s a $50 account-closing fee if the account is closed within the first 6 months after it was opened.  No problem.  I can wait.  For the next 6 months, $50 from every paycheck will continue to be direct-deposited into the new account and then will go towards the gas bill.  10 minutes.

So there you have it.  $150 earned for about an hour’s work.  I probably wouldn’t have done it if I couldn’t have done it all online.  If my employer required me to visit the HR department to set up a separate direct deposit, then I probably wouldn’t have done it.  This worked so well, I am thinking of doing it again with another bank.  Next time, I will probably set up a direct deposit that will be enough money to pay the mortgage and then use the new account to make the mortgage payment.

Bottom line:  Before you open an account for the bonus, find out

  • what’s required to get the bonus and to avoid fees (minimum balance, direct deposit, etc.)
  • if there are fees to transfer money out of the account and how they can be avoided
  • how long the account must be open to avoid an account closing fee.

 

Why You Should Pay Your Credit Card Bill At Least Twice Per Month

I got my first credit card before the modern internet began, before credit-card issuers had websites that could be used to check balances and make payments.  Back then, you could easily get in trouble with credit cards by simultaneously charging purchases on your credit card while you were spending whatever money was in your bank account.  If you didn’t carefully keep your credit-card receipts (and I often didn’t), you could be in for a shock when the monthly credit-card bill arrived in the mail.

Here’s what could happen:  Over the course of a month, I wrote checks for the usual rent and utility bills (remember, this was before the internet) and made some withdrawals from the old neighborhood ATM for walking-around money.  (Being careful not to pay ATM fees, of course.)  I also ate a few meals at restaurants, had some drinks at the local beverage emporium, got groceries, saw a movie, maybe bought some clothes, picked up a few books or magazines, bought several gallons of gas for the car, ordered something from a catalog, maybe paid for a car repair or perhaps a large purchase or two — and I put all these purchases and more on the card and … WHAM! …  the U.S.P.S. delivers a credit-card statement.  Open it and find the total due on the credit card bill exceeded what was left in the bank.

Sure, I could have avoided that if I had kept all the receipts and maintained a running day-by-day total of the credit-card balance.  And that’s a great idea.  Maybe staple the receipts to a calendar on the wall.  Seeing the total climbing into the danger zone should be a warning to stop spending money you haven’t got.  And yes, even in those pre-internet days, there was an 800-number I could call to check on the balance.  But the problem was, I didn’t keep track.  Be just a little careless and there was soon more credit-card debt than I could properly handle by paying off the balance in full each month.

credit_card_pay_nowNow, in our internet-everywhere age, you have another option.  Instead of adding up the receipts to a running total, you can just log-on to your credit card’s website and see what you’ve spent.  While you’re there, click the “Pay” button (certainly, you’ve already linked the card’s payment system to your checking account) and pay off the total balance.  Do this every two weeks, or even more frequently, and you will never be surprised by a terrible end-of-the-month total.

As you’re paying off the credit card, you’re also reducing the amount of money in your checking account — which should send a “current balance” signal to your brain and cause you to be careful with whatever dollars you have left.  Thus, making multiple payments per month does two things: it eliminates the chance of a surprisingly large balance on the credit card bill and it prevents you from spending money in the checking account that should go to paying off the credit-card bill.

Another possible advantage:  A low balance on your credit cards might help improve your credit rating.

A word about “using the bank’s money”:  Years ago, one of the touted “advantages” of using credit cards was that by using a credit card for all your normal purchases and then paying it off as late as possible each month you were “using the bank’s money” instead of your own.  The idea being, you could keep as much of your money as possible in an interest-earning account before using it to pay credit-card debt.  You could get maybe an extra 20 days each month earning interest and that was “free money” that you get to keep it for yourself.  Nothing wrong with this approach, if you’re careful enough to do it correctly.  It may not be as worthwhile now (circa 2015), during a time of low-to-zero interest rates on checking and savings accounts.