Bank of America recently started a program called Keep The Change. You need a BoA checking and savings account and a regular BoA (non-rewards, non-branded) debit/check card. The way it works is that any purchase you make is rounded up to the next whole dollar, and the change is deposited into your BoA savings account. For the first three months of the promotion, BoA matches the deposit at 100%, and afterwards at 5%. There is a $250/year cap on the matching earnings, and they are only transferred to your account after you have been enrolled for a year, whereas the change transfers from your own account occur on a daily basis.
Maximizing profit
You maximize your profit when the cents are both minimized and non-zero. You should thus elect to use your check card with purchases where you can choose the final purchase price, such as at a metered dispenser such as a gas pump, or at a restaurant where you leave a tip of your choice, or at a fast food establishment where you can add on cheese or extra sour cream for 10 or 20 cents, or through eBay/PayPal when you can enter your own shipping price for an item. This way, you can ensure that you always receive the maximum match with each purchase by ensuring that the total is at or above, and as close as possible to, a whole dollar amount plus one cent. If you wanted to live on the edge, you could buy only a few gallons of gas at a time — not a bad strategy considering that gas is currently $3 or more per gallon. You could also try asking for cash back when you use your check card at grocery stores, but I’m not sure if non-whole-dollar amounts are acceptable to them.
If you have a utility bill such as cable, telephone, mobile, or DSL which accepts credit/debit transactions, you can try paying the bill in small increments. Remember to make sure it is debited as a debit or Visa purchase, not a EFT. Ensure that each payment is for a different amount so the multiple transactions don’t look like a mistake or fraud.
Examples:
- When paying a phone bill “now”, AT&T allows up to 4 payment sources to be made at a time, as long as the total payment is at least $5. Pay 1.01, 1.02, 1.03, 2.01, for a total of 5.07, and repeat.
- Sprint PCS allows up to 2 credit card payments in 14 days to be made. Pay 1.01 and 1.02.
- A local DSL provider allows as many payments as you wish to be made until the bill is paid. Pay 1.01, 1.02, 1.03, 1.04, 1.05, 1.06 ….
You can pay a charity fund which has a Paypal account in small increments. Paypal eats the fees if it is a special fund. There was a Hurricane Katrina fund which has since been closed. Note that this is not the same as paying a charity which happens to take Paypal, in that case the charity is eating the fees, bad move.
If you have a Paypal merchant or Google merchant account, you can pay that account from your personal account in small increments. You do lose some money to fees in this case, so be careful to watch the fees they are charging. Again, make sure it is debited as a debit/Visa not EFT. Also be aware that if you have a Paypal balance, Paypal will debit it first before going to your check card. So make sure you have transferred all of your money out of Paypal first.
You can also pay Ebay seller fees in small increments, but only if you copy the link that redirects you to Paypal and open up all of the transactions you want to make BEFORE completing the first one. The reason is that Paypal will not let you start more Ebay transactions after a few have been made, but it will not halt those which have already been started.
Since you can earn a maximum of $250 per year, your best strategy is to make 252-253 purchases in the first three months if possible. This is about 21 purchases per week, or three purchases per day. This strategy is defeated if you waste money on purchases that you would not otherwise have made, so be careful!
Rewards credit cards
If you have rewards credit cards, then there is further strategy to be realized.
To game this system requires that you first realize that the maximum profit per transaction is $0.99 during the first three months, and $0.05 thereafter. We assume that you are maximizing this profit below, otherwise the calculations are quite complex. I am also assuming that you pay no interest on the credit card purchases due to a grace period.
First three months
In the first three months, a $19.01 purchase that you make $0.99 on would net approximately a 5% return. If you have a credit card that offers 5% cash back on the same purchase, at this point the return is equivalent. At or below $20.00, you should use your check card, but above $20.00, you should use your 5% cash back credit card. A $1.01 purchase would net almost 100% cash back with the check card!
If you only have a credit card that offers 1% cash back or less for that purchase, then you should use the check card when the purchase price is below $100, and the credit card when the purchase price is above $100. If the return is 0.5%, then $200 becomes the critical price for the first three months.
So, for the first three months, if you have constructed a purchase with a maximum change matching:
- If purchase price is above $20, use a 5% cash back credit card if you have it, otherwise use the check card
- If purchase price is above $100, use a 1% cash back credit card if you have it, otherwise use the check card
- If purchase price is above $200, use a rewards credit card if you have it, otherwise use the check card
After the promotional period
After the first three months, the maximum $0.99 return nets you only $0.05. The critical price compared to a 5% cash back credit card is then $1.00, compared to a 1% cash back card is then $5.00, and to a 0.5%-1% rewards card is between $5.00 and $10.00. Thus, after the first three months, you should always use a rewards credit card instead of the BoA debit card, UNLESS the purchase price is less than $10.00.
For specific strategy, after the first three months, if you have constructed a purchase with a maximum change matching:
- If purchase price is above $1, use a 5% cash back credit card if you have it, otherwise use the check card
- If purchase price is above $5, use a 1% cash back credit card if you have it, otherwise use the check card
- If purchase price is above $10, use a rewards credit card if you have it, otherwise use the check card
After the first three months, since you are only making a maximum of a nickel per purchase, you might reconsider whether it is worth the effort to put any thought into the game, since you can earn far more money for example by being wiser with your spending habits.
Addendum
Some people have reported that BOA will decline multiple 1 cent transactions issued in a row. Automated gas pumps will also blacklist you if you buy penny amounts too often. So spend at least a whole dollar in each transaction. You may get a hold on your account if you use a credit card for small amounts too often. You can help yourself avoid getting stuck with a hold by making sure automated machine transactions, such as those at gas pumps and at the USPS lobby kiosk, are processed as a debit transaction and not a credit transaction.