Getting Better Deals From Banks and Credit Card Providers

I changed banks for the first time in a decade last month, although it’s not a move I actively sought. I had a checking account with a large national bank that required a $100 minimum balance at all times. If I ever dropped below $100, a $15 fee would be charged at the end of the statement period. Yes, I know, first world problems, but this isn’t an interest-earning savings account – it’s a checking account where a dozen automated bill payments are withdrawn each month. Bank executives are the only people earning money from checking accounts, so requiring a $100 minimum without offering a penny in interest seems suspect. Especially when I’m getting offers for no-minimum checking accounts in the mail.

Making The Call

So I called customer service at this bank (you can Google the account stipulations to figure out who it is in about 30 seconds) and requested the $100 minimum on my checking account be waived. I said I’ve been a customer here for a decade and this minimum requirement is getting tedious. I have direct deposit going in each week, so why should I be required to keep a $100 minimum balance? After a lot of customer-service-speak, I was transferred to a supervisor where I again stated my case. Here’s how the exchange went:

Supervisor: ‘Hi sir, I understand your situation. We do have a checking account with no minimum, however, it does have a $5 monthly fee.”

Me: “Hmm, well I have several offers here from other banks for checking accounts with no minimum and no monthly fee. Could you waive the $5 fee for me?”

Supervisor: “I’m sorry, but we can’t do that.”  (Suuuuure you can’t)

Me: “I’ve been a customer here for a decade and I really don’t want to switch, but why should I continue banking here when I have better offers elsewhere? I know your average customer acquisition cost is a four-digit number. (Thanks Ramit Sethi!) Are you really willing to lose a loyal customer over a $5 monthly fee?”

Supervisor: “I’m sorry sir, there’s nothing I can do.”

Me: “Well I’m sorry too. I’ll be closing my account now.”

Inertia is a powerful force and these companies are aware of it. My old bank was basically calling my bluff – they didn’t think I’d go through the hassle of closing up an account and changing all my automated payments. If you have a magazine subscription or gym membership you don’t use, you understand this concept all too well. The gym counts you slacking so they can sell more memberships than they can service. The magazine counts on you forgetting to cancel each month. And of course, your student loan servicer counts on you not understanding the terms and getting frustrated by their game of phone tag. (Looking at you, Navient!)

Breaking free from this type of inertia is necessary to achieve financial freedom. My old bank didn’t think I’d follow through and they were wrong. Last month, I opened a checking account with Santander Bank. It has no minimums or fees AND they’re giving me $225 if I keep my account open for 90 days and set up direct deposit. That sounds like a win to me.

Making Banks and Card Providers Work For You

Consumers have so many options today thanks to the internet. You have no reason to accept a bad deal or poor service from a bank, credit card provider, or really any company that depends on your happiness for repeat business. Would you go back to a restaurant where rude waiters served lukewarm entrees? No! So why should you keep doing business with banks or credit card companies that want to nickel-and-dime you to death? (Note: check out some of the pros and cons of credit cards for recent college grads here)

Now let’s take a look at some best current deals in the banking and credit card industries, broken down based rewards and costs. I guarantee you’ll want to explore changing banks or credit card providers after seeing some of these offerings.

A few notes:

  1. To get the bank account bonuses, you’ll need to set up direct deposit. All the worthwhile offers require direct deposit or large daily balances.
  2. I excluded all bank offers that required more than $2000 of direct deposits per month or daily checking balances over $25. You should never need more than a $25 minimum in a checking account.
  3. Bank accounts without a simple way to waive any monthly fees didn’t make the cut.
  4. Credit cards with annual fees were completely excluded. They make enough money off you already.

Bank Accounts

Best Traditional Checking Account (EAST COAST ONLY) – Santander Simply Right Checking ($225 bonus)

Yes, I’m a little biased here, but my experiences with Santander have been nothing but pleasant. The Simply Right Checking account requires no minimum to open and there’s no monthly fee as long as you make one transaction per month. You could pay a bill, deposit money, or buy a pack of gum – all count as qualifying transactions.

Santander will also give you $225 if you keep your checking account open for 90 days and have direct deposits totaling $1,000 or more post within that time frame. Just use the promo code in this link. If you meet those two requirements, you’ll receive $225 within 30 days. Santander has free ATMs inside most CVS Pharmacy locations and an easy-to-use mobile app. Note that Santander only operates in the eastern United States at the moment, so midwest and west coast residents should move on to the next account.

 

Best Traditional Checking Account – Chase Total Checking ($200 bonus)

JPMorgan Chase is the largest bank in the United States and their Total Checking account is a great deal for the cash-strapped college graduate. The Total Checking account has a $12 monthly fee that can be waived if $500 in direct deposits are made each statement period. The bank has ATMs and physical branches all over the United States, plus online banking features if you want to ditch the brick-and-mortar locations.

Additionally, ANY type of direct deposit makes you eligible for a $200 sign-on bonus. Simply open a Total Checking account, set up direct deposit, and you’ll get the bonus within 10 days. But read the fine print! If you close the account within six months, JPMorgan Chase will take the $200 bonus back.

 

Best High-Yield Checking Account – Consumers Credit Union Free Rewards Checking (3.09% APY)

Important note: Consumers Credit Union only operates in Michigan

You read that right, the Free Rewards Checking from Consumers Credit Union will pay 3.09% interest on your account balances up to $10,000. Credit unions can be a great way to find deals since they’re membership only, but a membership at CCU only costs $5. You can sign up online or visit a branch in person to receive the best interest rate. 

Of course, there are stipulations. You must make 12 debit card transactions AND have $500 in qualified direct deposits posted each month (plus sign up for E-statements). For every month you meet those requirements, you’ll earn 3.09% APR on your balance. If you DON’T meet those requirements in a given month, you’ll only earn 0.01% APR.

 

Best Traditional Savings Account – CitiBank Accelerate Savings (2.36% APY)

CitiBank is the retail banking division of CitiGroup, the third largest national bank behind JPMorgan Chase and Bank of America. CitiBank has over 700 branches across the country and a large network of ATMs. But their best offering is the Accelerate Savings account where customers get 2.36% interest starting with the first dollar deposited. No minimum is required to open an account, but you will have to do some work to avoid the monthly fee.

To get the maximum APR, you’ll need to choose a “banking package”. If you already have a CitiBank account, this will be a breeze. You simply add the Accelerate Savings account to your existing account. If you’re new to CitiBank, you’ll get five packages to choose from, but you’ll need $10,000 to access any packages outside Basic Banking and Access Account.

With Basic Banking or Access Account, you’ll be charged a $4.50 monthly fee that’s waived with a $500 balance. A $500 minimum is high, but 2.36% in a savings account from a bank with a convenient national presence is tough to beat. If your balance falls below $500, you still get the 2.36% rate too. Make sure you check the details because this account is only available in 41 states.

 

Best Online Savings Account – Vio Bank High-Yield Online Savings (2.46% APY)

You’ve probably never heard of Vio Bank, but they should be on your radar. Vio Bank is a small online-only bank with no brick-and-mortar locations. Online banks have a few advantages over traditional banks thanks to the reduced overhead. Here’s a simple formula:

Fewer employees to pay +  no property costs = better deals for you.

You’ll need $100 to open the Online Savings accounts and it doesn’t come with an ATM card. You’ll need to link an existing bank account and transfer money via Automated Clearing House (ACH). Only six transactions are permitted each month. Sure, you lose some convenience, but you immediately begin earning 2.46% APY as soon as you make your first $100 deposit. No account minimum exists beyond that initial $100 and there’s no monthly fee.

 

Credit Cards

Best Card For Cash Back Rewards – Discover IT Cash Back OR Chase Freedom Unlimited (5% Cash Back)

Both these cards offer similar deals, so I’m grouping them together. Discover and Chase both offer cards with no annual fees and 5% cash back on a rotating group of categories. For example, in the second quarter of 2019, Discover IT offered 5% cash back at gas stations and Uber/Lyft rides. In the same quarter, Chase Freedom offered 5% back at grocery and home improvement stores.

Getting 5% cash back from essential purchases like gas and groceries is the best deal in the credit card industry. You’ll get 1% cash back all other purchases and you can redeem your rewards at any time. Rewards never expire either. Both cards limit the 5% reward to the first $1500 in purchases per quarter. You also could see additional bonuses thrown your way depending on where you live. (PA residents get a $150 bonus if they spend $500 in the first 90 days after activation).

 

Best Card For Travel – Bank of America Travel Rewards (1.5 Points Per Dollar)

If you’re a frequent traveler who doesn’t mind an annual fee, you can find a better card than this one. But we said no annual fees and the elite cards require 800 FICO scores anyway. The Bank of America Travel Rewards card is simple and you don’t need to keep track of any categories – every dollar you spend gets you 1.5 points.

In addition to no annual fee, you won’t be subject to blackout dates or specific airlines when you redeem your points. Points never expire and you can get a 10% point bonus if you have a Bank of America checking or savings account. Plus, if you spend $1000 on the card in the first 3 months, you’ll get 25,000 bonus points.

 

Best Card for Balance Transfers – American Express EveryDay Card (0% fee)

Have you gotten yourself into a bit of credit card debt? Many card companies offer balance transfers, where you can move your balance from one card to another and not pay any interest for a while. Of course, most of these transfers require a fee. The American Express EveryDay card does not.

Your balance transfer is free and you’ll get a 15-month no APR grace period to pay it off. You’ll be responsible for paying the monthly minimum each statement period though, but balance transfers are a way to get yourself breathing room without taking on additional debt. Just make sure you can repay the balance within the grace period.

Do you have any good experiences with banks and credit card companies? Let me know in the comments below. Deals like these are always fluctuating so this page will be updated if better options become available.

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