Using cards as a way to save

Triangle residents are a little better at saving than the average American -- but that's not saying much.

As a nation, we spent about $44 billion more than we earned in February, according to the Department of Commerce. We've been running similar deficits for months.

Some companies are looking to capitalize on our spendthrift habits by offering credit and debit cards touted as ways to help us save. Two of the newest are American Express' One Card and Bank of America's Keep the Change savings program for debit cards.

You've probably seen the ads. Both programs make saving automatic by depositing a small amount into a savings account each time you use them.

With Keep the Change, Bank of America rounds up to the nearest dollar with each purchase and deposits that amount into a savings account. For instance, for a $4.03 charge, the bank would deduct $5 from your checking account and deposit 97 cents in a savings account.

For the One Card, American Express deposits an amount equal to 1 percent of the money you spend into a high-yield savings account.

While American Express won't release its enrollment numbers, a spokeswoman said the company has had a great response to the One Card.

In addition to the automatic savings, both programs offer financial perks.

While Keep the Change basically is moving around your own money, it does match your savings 100 percent for the first three months and thereafter provides a 5 percent match, up to a total of $250 per year.

American Express helps you start your savings account with a one-time $25 deposit when you make your first purchase. Plus, the 1 percent rebate is cash on top of what was already in your bank account.

There are also drawbacks.

Keep the Change's rounding feature makes it easier to overdraw if you don't keep careful records. "There are a lot of people who run on fumes all the time," said Liz Weston, author of "Deal with Your Debt" and a personal finance columnist."If they did a lot of transactions, they could overdraw."

Meanwhile, the One Card has a $35 annual fee, which it waives for the first year. For each subsequent year, you have to spend $3,500 before you can start realizing a benefit from the savings.

While anything that can help Americans save money is probably a good thing, these programs aren't necessarily the best options, consumer advocates said.

"You've got to bear in mind that they're not the only game in town," said Curtis Arnold, founder of CardRatings.com, a Web site that helps consumers compare credit card offers.

Other possibilities range from credit cards that help you pay back your mortgage to those that help you save for college tuition or retirement.

One of Arnold's favorites is the Fidelity Investment Rewards card, which deposits a 1.5 percent rebate in a Fidelity IRA. "At that point, you're getting more bang for your buck because you're not only getting a rebate, but you're getting a tax advantage," he said. "If you're looking for a strictly savings-related credit card, that's hard to beat."

Many credit cards also offer cash-back levels higher than 1 percent, with no annual fee. If you're disciplined enough to save that money instead of spending it, that's a better choice, Weston said.

Either way, cash-back cards aren't the way to amass a fortune. To squirrel away more substantial savings, consider setting up regular deductions from your paycheck or checking account, she said.

"There will always be something else you want to do with that money," she said. "You don't want to have to think about it. The more of those automatic things you can set up, the better."