Earn Points by Funding Bank Accounts with Your Credit Card

Easily Earn Points for Free Travel, Earn More Credit Card Points with Manufactured Spending

Many banks allow you to initially fund your bank account using a credit card. If you do this carefully, you can earn extra reward points by simply moving some of your money into (and eventually out of) a new bank account. At the same, you can usually qualify for an account opening bonus—giving you a cash payout alongside your generated spend.

Jump to

Finding a bank that works
Avoiding “Cash Advance” transactions
Earning a bank account bonus as part of the transaction
Other advice
Getting started

Probably the best source of this information is Doctor of Credit’s Bank Accounts That Can be Funded With a Credit Card page. For each bank, it provides information on whether new accounts can be funded by credit card, the maximum amount that can be funded, and which credit cards have been successfully used without counting as a cash advance. Another good source is Hustler Money Blog’s Funding Bank Account with a Credit Card page. If you are interested in using a bank or credit union that isn’t listed, just call the bank and ask.

Avoiding “Cash Advance” transactions

Funding bank accounts has a higher-than-normal chance of being considered a cash advance. If so, you'll need to pay additional fees and interest, which will outweigh the benefits you'll receive.

And because the transaction amounts can be high, the potential costs can be especially high as well. In addition, you don’t usually have the option of “trying” it out with a small transaction, as credit cards can usually only be used for the initial deposit. Once a test transaction goes through, you can’t follow-up with a more significant deposit later.

Even if online resources say it shouldn’t trigger a cash advance, we would strongly recommend avoiding this technique, unless you’ve already lowered your card's cash advance limit to effectively block the transaction if it codes as a cash advance.

Earning a bank account bonus as part of the transaction

Most banks offer signup bonus for new accounts, typically around $50 to $400. If you are playing this game, you’ll want to kill two birds with one stone, and earn the bank's signup bonus alongside whatever points you earn from using your credit card to fund the account.

Doctor of Credit is your best source for finding up-to-date information about what bank account bonuses are available. You can look through its lists for banks with attractive signup bonuses that also allow for credit card funding. You might decide that you’re interested in earning some of the better bank account bonuses, even when there is no opportunity to collect credit card points at the same time.
Most bank account bonuses require you to make a “direct deposit”, and not just open an account. Sometimes the direct deposit doesn’t have to be particularly large. Sometimes, it must be more substantial. It can be annoying, or even impossible, for you to change the handling of your paycheck to meet this requirement. Fortunately, in many cases, any electronic deposit (ACH) will wind up being counted as a direct deposit, even if it is not really supposed to. Once again, Doctor of Credit is the best source of information with crowd-sourced information about what will show up as a direct deposit with any given bank.
You need to factor in the cost of having the account open. There are two costs involved.

The first is the cost of having your money sitting in a low or non-interest-bearing account, when it could be earning money elsewhere. Perhaps you could expect to earn 3-5% by investing the money instead. For example, if you have $1,000 sitting in an account for six months, at a 5% opportunity cost, you are “losing” $25 in potential gains.
The second is any monthly fees charged by the bank. You might be able to get these fees waived by keeping the balance above a certain amount. However, while this will reduce or eliminate the fees, it will increase the money you are losing by having funds tied up with the account.

Typically, the lowest overall cost is incurred by keeping the minimum amount of money in the account that avoids any monthly fees. But sometimes, you are better off keeping a much lower balance, and paying the fees instead. Occasionally the fees are waived for the first month or two, somewhat changing the analysis of how to minimize your costs.

To get a bonus you may need to deposit additional funds, beyond what you can do with your credit card. In many cases, the minimum requirement for the bonus, or the sensible amount to avoid fees, is larger than the maximum amount you can fund with your card. You’ll need to move over some additional money when you open the account.
Make sure to check that you received your signup bonus. Sometimes it doesn’t show up on its own.

Other advice

If you find a good bank account to fund, you can often open multiple different accounts at the same bank. For example, you might be able to open one in your name, one in your partner's name, and a joint account between you. Or you might be able to open separate savings and checking accounts. This allows you to put more charges on your credit cards, and to earn more money in bank account bonuses.
In most cases, you can only use a credit card to fund a newly opened account and not to add funds to an existing account.
Most banks have a limit to the amount you can deposit by credit card. This is typically in the $500-2,000 range, but can be higher or lower. So. the amount of spending that you can manufacture is capped—or at least needs to be spread among many different banks. Occasionally, it is possible to find some, typically smaller, banks that have much higher minimums.
If you cancel the account too quickly, you might be hit with early termination fees. Most banks will charge you a fee if you close an account right away. The minimum amount of time to avoid this fee depends on the bank, but it is typically around 3 months. You’ll usually see this information on the Doctor of Credit website. If not, you’ll want to search for the bank name plus the word “fees”, to see if you can find the information on the bank’s fee schedule. Furthermore, if you received a signup bonus, you’ll lose that if you close the account too quickly.
Sometimes, you’ll need to pay an “account closing” fee, no matter how long you wait to close the account. You’ll need to double-check the bank’s fee schedule and factor this into your decision.
In some cases, opening a new bank account will result in a “hard pull”, which has a slightly negative affect on your credit rating. In most cases, it will just require a “soft pull”, which won’t have any affect. Doctor Credit tends to provide this information on the detail page for each bank account bonus, but also has a listing of crowd-sourced information on its Is Opening a Bank Account a Soft Pull or a Hard Pull page.
If you open too many bank accounts per year, banks may start turning you down. Banks use a system called ChexSystems to share information about your banking activity. Opening too many accounts may start triggering flags with different banks. Doctor of Credit’s rule of thumb is to stick with ten or fewer accounts per year.
If you are risk-averse, this is more dangerous when used for signup bonuses than for just earning additional points. If the credit card company looks at your account, they may decide to claw-back any rewards you earned. If you lose the regular reward points, it is no big deal. If they take back your signup bonus, it will be too late to qualify in some other way. That said, it is very unlikely that this will happen.

Getting started

Our advice is to go to Doctor of Credit’s Bank Account Bonus page and try to find a bank account that:

Has at least a $200 signup bonus.
Doesn’t require a hard pull (uses a soft pull instead).
Can be funded with a credit card.
Allows any ACH to count as a direct deposit (or doesn't require a direct deposit).
And doesn’t have a burdensome cost in terms of monthly fees, closing fees, and the amount you need to keep in the account.

Fund the account as much as you can with the credit card, then add additional funds (if necessary) to meet any bonus requirements. Adjust the amount of funds to hit the right balance of fees and lost interest.

Set an appointment on your calendar for when it is time to close the account. After you've made sure you’ve received your bonus and met the minimum time period, transfer out your cash and close down the account.