Credit and Personal Finance Blog | Credit Karma

March 1st, 2010

Offer: $600 free from WTDirect — Sign Up Now!

If you were thinking about opening a high-yield savings account with a large deposit, you’ve hit the jackpot with this generous offer from WT Direct that earns you a substantial amount of money while you squirrel it away. Credit Karma teams up with WTDirect to bring Credit Karma members a very exclusive offer to open an 1.26% APY on high-yield online savings account that can earn up to $600 cash. That’s right, $600 cash!

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February 28th, 2010

Favorite Product Picks for February

Every month, Credit Karma hunts through the top financial products to bring you our favorite picks, what we loved about them, and why you should give them a try too.

In February, we are focusing on offers that have the Best Service and came up with three that we just can’t stop raving about. If you want to treat yourself to a little TLC in your personal finance life, the following picks are sure to deliver.

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February 24th, 2010

Should You Stick With A Bank Or Switch To A Credit Union?

In light of increasing credit card fees and loopholes in the CARD Act, fed-up consumers are ditching banks for credit unions to take advantage of lower interest rates, better banking practices, and consumer-friendly policies. Credit unions continue to have some of the best deals on credit cards as well as a consumer-friendly approach that is a welcome reprieve from exorbitant credit card fees and predatory practices. But just how do credit unions measure up against big banks?

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February 15th, 2010

Compare And Choose An Online Savings Account

Americans’ renewed sense to save money is the silver lining of this rough recession. The personal savings rate averaged nearly 4.6% in 2009, while for most of the decade it barely reached 2.5%, reports the U.S Department of Commerce. As more and more consumers make their savings accounts a priority in their personal finances, the key features of online savings accounts will determine what the best-fit piggybank is for each individual.

Do you need a long-term hold on your money, or the ability to move money rapidly? Do you demand excellent customer service, or are you more concerned with restrictions on your account? Online savings accounts aren’t one size fits all; check out the following chart to learn more about which provider meets your needs.

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February 8th, 2010

Ally Bank’s New Interest Checking Account & 2-Year CD Upgrade

Ally Bank, the fastest growing online bank in the country, has recently expanded its financial products to include an online checking account as well as an upgrade to their 2 Year Certificate of Deposit (CD). As consumers and the federal government continue to dole out criticism on brick-and-mortar banks’ excessive fees and punitive penalties, Ally challenges other financial institutions by ensuring a consumer-friendly approach and focusing on offering solid products with superior customer service. Check out Ally Bank’s latest:

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January 28th, 2010

New Opt-In Overdraft Rules For Checking and Debit

Starting July 1st, banks can no longer charge overdraft fees on debit cards or checking accounts without explicit permission from customers. Currently, banks automatically enroll customers in overdraft protection; the new reform gives consumers the choice to opt out of overdraft protection, and instead have their debit card declined or ATM withdrawal restricted if they overspend rather than be covered by the bank at steep fee. The choice to enroll in overdraft protection, which typically costs accountholders $30-$35 to cover overdrafts, is part of the government’s series of reforms on the credit and banking industry instituted last year.

Government officials cite that banks receive $25 to $38 billion a year in overdraft fees. For banks, this new rule will result in an enormous drop in revenue. With this much profit at stake, the nature of free checking accounts may change in the coming year while banks attempt to convince consumers of the benefit of overdraft protection in order to pad their bottom line. Overdraft coverage and other fees subsidize free checking accounts and banks profit from careless customers and frequent overdrafters.

Consumers should be prepared for banks’ possible reaction to the reform; don’t be surprised if banks start charging monthly fees on free checking accounts to recoup losses, and banks will likely bombard consumers via email, snail mail, phone calls, and even text messages urging them to sign up for overdraft protection. The New York Times blogged that a marketing company that works with 7 of the 10 largest credit card issuers is planning to target and market overdraft services to “higher value” customers, i.e customers with a propensity to overdraft.

Overdraft protection will most benefit customers who want the security and peace of mind of being covered by the bank in case they are at the cash register or ATM with insufficient funds. While overdraft protection means consumers don’t need to worry about being declined, in an extreme case, overdraft protection could result in hundreds of dollars in fees for multiple transactions on an overdrawn account. Overdrawing $3 for a cup of coffee and $2 for a pack of gum in a single day would slap you with a $70 fee.

Take note: the new rules don’t apply to overdraft protection for bounced checks and automatic, scheduled transactions, only debit card purchases. After July 1 for new accounts, banks will give consumers full disclosure of debit card and checking account policies, and will not be enrolled in overdraft protection without their permission; for existing accounts, banks can continue to keep customers automatically enrolled until August 15, at which point customers can opt out. Whether you think overdraft coverage is a privilege or predatory practice, consumers will soon have the choice to decide for themselves.

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January 25th, 2010

Big Banks and Credit Card Issuers Lend a Hand In Haiti Relief Efforts

Opening your heart and your wallet to relief efforts in earthquake-ravaged Haiti can be done by credit card, text message, and even through your iPhone thanks to companies’ innovative charity campaigns. Credit card issuers and banks have been particularly active in supporting Haiti relief efforts, with nearly every major financial company–from JPMorgan Chase to Goldman Sachs– facilitating donation programs or pledging donations themselves.

After media outcry criticizing credit card companies for taking a cut of “transaction fees” from cardholders’ charitable donations to Haiti relief efforts, American Express, Visa, Discover, MasterCard, and others have waived transaction fees for donations to charities. All of the familiar names in the financial sector are also contributing to the cause: Goldman Sachs, JPMorgan Chase, and Morgan Stanley are donating $1 million to the Red Cross and other charities; Citigroup, which has a branch in Part-au-Prince, Haiti, is donating $2 million plus supplies; Jefferies Group, an investment bank, donated a day’s worth of trading commissions totaling $5 million, and topped it off with an additional $1 million donation from the bank itself.

If you want to contribute personally to recovery and rebuilding efforts in Haiti, consider the following company initiatives committed to lending a helping hand:

• Discover cardholders can donate their CashBack bonus points to the American Red Cross, in addition to donating directly to select charities minus transaction fees. Discover is also matching cardholder donations dollar-for-dollar, plus an initial $100,000 company contribution. This is your opportunity to convert cashback bonuses from a shopping spree into a life-saving donation.
• In addition to waiving transaction fees, Bank of America is allowing consumers to make donations at their bank locations. Whether you show up at a BofA branch or donate via credit card, 100% of your money will be given directly to the charity of your choice. Bank of America has also committed $1 million to relief charities and pledges to match donations made through the Matching Gifts program, with no cap to their overall contribution.
• Take 30 seconds to contribute $10 to the Red Cross by texting “Haiti” to 90999 (charge will be added to your monthly cell phone bill). This successful “mobile giving” texting campaign has spread through social media networks Facebook and Twitter like wildfire, raising $10 million in its first week. Yele Haiti Earthquake Fund is another texting campaign, just text “YELE” to 501501 to donate $5. It’s such a simple and easy way to do your part to help out in Haiti.
• Gamers can contribute too by playing video games online or via iPhone. AppRelief features iPhone apps that will donate 100% of profits to the Red Cross. Also, video game website IGN is hosting a Haiti Charity Event webathon on Jan 27; tune in to donate to Habitat for Humanity or bid in a charity auction while getting your fill of video game entertainment.
• Several airlines, hotel chains, and businesses in the travel industry have come up with creative ways for customers to support Haiti relief efforts by donating airline miles, hotel loyalty points, or supporting travel companies that will do charitable donations on consumers’ behalf. Check out this Los Angeles Times blog post for a list of participating companies.

Whether you charge a donation to your credit card or text to a charity, please take advantage of these humanitarian opportunities to support relief efforts in Haiti by contributing and spreading the word.

At Credit Karma Blog, what goes around comes around… So what do you think about this post? Agree, disagree, or have something more to say? We’d love to hear your reactions!

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January 13th, 2010

Hot Banking Deals: Open An Account And Get Free Money!

Who says you can’t get free money? Check out these limited-time offers from these banks to pad your savings with cash.

(Disclaimer: Read all fine print on any offer before you sign up to make sure you qualify for the cash incentive. Also, make sure you will use the account or card appropriately or else the bonus you receive may be negated by additional banking fees or charges. Aside from that serious note, here are free money opportunities that won’t be around long!)

• $35 to use Bank of America’s Online Bill Pay
  If you are a current Bank of America customer, you can receive $35 in your personal or small business checking account for setting up online bill pay. Make three online bill payments within 30 days to get $35 OR 2 online bill payments within 30 days to get $25, and Bank of America will deposit the cash in your account. It’s that simple.
• $100 from Bank of America to Open a Checking Account
  Switch to Bank of America and receive $100 bonus for new customers with a qualifying personal checking account with a minimum balance of $500. The account must be open for at least 30 days and you must make at least one transaction on your new check card. Tip: if you open from a branch, the MyAccess Checking account is charged a monthly maintenance fee; open online and there is no fee. Offer expires February 28.
• $25 from ING Direct for Electric Orange Checking Account
  Sign-up for ING Direct’s Electric Orange Account and activate your accompanying debit card with 3 signature-based debit purchases within the first 45 days of opening your account, you’ll get an extra $25 deposited into your account. Consider this free money just for using your checking account as you normally would.
• $50 for signing up with PerkStreet Financial
  New customers can open a PerkStreet Financial checking account with a minimum $25 deposit; keep your account active for 3 months, and receive a $50 bonus. Keep your account active by using your debit card, writing a check, using online Bill Pay, or initiating a withdrawal or deposit on the account at least once a month. Check out a review of PerkStreet Financial to learn more.
• $200 to open a Chase Business Checking Account
  For a larger cash bonus, open a qualifying Chase business checking account with a minimum deposit of $500 (must be “new money” not previously held by Chase or affiliates) within 30 days of opening and you get $200. Sign up for a User ID at Chase online and you’ll be able to view the above link properly to avail of the offer. Or, call or visit a branch to apply. Offer ends January 30.
• $200 to open a Union Bank Checking Account
  Here’s another high money offer; open a signature checking account with Union Bank to earn $200 by doing two of the three actions: make 3 online bill payments, initiate monthly direct deposits, or make 5 debit card purchases. If you sign up for only one service, you still get a $100 bonus. However, Signature Banking requires a minimum combined average monthly balance of $10,000.

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December 29th, 2009

Capital One’s SmartCents Review

Capital One’s SmartCents program is making it easier for consumers to tuck away more money in their savings, with the help of Capital One chipping in a few cents.

SmartCents enhances your savings for certain transactions you do on your checking account: for every debit card purchase, online bill pay, or direct deposit, Capital One automatically transfers $.50 from your checking account to your linked savings account, plus Capital One will match 100% of your SmartCents transfers for the first three months, and then 5% after that. Now, if you aren’t a heavy debit card user, the 5% matching contribution may not provide enough benefit to switch to Capital One. Or if you have a hefty-sized checking account, a high-yield checking account or money market account may grow your money faster with high interest.

The first three months are your optimum earning window, when 100% matching power means that saving $100 in SmartCents transfers will earn you $100 of free money, courtesy of Capital One. There is an annual matching contribution cap of $300, which bests the $250 cap of Bank of America’s comparable Keep the Change program.

An extra benefit in this program is Capital One’s current promotion that offers new customers a $15 bonus for the first direct deposit and an additional $15 for the first online bill payment. That is an extra $30 in free money.

For debit card users looking to save more, this is a great deal. It’s a truly free checking account that earns you extra change for your savings with no additional monthly service fee, minimum balance requirement, or maintenance fee. However, you are required to open a savings account and options are limited: the free, no minimum balance Simple Savings account is not available in all areas, and the InterestPlus Online Savings account earns a respectable return of 1.6% APY with a minimum balance of $2,500, but 0% APY for accounts less than $2,500. If you want better earning power than that, you may have to open an outside savings account.

More and more programs, such as BofA’s Keep the Change, Wachovia’s Way2Save, and US Bank’s START, have banks chipping into consumers’ savings. What makes SmartCents a great savings program to enroll in right now are the additional incentives, like the $30 bonus and the first 3 months of 100% matching contributions, that will add an extra jingle in your pocket.

At Credit Karma Blog, what goes around comes around… So what do you think about this post? Agree, disagree, or have something more to say? We’d love to hear your reactions!

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November 25th, 2009

Best Bets in High-Yield Savings Accounts

Looking for the best online savings account with the highest interest rate? It took the wake-up call of the worst recession in recent history, but Americans are beginning to save their money more than ever before. Conscious consumers have saved up a total of $10 trillion this year in bank savings accounts, savings certificates, and money market mutual funds, reports the LA Times.

Unfortunately, interest rates for savings accounts aren’t as high as they used to be. The government’s unprecedented actions to drop interest rates to record lows has been great for cash-strapped borrowers, businesses, and banks, but it has also meant lower interest rates for bank account holders. However, online savings account can give a much better return for your savings than your average bricks and mortar bank, for which the national average is only 0.31% APY, and is less risky than playing your savings in the stock market.

If you are thinking about switching to a high-yield savings account or opening up one for the first time, we have compiled the following list of some of the highest yielding savings accounts to put your savings to work (all featured banks require no minimum balances, no fees, and are free to sign up). With economic recovery slow and shaky and the holiday season in the air, having a solid savings plan is the best way to ensure you have sufficient savings in your bank account for the upcoming year.

*as of November 23, 2009; variable rates subject to change

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