Save to give: switch banks

By Pat Myron @ 2022-12-11T08:53 (+17)

(American example based on https://www.effectivealtruismdata.com/ demographics, but same principles apply broadly)

tl;dr save thousands every year with no spending/saving/investing behavior change by switching to high interest saving accounts and cashback credit cards

Credit cards:

• Cashback: ~$1000/yr: Debit cards are still used more than credit cards in America,^[1][2][3] even though American credit cards with no annual fees offer at least 2% cashback on all purchases.^[4][5] Americans spend ~$10T annually across payment card types (~$50k/adult).^[6]
• Cashflow: ~$500/yr: Unlike debit cards, credit card statements are paid a month or two after the actual purchases, allowing interest accumulation in the meantime. Treat credit cards like debit cards and do not spend money you do not have. Set up automatic payments to always pay monthly statements in full.
• Credit score: $?/yr: Responsible credit card use improves credit scores, which lowers interest rates on money borrowed going forward. Most American household debt is mortgage debt,^[7] but this will also get better rates on other loans like auto and student loans.
• Better fraud protection: $?/yr

Bank accounts:

• Interest: ~$3000/yr: American savings account interest rates average ~0.2%,^[8]  even though many savings accounts and money market funds offer well over 3% interest rates and rising.^{[9][10][11][12]} Americans average ~$40k in savings; Americans with bachelor’s degrees average ~$80k in savings.^[13] (tax filing should include any savings account interest)
• Avoiding fees: ~$100/yr^[14]: Your bank should not charge ATM/overdraft/excessive transaction/minimum balance/maintenance fees (not even for using other banks' ATMs)

1. ^{^}

   https://www.forbes.com/sites/ronshevlin/2020/11/09/the-debit-card-explosion-is-going-to-fizzle/

2. ^{^}

   https://www.spreedly.com/blog/credit-card-acceptance-rates-2019-regional-breakdown

3. ^{^}

   https://www.fool.com/the-ascent/research/credit-debit-card-market-share-network-issuer/

4. ^{^}

   https://www.nerdwallet.com/best/credit-cards/cash-back

5. ^{^}

   https://www.bankrate.com/finance/credit-cards/cash-back/

6. ^{^}

   https://nilsonreport.com/publication_chart_and_graphs_archive.php#:~:text=Consumer%20and%20commercial%20credit%2C%20debit,reach%20%2414.075%20trillion%20in%202026.

7. ^{^}

   https://www.stlouisfed.org/open-vault/2020/april/snapshot-record-high-household-debt

8. ^{^}

   https://www.bankrate.com/banking/savings/average-savings-interest-rates/

9. ^{^}

   https://www.bankrate.com/banking/savings/rates/

10. ^{^}

    https://www.nerdwallet.com/best/banking/high-yield-online-savings-accounts

11. ^{^}

    https://www.investopedia.com/best-high-yield-savings-accounts-4770633

12. ^{^}

    https://www.wsj.com/articles/the-42-billion-question-why-arent-americans-ditching-big-banks-11670472623

13. ^{^}

    https://www.bankrate.com/banking/savings/savings-account-average-balance/

14. ^{^}

    https://www.nerdwallet.com/article/banking/checking-account-fees-study