You may have heard of people “troubledThrough credit card welcome offers, but what about bank bonuses? Many banks offer $ 400 cashback or more when you sign up for a new checking account, and it is certainly possible to scroll through new accounts just to collect bonus money. Banks don’t want to make it easy for you, so there are a few factors to consider: You need to start with a sizeable bankroll.
Can you really make money with bank accounts?
Yes, it is possible – serious bank bonus graduates claim they can get around $ 500- $ 1,500 per year from practice after paying taxes (yes, these premiums are taxed as income). Requirements can vary by bank, but the steps are relatively simple, provided you have a bankroll of between $ 1,000 and $ 10,000 that you can sit around for an extended period of time. To qualify for a bonus, you may need to do one or more of the following within a few months of opening an account:
- Save a minimum amount in dollars by making direct deposits from your employer or the government.
- Achieve a spending goal by shopping with your debit card.
- Deposit a certain amount of money and leave it there for a set period of time (often the more you deposit, the bigger the bonus).
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The bonuses usually range from $ 50 to $ 400. So making money with a few new accounts isn’t hard, provided you’re organized and ready to do your homework. And it is necessary to do your homework, as there are certainly disadvantages to be aware of.
The disadvantages of bank bonus churn
Since banks disapprove of churn (they only make these offers because they want to keep you as a customer), they won’t make it easy for you. Here are some of the obstacles you will face:
- Direct deposit restrictions: Many banks require one ACH direct deposit be set up in your account within a certain number of days. Usually this is not a big deal when paid by an employer or the government through direct transfer IRS. There are ways to set up direct transfers between different bank accounts so that you can manage the process yourself. but that can get complicated too.
- Cash in advance: To get the most out of your money, you may have to deposit thousands of dollars when you open the account and park it there for months (which can also help you avoid associated monthly fees). Not everyone has $ 10,000 lying around, but you need a portion that size to take advantage of the bigger bonuses.
- Limitations in the fine print: Every bank is different and the bank you target may limit the number of accounts you can open within a year, impose transaction or balance fees, or require a certain number of transactions each month. Most accounts only require a gentle credit check open an account (which won’t hurt your creditworthiness), but you should double-check the terms and conditions to make sure you don’t affect your creditworthiness in the process.
- Banks can limit your options for opening a new account. This is a significant risk, as many banks use so-called ChexSystems to monitor your application process across multiple financial institutions. If you open too many accounts in a year, a bank can essentially blacklist you for a few years, and Dealing with it can be a real agony. Worst of all, there is no fixed number of how many accounts you can safely open, which is why bank bonus graduates closely monitor the rejection rates of various banks.
Bottom line
It makes sense to chase after a few bank bonuses – especially if you get a good deal – but if you want to maximize your winnings, prepare yourself for a time-consuming hassle. Turning this into a part-time job probably isn’t worth the risk of being blacklisted by banks, but there is definitely cash to take with you.
