Recommendation for a debit card with auto-savings/investing?

Anyone have a debit card they’d recommend that works with Tiller and has some kind of automatic savings/investing features like:

  • rewards to savings

  • dollar round-up to savings

  • or any other type of auto-savings or auto-investing feature?

It would be great to get first-hand intel from others using Tiller. TIA!

I use the discover checking 1% cashback debit card i believe it’s up to $3k spend per month when using debit

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If you are using a debit card, then obviously you have the money to pay for your purchase. It is much smarter to use a credit card instead and pay your balance in full every month on the last day the payment is due, completely avoiding any credit card interest. Why? Because of the time value of money. With the credit card you are, on average, getting a half-month float – the use of the credit card provider’s money – interest free. You are therefore holding onto your own money longer, drawing interest on it. You should always try to pay for things as late as possible for this reason. With a debit card, you are paying for your purchases immediately. Not smart.

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I have been using Onyx. Their premium account does have a monthly fee but you get $20 cashback per month on $2k of CC bill pay, $100 cashback per month on purchases (1%-5% depending on category), and 0.45% on just about everything after that making it quite positive for me. There is also some nice random incentives like referrals and a direct deposit bonus since they’re relatively new and trying to boost their user base).
I primarily use CC but this provides a good option for some expenses I have that can’t be paid with credit cards.

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This is good advice for some, terrible advice for others. It only works as you describe with a good amount of discipline. For anyone transitioning out of credit card dependence and trying to stay away from debt, this could be a slippery slope back in. Yes, you make sense factually but there are other factors to consider.

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Hello,

I appreciate that you are helping educate others regarding some differences between the use of debit and credit cards, but I would like to offer constructive criticism. I, too, use my credit card to pay for the vast majority of purchases and pay it off the following month in full. I do this for three reasons. The first is the one you mention above. Second, I do it because I have yet to find a better cashback offer to maximize my purchases (2.5% on everything). Third, managing revolving debt is a great way to build and maintain your credit score.

Where my constructive criticism comes into play is word choices. Your guidance helps maximize the benefits between the two scenarios, but calling the other scenario (using a debit card) “not smart” is less helpful. There are several reasons that someone might choose to go that route, including poor/building credit scores that prevent qualifying for a “good” credit card, establishing/needing discipline to know they have the funds to pay for the purchase, or even simplicity in managing financial institutions (one bank/credit union instead of multiple).

I choose to believe your heart is in the right place to help the community. I hope that we - as a community - will be aware of not only WHAT we say but HOW we say it. Thanks for reading.

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I agree, but am curious about the provider of your 2.5% on everything card. I acquired the Chase Amazon card right before they downgraded from 5% on Amazon purchases to 2%. Now it is a much less exciting card. I did much less than an exhaustive search for “best” rewards cards before choosing a couple. I’d love to hear about some community faves… and I bet there’s a thread for that already.

On the note of debit vs. credit, I couldn’t agree more that credit is a necessary evil in this life. Although I am lucky enough to have family funds to tap for large loans, there are still many scenarios in life that you will want or need some healthy credit, even if you are unconcerned with maxing your rewards. I am 45 and giving credit it’s due-“credit” (ha) for the first time. The rewards really add up, especially with even small business spending. Managing credit in a safe and beneficial way certainly takes discipline and a healthy perspective. If your perspective on building and expanding credit lines is anything different than 1) rewards $$ and savings interest, 2) safety, and 3) necessary evil, you could have problems. At 19, I wasn’t ready for it- I looked at it as a line of credit/loan (implying low interest) without a true understanding of how the high interest rates can get totally out of control. Out of control it got- the balance transfer game didn’t help. I was also on the kind of tight budget most people are, so even the slightest over-leveraging of revolving credit caused a one-way ticket to credit disaster. Short a rare emergency or safe leverage opportunity, never spend more than you can pay off in full monthly. I’m a financial “idiot”, but life/time forced responsibility and learning. I’d love to hear any professionals’ criticism’s of my feedback.

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I’m confused. My Chase Amazon Visa card still pays 5% back on purchases at Amazon.com.

Two reasons why I don’t use debit cards. 1) I have always looked at debit cards as a security risk. It has always been my understanding that if your debit card is stolen, the thief has direct access to your account(s) and can drain them very quickly and you have very little recourse. If your credit card is stolen the CC companies will work with you to rectify the problem. 2) I guess I am from the “old school” so to speak. I have always believed that you never charge more than you can pay each month. That has been my mantra for the last 50+ years. It can be difficult to do it at times, and there have been a few times over the years that I have ended up paying CC interest for a month or two. I would rather pay the very occasional CC interest vs risking have my accounts drained due to a debit card theft. I also do love the cash back rewards that we get. Depending on the card 2% on everything, 6% on groceries, 3% on gas, etc. Just my 2 cents.

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It should be noted that with proliferation of card skimmer your credit
card is protected from fraud. A debt card means your bank account is empted. Yes you may recover but the hassle is a real danger. Most skimmers have been know to be installed in gas stations. One was reported on a self check out in Walmart last week.

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Many years ago I used my debit card and checks to pay bills. About 6 years ago I transitioned to using credits cards to pay for everything except when the retailer charged a fee for using a cc. I pay the cc’s off every month before the bill is due and never use the cash back option to pay part of it off. If you use the cash back to pay off part of the statement, you will lose the part of your part of your refund incentive. I direct the cash back incentives into my checking account. With Tiller, I categorize the cash back as “Income: Refund/Other” for tracking purposes. The last few years I have also paid off my credit cards when the total statement is between $500 to $1000 to keep my credit utilization low. If I have a very large purchase over $1000, I will pay of the exact amount the same day for the same reason, minimize reported credit utilization to help maintain or improve my credit score. I use the Chase Freedom and Prime cards. There is a site, believe called Bankrate where you can enter theoretical charges by type, and it recommends the best options for your type of spend… Recently AT&T mobile starting charging $10.00 for using a cc and still offer a discount with autopay, thus forcing you to use a debit card. In my case, thats a 5% surcharge! I am at odds with this and may switch away from AT&T as I don’t want them linked directly to my debit card. Another advantage of using a cc is that you have a bit more support/security to challenge and reclaim fraudulent/poor retailer charges, although not bullet proof.

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Krista,
I would recommend using a CC for your purchases due to all of the reasons already posted.

As to your other questions, I use Fidelity’s Spending Account (aka checking) and it lets you store your cash in a separate higher yielding account so you can earn more on it.

In effect, you set what the minimum balance should be in your primary checking account based on your own comfort and then any excess cash over that amount is stored in a second account making higher interest for you (also more risk). Anytime your primary checking account falls below the minimum they automatically move money into it and you don’t have to worry about it.

Might be an auto savings feature worth considering whatever you end up choosing. Others beside fidelity offer that.

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These are all great and helpful points. Thank you for sharing!

I agree with so much of what’s been said here! As someone who is always looking at ways to optimize my finances, I thought there must be some good debit card options to use for those rare expenses that still have surcharges when paying by credit card (kids gymnastics classes, for example), and still get some benefits.

I also found that Greenlight offers a kid’s debit card with parental controls and some level of cashback and savings rewards. I don’t know much about it beyond that, but could be a great learning tool to investigate as kids get older.

Thanks again for the responses so far!

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I use Yotta for many bills and Venmo actually just came out with a teen card which might be a good option.
One other thing I do is use a Privacy card if I’m making a purchase online. I use 1password and it automatically creates a Privacy card if needed which then pulls out of my debit card.

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I am not a millennial so maybe I should be quiet. But, I don’t use/or sparingly use a debit card simply because of security. I use a credit card because the most I am accountable on it is $50. I have had several credit cards compromised and was never required to pay a cent and usually reported it within weeks. Credit cards provide protection that debit cards don’t provide. As far as the debt side of credit cards…just pay your balance off every month. Yes, it take discipline and some cashflow planning but once you get used to it, it is easy.

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These really are all great. I’ve twice had checking accounts with debit cards that were hacked and drained. Both we because of hacks from online stores. In both cases my money was eventually returned, but it was stressful. Even temporarily losing access to cash could snowball badly for many families today. For example, a delayed rent payment or inability to buy groceries for a week or longer.

Yikes. I’ve heard the cautions and other scary stories about debit cards similar to @Edward’s above.

One helpful debit card habit I’ve adopted is keeping any debit cards locked. My current bank makes it easy to temporarily lock/unlock a debit card via their mobile app or online banking site. No charges can go through unless I’ve unlocked the card.

Anytime I need to make a purchase specifically using a debit card, I literally go into the mobile app, unlock the card, make the purchase, and then lock the card again.

Maybe it’s a little paranoid, but it does give me peace of mind since the protections can vary between credit cards and debit cards. If I move to a debit card with better rewards, I’d definitely want that temporary lock/un-lock capability.

[Part of the reason why that works for me is because automated payments that I don’t know exactly when they are going to process are set up with a credit card to pay off every month (like it sounds like a lot of others in this thread are doing too). Then I don’t have worry about a wanted subscription getting canceled because my debit card is locked.]

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