Guest post: Funding bank accounts with credit cards

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[Editor's note: this post was a guest submission by Will from Doctor of Credit. Will previously wrote for the site on the subject of depositing money orders remotely using smartphone apps, which I found to be an immensely helpful resource. I often mention Will as a great resource on his own website and perpetually helpful on Twitter @Drofcredit.]

Introduction: funding bank accounts with credit cards

You can view my favorite bank bonuses here, or a full listing of current bank bonuses here. Awhile ago I posted another guest post on Chasing the Points, with a list of bank accounts that could be funded with a credit card and also included whether opening a bank account with that bank account resulted in a hard pull and if that bank was offering a bonus at the time. That post is now a bit outdated, so I decided it was time to freshen it up. You can view it below, but first a few warnings:

  • Before doing this, make sure you set your cash advance limit to $0. A lot of card issuers will try to charge cash advance fees when funding a bank account, by setting your cash advance limit to $0 you'll avoid this risk. Don't even bother trying to use a Citi card as they almost always code as a cash advance.
  • You're better off focusing on the bank bonus, rather than the credit card funding aspect. Bank bonuses can be extremely lucrative and earn you an easy $200 per bonus, if you were using a 2% cash back card you'd need to find one that allows $10,000 in credit card funding to get $200 in cash back.

Last time I posted this I was criticized, but if you look back you'll see that almost none of these banks have changed how much can be funded with a credit card. This is because this is a relatively cheap way of acquiring customers for a bank and it's a cost they are well aware of and willing to pay for. Assuming a bank pays 3% in credit card processing fees (which is extremely high) allowing funding of $2,000 would only cost them $60 which is significantly lower than bank bonuses that they offer consumers on a regular basis. We've purposefully left out banks that allow funding for a large amount, as in the past this had lead to abuse.

Understanding the list

Use the following key to understand each bank's entry:

  • ^ next to the bank's name indicates this bank is currently offering a bonus for opening an account
  • * next to the bank's name indicates this bank does a hard credit pull to open an account

You can click the links to be taken directly to the page specifying the bonus that bank is offering, for banks not offering a bonus it'll take you to the home page.

Nationwide Banks

State Specific Banks

  • America's Credit Union^ up to $10,000 (not actually state specific, but extremely limited membership)
  • Arizona State Credit Union [AZ only]
  • BB&T [AL, DC, FL, GA, IN, KY, MD, NC, SC, TN, TX, VA, WV Only]
  • BBVA Compass up to $300 [AL, AZ, CA, CO, FL, NM & TX]
  • Bank of Maine^ [ME, MA & NH] up to $500
  • Citizens Bank [Enter zip to find out] up to $1,000
  • First Citizens* [AZ, CA, CO, DC, FL, GA, KS, MD, MS, NM, NC, OK, OR, SC, TN, TX, VA, VA, WA, WV] bank up to $1,000
  • First Mark^ [TX only], possibly up to $10,000 and place two week hold on transactions above $100. Only accept Visa & Mastercard
  • GTE Federal* [FL only] up to $5,000 per account. Also possible to open six month CDs
  • KeyBank^ [AK, CO, ID, IN, ME, MI, NY, OH, OR, UT, VT, or WA] up to $100
  • NorthWest Savings Bank^  [PA, NY, MD, OH] up to $100
  • Regions Bank [AL, AR, FL, GA, IL, IN, IA, KY, LA, MS, NC, SC, TN, & TX] only up to $1,000 for both the checking and savings account

Conclusion

For more like this, don't forget to visit Will at Doctor of Credit and follow him on Twitter.