How Much Can You Really Make From Chasing Bank Bonuses?
You may have heard of people shaking up credit card welcome offers, but what about bank bonuses? Many banks offer cashback of $ 400 or more when you register a new checking account and it is certainly possible to cycle through new accounts just to accumulate bonus money. Banks don’t want to make it easy for you, so there are several factors to keep in mind: you need to start with a sizeable bankroll, it can be difficult to manage the process, and over-diligence can lead to banks limiting your bankroll. the ability to open new accounts.
Can you really make money by shaking up bank accounts?
Yes, it is possible – serious bankers pushing away bonuses claim to make around $ 500-1500 a year after taxes (yes, these bonuses are taxed as income). Requirements can vary from bank to bank, but the steps are relatively straightforward, assuming you have a bankroll of between $ 1,000 and $ 10,000 that you can keep for an extended period of time. To qualify for the bonus, you may need to complete one or more of the following steps within several months of opening an account:
- Save a minimal dollar amount with direct deposits from your employer or government.
- Reach your spending goal by shopping with your debit card.
- Deposit a certain amount of money and leave it for a certain period (often, the more you deposit, the greater the bonus).
Bonuses usually range from $ 50 to $ 400, so it shouldn’t be difficult to make some money on a few new accounts, as long as you’re organized and ready to do your homework. And doing your homework is necessary as there are certainly drawbacks to consider.
Disadvantages of Foaming Bank Bonuses
Since banks do not approve of churn (they only make these offers because they want to keep you as a customer in the end), they are not going to make it easy for you. Here are some of the obstacles you will have to face:
- Direct Deposit Limitations: Many banks require an ACH direct deposit to be set up in your account within a certain number of days. This is usually okay if you get paid by direct transfer from your employer or government, but if you change your bank accounts, you have to deal with the hassle of changing your bank information multiple times with the help of HR or the IRS. There are ways to set up direct deposits between separate bank accounts, allowing you to manage the process yourself, but that can be tricky too .
- Cash Up Front : To get the most out of your investment, you may need to deposit thousands of dollars when you open an account and keep it there for several months (which can also help you avoid any associated monthly fees). Not everyone has $ 10,000, but you will need a chunk of about this size to take advantage of the larger bonuses.
- Restrictions in small print: Each bank is different and the one (s) you are targeting may limit the number of accounts you can open in a year, charge a closing or balance fee, or require a certain number of transactions each month. Most accounts only require a soft credit check to open an account (which won’t affect your credit score), but you’ll want to double check the terms and conditions to make sure you’re not affecting your creditworthiness in the process.
- Banks may restrict your ability to open a new account. This is a significant risk as many banks use something called ChexSystems to track the history of your applications across multiple financial institutions. If you open too many accounts in a year, the bank can essentially blacklist you for several years, and it can be a real headache to deal with . Worst of all, there is no exact figure for how many accounts you can safely open, which is why banks pushing bank bonuses are closely monitoring the failure rates of various banks .
It makes sense to chase the odd bank bonus, especially if you’ve gotten a good offer, but if you want to maximize your profits, get ready for a long hassle. Turning this into a side activity is probably not worth the risk of being blacklisted by banks, but there is definitely money to go with.