As featured in The Wall Street Journal, Money Magazine, and more!

avatar You are viewing an archive of articles by Michael Pruser.

Michael Pruser

Aspiration Summit checking account offers a unique blend of features. From an excellent interest rate to virtually no fees, Aspiration is ideal for consumers looking to be treated fairly by a bank. Read our Aspiration Summit checking account review for all the details.

In the world of cash back and interest rates, I try to make as many purchases as I can with a good cash back credit card. Utilities, groceries, clothing, merchandise . . . the list of what I use my credit card for is endless.

And yet, as much as I try, I still end up spending more using my checking account and debit card than I do with my credit card. This means I’m missing out on cash back opportunities.

Yes, a good checking account is vitally important to a healthy financial lifestyle. But paying unnecessary fees is the easiest way to drain your checking account, especially without the benefit of a great interest rate. Plus, there are way too many banks out there willing to provide such a disservice to you and your account.

Well, the Aspiration Summit Checking Account is the antithesis of those high fee accounts. It offers its customers a fantastic interest rate without the detraction of a single fee.

Here’s how it works.

Aspiration Summit Checking Account

Aspiration Summit Checking Account review

The Aspiration Summit Checking Account is backed by Radius Bank and is FDIC-insured.

After being approved, you’ll receive a Radius Bank debit card. You can use the card just about anywhere. Unlike other checking accounts, it requires no minimum amount of debit transactions in order to receive the fee-free account. There is also no minimum balance requirement.

Even more intriguing, 10% of all revenue that Aspiration generates goes to charity. So, how can they offer all of this?

Well, oddly enough, it’s not available to everyone. In order to become an Aspiration Summit Checking Account holder, you must receive an invitation.

While that may sound daunting, all it takes is a short form with personal information. Soon after, you’ll receive an invitation asking you to join (I received my invitation 4 days after requesting an invite). Any U.S. citizen or permanent resident over the age of 18 with a Social Security Number and a checking or savings account can request an invitation.

There are three primary benefits to owning this checking account. They are:

  1. The current interest rate for accounts with more than $2,500 is 1.00 APY. (It’s 0.25% APY for less than $2,500.)
  2. There are no fees and no minimum balance requirements to maintain. The minimum starting balance to open an account is $10.
  3. Aspiration will never charge you a fee to use an ATM.  Not in the United States or around the globe. Not ever. (The ATM operator may charge you their own fee, though, so be aware.)

To my knowledge, no other account in the country offers all three benefits above. It’s rare enough to find a checking account that offers a high interest rate. When combined with absolutely no fees or ATM fees worldwide, I had no choice but to sign up for an account for myself.

Now my mortgage, electric bill, and every other non-credit card purchase flow through my Aspiration Summit Checking Account.

Aspiration Summit Checking Mobile App

For mobile users, there’s an available free app in the iTunes store. The app allows you to manage your Aspiration Summit Checking Account. Aspiration does a good job of keeping the app updated, too. In fact, the new 1.4.5 version was just updated June 23rd, 2017.

Current features of the mobile app include:

  • Deposit a check with your phone’s camera. No more searching for your bank or an ATM!
  • The only money Aspiration makes are the “tips” you choose to pay them — and you’re free to choose zero
  • Easy transfers between Aspiration and your other accounts
  • Pay your bills, or send a check to a friend
  • To-the-minute balance & transaction tracking
  • Touch ID lets you sign in with your fingerprint (on supported devices)
  • 3D Touch QuickActions (on supported devices)
  • Aspiration works with Apple Pay, Mint, Venmo, & Paypal
  • Two-factor authentication for stronger security

The only time your checking account has the potential to lose money to fees is when it is overdrafted. The bank charges $25 overdraft fee anytime it attempts to draw funds from your account and you do not have them.

Related: 5 Most Annoying Banking Fees

If your account remains negative for five consecutive days, a $5 daily overdraft fee charge kicks in. This will be charged until the account balance is brought back up to the black. Because you cannot also own a savings account, there is no overdraft transfer protection service. So, please do whatever is necessary to keep proper track of your debits.

Rarely do I come across a financial product that I have a hard time finding fault with. Whether a high annual fee, a limited set of circumstances, or some other catch, financial companies that want you as a customer do so to make money. However, the Aspiration Summit Checking Account holds none of these negatives.

For anyone in need of a checking account or looking to upgrade their current checking account, start here:

{ 0 comments }

I created my small business in 2010. One of the very first things I did was sign up for a business checking account.

Living in Miami at the time, there was a brick-and-mortar Citi location just a half block away. So, that is the bank I signed on with.

The “green” business checking account was their basic package. It offered no interest rate but free service. Correction: the account was free as long as I kept a $5,000 average daily balance.

Compare that account to the Capital One Spark Business Checking Account now available to consumers? Well, the differences between a good business checking account and a bad one are obvious.

Capital One Spark Business Checking Interest Rate

One of the immediate attractions to the Spark Business Checking Account is that it pays an interest rate.  For the first year, all new account holders will receive an APY of 1.00%. After the first year is up, the ongoing APY will change to 0.40%.

On the surface, the APY compared to high yield savings account stinks.  The fed is slowly and steadily raising interest rates, though, and now banks are following, finally offering account holders interest rates above 1%.

However, for checking accounts, you’ll find there are very few that offer an interest rate… let alone one that can compete with a savings account for the first year. And for those that still think the interest rate isn’t very good, consider that there are better places to hold your business funds than in an online checking account.

There is no minimum balance requirement to earn the APYs listed above, and there are no restrictions or caveats.

Spark Business Additional Features

In addition to a very competitive interest rate, the Capital One Spark Business Checking account will offer the following perks:

  • No monthly account maintenance or service fees
  • Free online bill pay and online invoicing
  • Access to the Spark Mobile Checking App
  • 40,000 fee-free ATMs nationwide

No monthly account maintenance fees. Monthly maintenance fees are the fastest way to hate your checking account. This is especially true for small businesses, when you review your statement each month to find a charge you did not expect, because of a rule you did not remember. Oh, the RAGE.

Well, Capital One is offering this business account with no fees and no strings attached. The only fee you’re going to receive is a non-sufficient funds fee if you attempt to overdraw your account or write a check that your bottom can’t cash.

One of the annoying parts of my initial Citi Business checking account was that I had to make at least 12 debits each month, otherwise I would be charged a $9.99 monthly maintenance fee. That’s not the case here.

Free online bill pay and invoicing. Everybody offers free online bill pay, so no big deal. But online invoicing? Now, that can be expensive.

A lot of companies I’ve worked with and/or requested work from use things like Freshbooks or Quicken to invoice. Those services are not free. And they add up. Opening a Capital One Spark Business Checking Account and using the invoicing feature can save you the $20+ a month from outside invoicing services.

Spark Mobile Checking App. For the technologically-advanced (AKA not my parents), Capital One offers a great app for download. It assists in tracking your balance, making deposits, setting up bill pay, and scheduling other payments.

Currently available in the Google Play shot, it has a very good rating of 4.5 stars. Looking through some of the most recent one star reviews, the common theme is that the app can kick you out while taking a picture of your check to deposit.

40,000 Free ATMs. Capital One runs on the Allpoint network, so any ATM transaction from one of these ATMs is fee-free. If, however, you decide to withdraw money from your account on an ATM not in the network (think Casinos, for example), then the ATM you use will charge a fee and Capital One will charge a fee.

In the United States, there are just over 38,000 ATMs on the Allpoint network and another 2,000 Capital One-specific ATMs. So, a quick online search is likely to point to an ATM nearby.

Spark Business Checking Snapshot

Capital One has created a very strong offering here, promising not to draw on the account of its customers for everyday transactions.

Compared to other online checking accounts, that’s already a win. When you add the quality interest rate and additional features, though, any business would likely benefit from keeping their checking account with Capital One.

{ 0 comments }

If you’ve been paying attention to high yield savings rates over the past few months, you may have noticed they’re on their way up. No, not to the 4% – 5% levels we saw about a decade ago. But, slowly, interest rates are creeping in a positive direction.

SmartyPig is one of the high yield savings accounts that has always led the way with top interest rates. Keeping with that trend, they currently offer a great interest rate, making it worth considering for your new savings account.

SmartyPig High Yield Interest Rates

SmartyPig currently offers four tiers when calculating interest for its consumers, based on the average daily balance on the account. So, for example, if today you had $3,000 in your SmartyPig savings account, you would earn 0.90% APY for that day. If tomorrow, you deposited another $8,000, that day would earn 0.95% APY on the $11,000 total in the account. These tier levels are not like tax tables, either… the full balance of your account will earn the APY in the active tier.

  1. $0.01 – $2,500 — 0.85% APY
  2. $2,500.01 – $10,000 — 0.90% APY
  3. $10,000.01 – $50,000 — 0.95% APY
  4. $50,000.01+ — 1.12% APY

In today’s online savings account market, earning 0.85% – 0.95% is still good. However, some competitors can do better. For example, Ally Bank currently offers 1.15% APY on all accounts, regardless of amount deposited. For this reason, SmartyPig is geared toward savers who can keep over $50,000 in their account at all times.

SmartyPig Savings Goals

One of the features that SmartyPig has employed since the very first day it became an online bank was to allow users to create internal savings goals.

For example, if I wanted to create a $5,000 savings goal for a family vacation, I could set up recurring transfers from an external account into my SmartyPig account to track my savings progress. Or, I simply draw from my primary SmartyPig savings account into my goal account. During the saving process, I can track my progress toward my goal. Once I reach the goal, SmartyPig releases funds back into my primary savings account.

The SmartyPig Savings Goals section is largely symbolic. There are no interest rate benefits or negatives to creating goals. If you decide to scrap a goal early, SmartyPig places them back into your main account with all interest earned. The idea here is that visualizing the goal and keeping track of the amount you’ve saved goes a long way towards completing your task.

Resource: Setting Goals You’ll Actually Achieve

Opening Up a SmartyPig Account

The process to open up a SmartyPig account takes all of five minutes. You’ll need your personal information, including social security number and a cell phone, plus a few moments to complete a three-step online application.

  1. Create your login details and enter your cell phone number.
  2. Verify your cell phone number by using the 4 digit code SmartyPig will send you (the stated timeline to complete this step is 14 days before your account will be closed).
  3. Verify your identity by entering your personal information and answering four security questions.

After these steps have been completed, you’ll have your very own SmartyPig high yield savings account. The last thing to do is verify your email address, which is required after your account is active, but before you can set up any external funding source. The login dashboard for SmartyPig looks like this:

Setting Up External Transfer Accounts

In order to fund your SmartyPig account, you must set up an external funding source. SmartyPig is not a bank in and of itself. It’s simply a “product of sorts” that Sallie Mae offers. So, the only way to get money into the account is by transferring it from another account. SmartyPig and Sallie Mae are FDIC-insured for the full $250,000 per depositor. But there are currently no physical locations where you can deposit funds. Therefore, direct deposit and external transfer are your options.

After creating an account and setting up a savings goal (optional), I entered my first external funding source. After this, I went through the standard verification process where SmartyPig made two small deposits to my funding account. This process can take a few days depending on the bank you use. Once the small deposits are verified, you can deposit directly into your SmartyPig primary or goal account.

Related: How Automating Your Finances Can Save You Time and Money

How Much Can SmartyPig Earn You?

Why use SmartyPig? Well, compared to other popular high yield savings accounts, SmartyPig carries one of the best interest rates for high-balance accounts. Popular banks like Discover, American Express, Ally, Capital One, and Goldman Sachs Bank USA offer interest rates above 1% APY but below the 1.12% APY that SmartyPig offers.

Let’s run a small example of how much money a SmartyPig account can earn you on top of the others:

  • As of 5.24.2017, the interest rate at Ally Bank is 1.05%. If you were to deposit $100,000 into your Ally account today and let it accrue interest (compounded daily) at the current rate, you would have $105,393 after five years.
  • If you did the same with your SmartyPig account and it’s 1.12% interest rate, the ending balance after five years would be $105,762. This means SmartyPig will earn you an additional $369.

Admittedly, $369 spread across five years ($74 per year) is not a large amount of money when considering the initial deposit is $100,000. However, we’re all here to save money. If it’s no skin off your hide to spend fifteen minutes setting up and funding your SmartyPig account, why wouldn’t you? After all, $369 for 15 minutes’ worth of work ain’t bad!

Additional SmartyPig Benefits

When SmartyPig was initially launched around a decade ago, it focused more on spending than saving. Backed at the time by BBVA Compass, the bank offered gift cards instead of actual cash when cashing out a goal and earning interest. The benefit then was that specific cards and stores would offer a premium on their gift cards, so an account holder could earn much more than the current interest rate offered. When Sallie Mae took control of the bank last year, the account structure shifted to a more strict savings approach.

However, there is still one feature of the old bank present in SmartyPig. Every account holder has the ability to buy Amazon gift cards within their account. There is no added bonus to do so, though, and your account must be opened for 60 days before being able to purchase an Amazon gift card. So, in terms of how this plays into the SmartyPig platform, it doesn’t.  The best I can do is describe it as an oddity that I suspect will change in the near future.

Other benefits of owning a SmartyPig account are as follows:

  • Refer a Friend Bonus – Every friend you refer to SmartyPig will earn you $10 after they’ve opened an account and deposited $25 within the first 30 days. The bonus is deposited directly into your account! SmartyPig caps the number of new account referrals at 100, so you can earn up to $1,000 extra.
  • Joint or Limited Access to Goals – One of the cool things about your SmartyPig interface is that with each goal you set up, you have the ability to share that goal with family and friends. You can choose to allow them to simply view and keep track of the goal, or to have account access to the goal, where they can deposit funds via their own external funding source.

SmartyPig is a great place to park your savings if you have over $50,000 to do so. Its interface is clean. Getting set up is easy, and tracking your progress is a neat way to stay on top of your savings. If you currently have your money parked in a different online savings account and would benefit from the higher interest rate SmartyPig provides on big balances, consider making the switch.

{ 0 comments }

Yesterday, the U.S. House of Representatives narrowly passed the American Health Care Act (or as many are calling it, “Trumpcare”) by a vote of 217 to 213. Initially, it was determined by Republican House leadership that the bill was not strong enough to pass a vote. The discussion appeared to be tabled indefinitely. However, after a few amendments to the bill over the course of the last month, there was enough to satisfy the Republican members of the House to ensure a vote would carry with it a passed bill.

I’m going to try my best to discern fact from fiction, remove the propaganda from both Democrats and Republicans, and tell you exactly what this bill means for your healthcare. Depending on who you talk to, you may be hearing things like “tens of millions of people with pre-existing conditions will lose their healthcare,” or “Obamacare is dead, long live Trumpcare.” If you’re on the outside and haven’t actually read the bill, it’s not easy to figure out who is telling the truth and who is lying (SPOILER: in politics, everyone lies).

So, let’s dive right into what this bill does and doesn’t do, and how it could affect your future healthcare.

Pre-Existing Conditions

This single topic is the one that divides the Republican party more than any other. Under Obamacare, anyone that was sick could purchase health insurance through the federal or state exchange. They could even do so at the same price as a someone who had no pre-existing condition.

The idea behind the increased coverage was that by forcing a mandate, more healthy people would pay for health insurance. Their premiums would cover the cost incurred by insurance companies to cover those that were sick, balancing the scales a bit. This meant that millions of Americans, who previously could not get health insurance at an affordable cost, now could under Obamacare. What happens to these individuals if Trumpcare is signed into law, though?

The answer is: absolutely nothing. Any person currently covered under Obamacare who maintains continuous healthcare coverage (which is defined in this bill has not having lapsed for longer than 63 days) cannot be charged a higher premium because of a pre-existing condition. It doesn’t matter what state you live in, and it doesn’t matter what condition or how many conditions you have. Your insurance will be the same as those that have no pre-existing condition.

Examples of pre-existing conditions under Trumpcare:

  • Parkinson’s disease
  • Epilepsy
  • Alzheimers or dementia
  • Kidney disease
  • Sleep apnea
  • Multiple Sclerosis
  • Cerebral palsy

So, what is changing about pre-existing conditions? The primary change is for those that do NOT have health insurance–or whose coverage lapses for longer than the 63 day threshold. If these people then do get sick and look to purchase health insurance, it’s going to be expensive.

Federal law will allow for a specific premium increase (right now, 30%) to be charged for each pre-existing condition. Then on top of that, individual states can request a waiver to increase costs for new premiums even further. States must prove that they are requesting a waiver so that they can either lower premiums for everyone OR cover more people as a result of the waiver. In this way, people who choose not to have health insurance and then get sick will no longer be able to buy healthcare at, what I can only define as, an affordable rate.

Income-Based Subsidies Disappear

Under Obamacare, those looking for health insurance could receive government subsidies based on their income. The smaller the amount of income, the more in subsidies.  This allowed the poor to be able to afford healthcare (in some cases, making it free) and ensuring that the rich were not getting benefits from the system. With Trumpcare, however, the subsidies are based on age rather than income level.

Here is a breakdown of the annual tax credits received from Trumpcare:

  • Someone that won’t turn 30 in the calendar year – $2,000
  • Someone that won’t turn 40 in the calendar year – $2,500
  • Someone that won’t turn 50 in the calendar year – $3,000
  • Someone that won’t turn 60 in the calendar year – $3,500
  • Someone over 60 years of age – $4,000

The amount you see above begins to phase out for those that earn more than $75,000 (or couples that earn $150,000), starting with 10% and going down from there. So, the very wealthy will not receive any government subsidy. However, for example, my family of four (me, my wife, and two children under the age of 4) would receive a total subsidy of $9,000 to pay for health insurance. My current income level means it would not phase out, and as our current health care premiums are $800 a month, the subsidy would be welcomed by my family (and our budget).

Related: How to Save Money on Healthcare Costs

This change in policy would affect the lower class more than anyone else in terms of a negative impact. For some families that are completely covered by Obamcare, they would now owe a portion of their monthly premiums. As a result, the fear from many is that they will no longer be able to make their payments, thus fall into the lapse period and then not have the ability to purchase coverage should they get sick.

All of this said, the change in subsidies from income based to age-based would take effect on January 1st, 2020. It wouldn’t be an immediate impact and would allow families to plan for the changes.

Higher Costs for the Elderly

Under Obamacare, the elderly (ages 55 and above) can currently be charged up to 3x the cost of their premium compared to that of a younger person (under 30). That’s not to say that every plan features this kind of charge, however the option is available to insurers. Under Trumpcare, that charge increases to 5x. Because of the ability for individual states to apply for waivers, there is the potential for them to increase that cost even higher.

Read More: How to Afford Healthcare In Retirement

For this very reason, groups like the AARP have voiced their opposition to this bill, as many seniors would see risings costs as a result. When the first version of this bill (that was not voted on) was scored by the Congressional Budget Office (CBO), the average estimated increase in cost to annual premiums for the elderly was ~$3,200. That amount could be off-set by some of the changes being made to the Medicare portion of healthcare; however, it is expected that most elderly Americans will see a rise in their healthcare costs.

High Risk Pools May Fill Too Quickly

One of the reasons this bill has taken so long to pass the House is that some Republican lawmakers were concerned about high risk pools running out of money. These are the pools that will take care of people with pre-existing conditions, who have a lapse in coverage, and who will require the most funding for their healthcare costs. The current law has included $138 billion in funding for these pools over the course of 10 years to help insurance providers subsidize some of the claims made.

However, while $138 billion sounds like a lot of money, some estimate that the actual amount needed to cover high risk pools is in excess of $300 billion. The Upton Amendment, named after Congressman Fred Upton (R-MI), added an extra $8 billion to this pool, which was enough to get a few additional (and much-needed) votes.

But even though $8 billion sounds like a ton of money, it covers less than you’d think. When getting into the weeds of healthcare for high risk individuals, that money is likely only to cover an additional ~100,000 people.

Healthcare Mandate Disappears

Under Obamacare in the 2016 tax year, if you decided not to buy healthcare, you would be charged a penalty based on the income you earned. For example, my mother (who refuses to listen to my advice) was charged a $2,300 penalty for not having health insurance. Under Trumpcare, the mandate disappears, and no penalty is charged.

The upside for the young and healthy is that if they choose not to carry insurance, they will no longer have to pay out of pocket for that choice. The downside is that if those same healthy people all of a sudden get sick, their premiums will be much higher should they decide to then buy health insurance. However, even that is not much of a downside because the money saved over the years of not paying for health insurance may still be greater than the amount they need to pay on top of their new health care premiums. So, in the end, they’ll have likely saved more money.

The Obamacare mandate never seemed to provide a great enough incentive to get healthy young people signed up for health insurance. This caused health insurance companies to take in too little revenue while paying too much in health care costs. The result is what you see now. Every day, it seems as if insurers are pulling out of different state markets, reducing the plans available to residents.

But That’s Not All… Another Insurance Giant Pulls Out of Obamacare

The Final Word on Trumpcare Part One

Depending on whether or not you’re a fan of the above changes, I have good or bad news for you. These details discussed are not yet law, and there could be (and likely, will be) significant changes. The bill that passed the House of Representatives probably will not be voted on by the Senate; instead, the Senate will write their own healthcare bill and vote on that (when Republicans feel they have the 51 votes needed to pass).

This doesn’t mean everything you’ve read above won’t happen, but it does mean that the finished Trumpcare product could look substantially different than the one that was just voted on. If the Senate passes a bill significantly different than the one the House just passed, then both houses of Congress will have to get together and compromise on a bill that they both endorse. At that point, the bill hits President Trump’s desk, and I believe the odds are somewhere in the 100% range that it will be signed into law.

There is another possibility, however: the Senate may not be able to create a law that can pass, and when they vote on the House version, it could be struck down.

There are no guarantees as to how or when the finished version of Trumpcare will take effect, but many expect something to be completed before the end of August. If that’s the case, millions of Americans will soon be shopping for new healthcare plans. When that happens, we’ll do our best to keep you apprised of the different policy options.

{ 3 comments }

Everything You Need to Know About Donald Trump’s Proposed Tax Plan

by Michael Pruser

I’ve been fortunate enough to live on this wonderful earth for 32+ years. During that time, I’ve come to realize two things as certainties.  First, the New York Jets are never going to win a Superbowl in my lifetime and second, taxes are unbearably complicated. One day, I hope to vote for a President who […]

5 comments Read the full article →

Overbooking Flights is Good for the Consumer – Let Me Explain

by Michael Pruser

As the entire world has likely seen by now, United Airlines removed Dr. David Dao from his Sunday evening flight, by selecting him at random and then dragging him off the airline. While the United apology tour took a good 48 hours to get started, they finally came around and said they were very sorry […]

2 comments Read the full article →

The Impact of the Philadelphia Soda Tax

by Michael Pruser

Earlier this year, I wrote an article discussing the new Philadelphia Soda Tax that had just been put into effect. At the time, the discussion focused on the possibilities the law would present: from having more people drink water and getting more funding for the school system, to Americans losing money to the tax and companies […]

0 comments Read the full article →

Blue Cash Preferred Card® from American Express Review – 6% Cash Back on Groceries

by Michael Pruser

When the Credit Card Act was passed years ago, many thought it would be the end of credit card rewards programs. Despite increased costs of operations, credit card issuers continue to beef up their attempts to attract new customers, with bonuses for signing up and growing perks. The best cards you’ll find today seem to […]

11 comments Read the full article →

What is Apple Going to Do with All That Cash?

by Michael Pruser

In 1977, Steve Jobs and Steve Wozniak incorporated a little start-up company called Apple Computer. For the first 25 years of Apple’s existence, they were simply a personal computer company, one which plugged in millions of Americans across the country. For the last 15 years, however, Apple has been everything else. They’ve been music players, […]

1 comment Read the full article →

The Obamacare Mandate is Dead — Will There Be a Trumpcare Mandate?

by Michael Pruser

Former President Barack Obama signed an order into law back in March 2010, which later became known as Obamacare. He did so with the hope that it would revolutionize the way Americans handled their healthcare.  However, if Obamacare was to ever survive, it required a large number of healthy individuals to sign-up for healthcare. To […]

1 comment Read the full article →
Page 1 of 212