The More Bank Accounts the Better?
September 18, 2007 9:56 AM   Subscribe

Any reason not to open a couple more bank accounts for all the gifts/rewards/incentives they offer?

Right now I have an old bank account from California (checking and savings) and a credit card attached to it which I use frequently, a new bank account for the city I moved to, which doesn't have any branches of my old bank (checking only), and a credit card with a third bank, that I only use a couple of times a year.

This more than covers any banking needs I would actually have, but a number of local banks are offering various incentives to open an account, most enticingly, 75 dollars in free groceries if I set one up.

If I am financially able to park whatever the minimum amount is in a free checking/savings account for a year, is there any other downside to opening up a couple more accounts for the rewards?

I'm specifically wondering if it does any damage to my credit score, as I understand having a number of unused credit cards would. Is there any other reason not to?
posted by andoatnp to Work & Money (10 answers total) 1 user marked this as a favorite
The interest on this money can sometimes be worth more than the promotion they offer, if placed in high-yield online savings instead.

Also, keeping track of multiple bank accounts can be irritating.
posted by grouse at 10:01 AM on September 18, 2007

Deposit accounts don't show up on your credit report and don't affect your score. So, open away! I've collected a few hundred bucks in promos by opening accounts myself. Best deal was when Netbank paid me $175 to open a CD, a money market account, and a checking account with a total of about $1500. The account opening bonus was more than twice what I earned in interest on the money.
posted by kindall at 10:08 AM on September 18, 2007

Overdraft credit lines do show up on a credit report, so be careful that you're not applying for one when you sign up for a checking account.
posted by backupjesus at 10:18 AM on September 18, 2007

BankDeals, along with the FatWallet Finance Forum section are good places to keep up on these deals. FWIW, I haven't seen many 'free money' deals that can be beat by high-yield savings accounts (when you consider the minimums involved), but they all certainly look (to me) like a pain in the ass to accomplish, as most of them require some kind of monthly direct deposit to be set up.

That said, if you can find a way to make direct deposits simple and avoid any sort of transfer/closing fees, it seems like a cool way to make a little extra cash.
posted by fishfucker at 10:19 AM on September 18, 2007

Mind that 'overdraft protection' isn't part of the required agreement on these bank accounts. These are actually lines of unsecured credit, just like credit cards; have very unfavorable terms; and affect your credit report just like opening a new credit card would.
posted by ikkyu2 at 11:11 AM on September 18, 2007

Many of the accounts that require "direct deposit" will happily count a transfer from PayPal or an ACH transfer from another bank account. The latter is especially convenient because many online savings accounts allow transfers to be made automatically on a schedule. So, you get yourself an ING or HSBC savings account and move the same ten bucks back and forth between that and your new account every month until the bonus comes through. Check on Fatwallet for the details of which banks work this way.
posted by kindall at 12:06 PM on September 18, 2007

Having a number of unused credit cards doesn't affect your score, except to possibly raise it through lowering your utilization ratio, unless you only have one very old card which you never use, in which case opening a bunch of new card accounts may lower the average age of your accounts.

Bank accounts don't affect your score at all.
posted by Mr. Gunn at 7:02 PM on September 18, 2007

Annoyance of managing the lot of them mostly.
posted by zackola at 8:28 PM on September 18, 2007

kindall: that's what i thought, but i wasn't sure if there were fees involved w/ ACH transfers or if you had to do something special for it to be considered a DD, etc. I'll have to check that out -- if I can set up the transfers in an hour and then forget about it for three months until it's time to close it, it'd be worth the $75 ... anything more and it's probably not quite worth my time.
posted by fishfucker at 9:59 AM on September 19, 2007

I've been doing it for six months to skirt the monthly fee on my Bank of America checking account, since I switched by direct deposit over to another bank.

I haven't closed the BofA account yet because they are due to give me a nice chunk of change next month -- when you sign up for their "keep the change" program, they match the first three months' worth of round-up. I was buying like $3.01 worth of gas every couple days to get the 99 cent bonus.
posted by kindall at 11:22 AM on September 24, 2007

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