Freebies For New Accounts

Sign up for a store credit card and receive 10% off today's purchase. Open a checking account at ______ Bank and get a free $100 Visa Card.

Sounds like great offers don't they? Maybe now but in the long run, you're saving nothing.

Many decades ago, banks would entice people to open accounts with toasters and small appliances and they would have a customer for life. This was in the day when banks were locally owned and operated and you had to go to your branch to basically do business. Now that banks are on national networks and are corporate giants, they resort to offering free money to get new customers.

Free money from a bank comes with lots of strings and exclusions. Fees including teller fees, higher overdraft fees, ATM fees. In other words, you could end up paying to use your own money. Many times, the higher the offer, the less accessibility you'll have to your moneys. Limited number of ATMs around town, shorter banking hours or even outdated or slower bank systems. Read the fine print on the offers because that short term perk could be a long term problem.

Store credit cards are notorious for the 10% on the first purchase offer, Macy's, Target, Sears and many others use it. This can be a great value if you pay your balance off before the actual interest rate kicks in. Most store credit card terms hover around 19-20% which means, the 10 percent you saved will be doubled if you don't pay it off by the time the monthly interest rate hits the purchase.