Do you currently have a Reward Checking Account, which offers a great interest rate, but there are pesky qualifications that you need to meet each month? My wife and I have recently run into this issue. We switched banks to take advantage of a 4% interest checking account, but of course, there is a catch if you want to earn this high interest rate.
For our case in particular, we have to use our debit card at least 10 times per month and we have to view our online account at least 4 times per month. If we do not meet these requirements, we earn 0% interest instead of the desired 4%.
Checking out your account online at least 4 times a month is no big deal – I don’t really consider that to be a problem. All of us should be keeping track of our account at least once a week, just to make sure the transactions are accurate, and to verify that we’re staying within our spending plan.
The problem is the 10 debit transactions. I consider it a problem for these 3 reasons:
1) This might cause overspending – What if we only have 7 transactions and there’s only 3 days left in the month. I might start looking for something to spend my money on, and most likely, I don’t truly need whatever it is that I’m buying at that point.
2) We like Reward Points from our credit card – If you currently have a credit card with reward points, you might rather use that than your debit card. It makes it tricky to use your debit card more than 10 times in a month when you really don’t want to use it.
3) Identity Theft – I would much rather hand a credit card to a waiter/waitress than a debit card. If a fraudulent charge occurs on my debit card, that’s MY money, and it’s gone at that moment. You may be able to get money back from the bank, but it sure is a lot easier to see a charge on a credit card and say, “I’m not paying that because it’s not my purchase.”
Good news, I may have found a solution! There’s an online site called, “MicroMaximus” that will automate debit transactions for you!
I’ll use my situation to explain the concept. As stated before, I need 10 debit card transactions. So, I would log into MicroMaximus and set up 10 deductions throughout the month (I can choose any dates I want) for $1.00 a piece. MicroMaximus will take care of the rest. I no longer have to worry about using my debit card, but I’ll reap the rewards of my 4% interest checking!
Is It Worth It?
Now, since those $1 transactions can’t be refunded (if they were, it would no longer count as a transaction), my initial thought was, is this worth it?
Since I would need to schedule 10 transactions each month, this set-up would cost me $120 a year ($1 x 10 x 12 months). So, in order for this to make financial sense, we would need to have at least $3,000 (because $3,000 * 4% = $120 and I would effectively make no money) in our account on average.
If, on the other hand, I had $15,000 in the bank, then I would still earn $480 guaranteed throughout the course of the year ($600 earned through interest minus $120). This would definitely be worth it. I wouldn’t have to think about making any transactions, and I would earn 3.2% on my money.
Is MicroMaximus Secure?
I’m still a little old fashioned I suppose, and I get a little nervous about putting my debit card information out there on the web. I actually expressed my concerns to the owner of the site, and I was quite pleased with his response. When my debit info is submitted to the site, the numbers are automatically routed to a third party credit card processing company (www.authorize.net) and even the MicroMaximus owner cannot see the complete information! After hearing this, I can tell that MicroMaximus is quite secure.
What do you think of this idea? Do you think that you could benefit from these services?
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.