Bank of America's "Keep the Change" Program Not All It's Cracked Up to Be

I'll be the first to admit that on face value Bank of America's "Keep the Change" program is pretty appealing. They will match 100% of your funds during the first three months you're enrolled in the program. "Match" and "100%" are code words for "free money." As I like to say, you can't beat free.

So what exactly IS the program? Bank of America debit card customers with both check and savings accounts are eligible. Your debit card is linked to your checking account. Whenever you use your debit card to purchase something, Bank of America "rounds up" the total and puts it into your savings account. For example, if you purchased something for $9.80, an even $10 is taken from your checking. The extra 20 cents is placed in savings. During the first three months of your enrollment, Bank of America would match the 20 cents in your savings giving you a total of 40 cents. In essence, you earned 20 cents of "free" money (assuming the item you purchased for $9.80 was actually needed and not obtained simply for the 20 cent match).

The money can add up pretty quickly. When pumping gas, I would always go 1 cent over. If I wanted $20 of gas, I would get $20.01. That extra penny of gas netted me 99 cents of free money courtesy of Bank of America. I did the same thing when leaving tips at restaurants. If I had a bill for $10.71, I would tip $2.30 so that my total would be $13.01. This match even worked when paying bills by debit card.

In short, every time I used my debit card during the first three months, I earned 99 cents. I didn't use mine a lot, but I still made about $40. Not too shabby, eh?

Of course, after three months things change. You no longer earn a 100% match. You earn a 5% match. That means going 1 cent over nets you a shade under 5 cents per purchase. Use your debit card 20 times a month and you almost make $1.

So what, you say? Free is free, right? True, but to make any noticeable money after three months you have to use your card a lot. That is what Bank of America is banking on - people making extra purchases they would not normally make simply so that they can earn the "free" money. Rewards credit cards work the same way. The difference is the amount you can earn with a Rewards card is tied to the purchase price - buying a $200 DVD player with a Rewards card will earn you more than a 6-pack of Coke Zero would earn. With Bank of America's program, it wouldn't matter. You could use your debit card to purchase Air Force One and it would earn you the same amount as a candy bar - a shiny 5 cents.

For those able to beat the system and not make extra purchases, Rewards credit cards can earn you some nice change so long as your balances are paid in full each month. If you fall into that category, you won't be hurt by Bank of America's program, but you won't exactly be helped either. You'd be much better off using Bank of America's program for three months, file away the debit card when the three months are over (i.e. stop using it), and then use a good Rewards credit card from that point on.

Oh, did I mention Bank of America doesn't actually give you your earnings until 13 or 14 months after you first enrolled in the "Keep the Change" program?

It looks like I'll have to wait quite a while for my $40.