The programs are part of various plastic Rewards programs. The Bank of America program allows you to round up your small debit card purchases to the nearest dollar -- with the small change going to savings and a modest bank match provided. The American Express credit card apparently gives 1% cash back. What's the deal? With BofA, the enticement is based on increasing the use of debit cards instead of cash. Banks make billions in merchant interchange fees when we use plastic-- the merchants compensate by raising the prices we all pay, whether we pay with a buck or a card. Previous blog has details.

So increasing demand for plastic increases middleman bank profits while the cost of the goods and services we all buy goes up. The merchant pays a 1-2% fee on the non-PIN debit purchases (slightly less for PIN purchases). BofA hasn't yet explained whether the "small change" is subject to an interchange fee -- it may not be. But by increasing demand for plastic, they're making more than enough in increased interchange on the increased volume of plastic over cash to compensate for the savings program's nominal costs.

As for the AmEx card, it's been explained to me as a $35/year credit card with a 1% cashback feature. So, first, you need to spend $3500/year just to cover the cost of the card. That works out to about $300/month. After that, you start netting at 1%. But what if you don't pay the balance off each month? 12-24% APR interest -- whatever the rate on this card, clearly absorbs any 1% cashback and leaves you owing, not saving.

So, should a smart, rational consumer do either of these anyway to maximize his or her own gain at the expense of the rest of us? Well, as for the debit card plan, it's kind of a savings plan lite, and it does have (hard to measure) costs shared by everyone (including you because you're raising your own prices also). As for the credit card rewards-- if you are a convenience user, go for rewards, but calculate the full cost of the card, too (many rewards cards, like this one, have an annual fee even with no interest charges). If you carry over balances and pay interest, here is a simple fact: no rewards card compensates for 12-25% APR interest.

In any case, I hope people use the publicity we've maybe played a small role in generating to think about real savings plans. That's because Americans do have a serious savings problem. The Consumer Federation of America has some excellent materials and consumer tips at its site Americasaves.org.