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Accrue Savings Review: Save Now, Buy Later

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Updated: July 26, 2023

Accrue Savings review: save now, buy later

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By Kevin Mercadante

🗓️

Updated: July 26, 2023

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4.0

Fees5

Customer service4.5

Ease of use4.5

Features4.5

Accessibility3.5

Interest rates2.5

Accrue Savings goes old school with its free payment program: It allows users to save up for large purchases. Fancy that! It also throws in cash rewards, a chance to crowdfund your purchase and fun features. That means customers get what they want, and then some — but without the debt of putting it all on credit.

How does Accrue Savings work?

Accrue Savings will provide you with a savings account where you can accumulate the funds to make purchases. It also comes with a virtual Visa debit card that you can use to access the savings to make your purchases.

Accrue Savings provides a list of participating merchants on the website where the service can be used. But if a merchant is not on the list, you can contact Accrue Savings to see if they can be added to the list.

What is Accrue Savings?

Accrue Savings is a financial technology company that provides an FDIC insured bank account that can be used to make specific purchases. Despite the name, Accrue Savings is not a bank. Instead, banking services are provided by Blue Ridge Bank, N.A., which also provides a Visa debit card.

Because you’re essentially saving funds in the account prior to your purchase, you’ll be able to avoid credit card debt, plus any associated interest and possible late fees from that purchase.

This is the basic premise behind Accrue Savings. It attempts to counter the incentives offered by credit card companies to encourage spenders to make purchases on credit — which ultimately puts consumers in debt.

Accrue Savings also works with merchant partners who want to offer a payment option to their customers that doesn’t require use of debt. They’re working to replace – or at least to supplement – buy-now-pay-later (BNPL) with a save-now-buy-later option.

Pros and cons

Pros

Accrue Savings has been established to enable consumers to save money for upcoming purchases, to avoid using debt.
You can earn rewards upon reaching your savings goal, which can also be used for purchases.
Family and friends can make contributions to your Accrue Savings on your behalf.
Accrue Savings offers complete flexibility in funding your savings account. Not only can you set the timetable and amount saved, but you can also skip a payment or even pause the plan.

Cons

Purchases can be made only through participating merchant partners, which is currently very limited.
The balance in your Accrue Savings account does not earn interest.
If you withdraw funds from your Accrue Savings account – which you can do – you’ll forfeit any accrued rewards.
The company is new, having been launched only in the middle of 2021.

You’ll start by choosing a product you want to buy. You’ll then create an Accrue Savings account and fund it with automatic deposits. This will be done by choosing a savings schedule that’s a comfortable fit for your budget.

The website provides a savings progress bar so you can see exactly how much you’ve accumulated. You can also skip a payment, or even pause your savings plan, simply by going to the dashboard and editing the next payment date. But even if you pause payments, your account will still be eligible for contributions from family and friends.

Depending on how quickly you want to purchase an item, you can set up a plan to fund the account over a period of weeks, months, or even more than one year. The account will be funded by automatic deposits from your current bank account.

The plan can be set up using anywhere from five payments to as many as 15. You can contribute as little as $1 per week, to as much as $100 per day. The choice is yours, and depends on how quickly you want to make your purchase, as well as your financial ability to complete the payment plan.

When you reach your savings goal, you’ll also get cash rewards. These are paid immediately and can be used towards other purchase goals. You can also receive contributions from family and friends on specific items to help you accomplish your savings/purchase goal.

Excess contributions

If contributions to your account, including those of family and friends, exceed 100% of your purchase goal, any remaining funds in your account will be automatically returned to your linked bank account after the purchase. Alternatively, you can use the excess funds toward another purchase.

Shipping fees and taxes

Since these cannot be known at the time you set up your savings plan for a purchase, you can still complete the purchase once you reach 100% of your savings goal. Any additional funds required for shipping fees and/or taxes will be withdrawn from your linked bank account.

Features and benefits

Complete funding flexibility

You can choose the term of your savings plan, as well as the amount and frequency of the payments you will contribute to the plan.

Cash rewards

Instead of paying interest on your savings account, Accrue Savings pays cash rewards once you reach your savings goal. It’s a way of providing an incentive for consumers to save for purchases in advance. Cash rewards depend on the merchant and can range between $60 and $1,000.

Crowdfunding

To help you reach your savings plan goal faster, Accrue Savings allows you to invite family and friends to also make contributions to your account. They refer to this process as “crowdfunding”.

Participating merchants also sometimes offer promotions and discounts. If they do, you’ll pay the discounted price, and retain any unspent funds in your Accrue Savings account.

Visa debit card

When you open an account with Accrue Savings you’ll be provided with a Visa debit card, that can be used to make purchases anywhere Visa is accepted. The card also comes with all features and benefits available under the Visa label.

Return any purchase items for a full refund

If you do decide to return a product, just know that any accrued rewards will be forfeited. Also, any funds contributed to your account by family and friends may be subject to a fee.

What makes Accrue Savings different?

In many ways, Accrue Savings isn’t all that revolutionary. It’s effective because it encourages users to pay for big ticket items the old-fashioned way — simply by saving up slowly and steadily, as we often would before credit cards became staples of our wallets.

Other popular payment programs also rely on old-school purchase models, like layaway agreements (only it’s now called Buy Now Pay Later) and deferred interest plans.

Here’s how Accrue Savings stacks up to its competitors.

Buy now pay later (BNPL)

By now, many consumers have gotten comfortable with various types of buy now, pay later payment arrangements. They appear to be the perfect solution for a person with bad credit, no credit, or a desire to avoid incurring new credit.

But BNPL financing arrangements aren’t harmless because they contain a number of “gotcha” provisions:

Merchants love BNPL arrangements because consumers tend to buy more. Instead of making a one-time purchase of $100, the consumer may choose to spend $200 because the payments can be spread across several months.

Merchants commonly fail to check the consumer’s credit or verify their income for qualification. This can lead to missed payments and even defaults.
Missed payments and defaults can lead to the imposition of hidden fees, like late payment fees, reactivation fees, and rescheduling fees.
If a consumer defaults on their BNPL payment arrangement, the merchant/lender may report the incident to the credit bureaus. By contrast, the consumer’s good payment history isn’t reported.
Consumers are highly likely to engage in multiple BNPL arrangements, which increases the possibility of missed payments and defaults.
Returns and refund requests are particularly complicated with BNPLs. For that reason, they can often lead to defaults.
Merchants may charge higher purchase prices on items financed through BNPL arrangements.
Since BNPL are “gray zone” financing arrangements, they aren’t subject to federal or state consumer protection laws.

As it turns out, BNPLs – which seems so simple on the surface – are actually quite complicated. That’s why they often cost consumers more than other financing arrangements.

Deferred interest payment arrangements

Not only are these plans popular, but they’ve been around for decades. Deferred interest payment arrangements are not to be confused with 0% introductory offer credit cards. Instead, they’re loan arrangements that are often offered with specific, large purchases.

The merchant will offer a payment plan that includes 0% interest for something like 18 months. All payments made during the 0% grace period are applied to principal reduction.

Sounds like a good deal, right? But let’s take a closer look at the word deferred in deferred interest payment arrangements.

Deferred doesn’t mean forgiven. It means postponed. In reality, the merchant/merchant’s lender will calculate interest on the loan arrangement beginning on day one.
True, no interest will be due on the portion of the loan you repay within the 0% grace period. And if you pay off the balance completely by the end of the grace period, you’ll pay no interest at all.
But interest will be charged on any balance that remains on the loan at the end of the grace period – retroactively. For example, if you borrow $1,500 with a 0% deferred interest period of 18 months, and you still owe $1,000 at the end of the term, interest will be added to the unpaid balance going back to the first day the loan arrangement began.
If the interest rate on the loan – buried deep in the fine print – is 20%, a rate of 1.667% per month will be added to your loan balance. At the beginning of the 19th month, your balance will suddenly jump from $1,000 to more than $1,300. Interest will continue to be applied to the outstanding loan balance until it’s paid in full.

That’s not nearly as interest-free as merchant promotions claim.

Learn more: What is compound interest and how does it work?

The Accrue Savings solution to the rescue

The basic mission of Accrue Savings is to replace “buy now, pay later,” which relies on credit, with a “save now, buy later” option. It seems to accomplish that goal.

Accrue Savings is available to those with poor credit, no credit, or those who want to avoid credit altogether. These are the most common reasons why consumers choose BNPLs and similar financing arrangements.
Accrue Savings enables you to accumulate the funds to make a major purchase. That means no loan arrangement is involved at all. No loan arrangement means no monthly payments, and no possibility for late payments or defaults.
Accrue Savings charges no fees. There are no setup fees or monthly fees and no interest will apply to your arrangement with Accrue Savings.
There are no hidden terms or gotcha provisions. You won’t face a bunch of fees if you miss a payment or fail to complete the arrangement. It also means no deferred interest waiting in the wings, and no possibility of a negative entry on your credit report.

Accrue Savings fees and pricing

Accrue Savings does not charge fees for using the service.

Is Accrue Savings safe?

The service is designed to protect your personal information, banking information, and savings. Funds held in your savings account are fully insured by the FDIC for up to $250,000 per depositor.

To keep funds transfers safe, Accrue Savings uses Plaid to connect your checking or savings account with your savings account with Accrue. ACH transfers will be initiated at your request. And because Plaid is used to complete the transfers, Accrue Savings has no access to the username or passwords for your regular bank account.

Any funds held in your Accrue Savings that was contributed to the plan by you, but not used for purchases can be fully refunded to you without cost.

How do I contact Accrue Savings?

Accrue Savings can be contacted by email at [email protected], at [email protected], or using the email form on the website.

And though the company does not display it prominently on the website, you can call 1-844-918-3672 to speak with a live representative.

Who is Accrue Savings best for?

Accrue Savings makes abundant sense for anyone who either can’t qualify for traditional credit or wants to avoid financing arrangements entirely. It’s really a forced savings plan that incentivizes a return to cash on the barrel. That means you can buy what you want, without concern for interest and fees, payment arrangements after the fact, or credit complications.

The bottom line

Accrue Savings offers a genuine opportunity to get out of the buy now, pay later purchase/financing arrangements so typical in our economy, and so favored by merchants. You’ll be able to buy what you want, but without a debt overhang complicating your finances and your life.

Spend smartly and conquer debt for good:

Kevin Mercadante Freelance Contributor

Kevin Mercadante is professional personal finance blogger, and the owner of his own personal finance blog, OutOfYourRut.com.

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