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Earlier this week, we reviewed the SmartyPig Cash Rewards Card. I was intrigued by the service and wanted to take a closer look at the SmartyPig online savings account. Does it really work to help you earn cash back without needing a rewards credit card? Does it really make savings fun?
The Idea Behind SmartyPig
Before you reach for your credit card to finance your next big purchase, why not save up for it instead? It is very rarely worth it to finance something with a credit card – simply because the interest you end up paying will cancel out any rewards you earn.
This is what makes SmartyPig interesting. Using an online savings account that also offers rewards is a great way to break the habit of financing with credit, and help you develop a better habit: saving money.
The idea behind Smarty Pig was to make saving fun by creating your own short-term or long-term goals to help you bypass those high credit card interest charges.
What is Smarty Pig?
Smarty Pig is an FDIC-insured savings account that lets you set up socially-oriented goals to save for the things you want to buy.
There are no fees to save your money, no fees to join and you can withdraw your money at any time at no cost.
Smarty Pig intends to replace the idea of buying what you want now and paying for it later by teaching you to save up for the things you want the old-fashioned way.
While you’re saving up, you’re also earning interest — currently 1.00% APY. Once you set up your goals, share them with friends and family on Facebook, Twitter and anywhere else you like so everyone can keep track of your progress and even kick in a few dollars if they like.
- Save up money for free. There are no fees to join, set up goals, add funds or withdraw your money.
- Get cash back with retailer gift cards. One of the biggest advantages of Smarty Pig is the ability to receive up to 11% cash back when you put your money into a retail gift card to make your purchase. If you’ve saved up $2,000 for new furniture, for example, you can put your money into an Overstock.com gift card and get an extra $140. Not bad!
- Create goals for anything you want. You can set up as many goals as you like to help you set aside money for a new computer, a vacation or new furniture — all without going into debt. Goals can be linked to a funding source with automatic contributions.
- Earn interest! Save up for that new TV and earn 1.00% APY interest on your savings until you’re ready to buy. Why pay high interest rates to your credit card company when you can make your money work for you?
- FDIC-insured. Your money is safe and FDIC-insured up to the maximum amount under the law.
- Social savings. Share your savings goals with family and friends so they can track your progress and pitch in.
- Smarty Pig Cash Rewards Card. Sign up for the pre-paid Smarty Pig rewards card and earn 1% cash back on your purchases once you’ve saved up the money. The card is tied to your savings account and may be used anywhere Mastercard is accepted.
Is Smarty Pig Right for Me?
If you’re the type of person who finances purchases with a credit card and pays them off slowly over time, Smarty Pig may be just the thing to break you of this expensive habit.
Smarty Pig teaches you how to save up money for the things you want and even rewards you for it with a cash rewards card and cash back on retail gift cards.
This FDIC-insured savings account earns you interest and keeps your money safe while you’re working toward your goal.
I believe that for those who have trouble using a credit card responsibly, or are simply looking for an easy way to save some extra money, SmartyPig is a very viable option and one that is definitely worth a look.
The fees are low and SmartyPig also offers one of the only cash back debit cards still in existence, allowing you to access your money on the go and earn rewards at the same time.