Opening A New Bank Account Using Credit Card Rewards

Did you know you can open a new bank account using your rewards credit card?

If you happen to chance upon a great bank offer for a savings or checking account but don’t have the money to fund it yet, some banks will allow you to use your credit card to seed the money. In fact, some people are doing this to arbitrage rewards points in a big scale.

For instance, if you have a rewards credit card with a credit limit of $20,000, you can open a new bank account and fund it with a full $20,000 from the card. If the bank account has a maintaining balance of $1,000, you can withdraw the $19,000 and pay it back to your credit card balance and use $1,000 of your own money to settle the remainder. If your card offered 1% cash back on its reward program, that’s easily $200 credited to your account, without a single penny lost on your part.

If your banks allow you to open an unlimited number of accounts, you can literally do this non-stop, provided you have enough money of your own to keep an adequate maintaining balance on the bank accounts. If you have enough rewards cards with no cap on the amount you can earn, that’s a theoretical whole lot of money.

Want to know which banks allow depositors to fund new accounts with credit cards? Check back tomorrow for our list!