Why Schwab Visa’s 2 Percent Rebate May Fall
Ablang
Why Schwab Visa’s 2 Percent Rebate May Fall
By RON LIEBER
The Schwab Bank Invest First Visa card is one of the most generous
credit cards in the land. It has no annual fee but takes 2 percent of
everything you spend and drops it back into a Schwab brokerage
account. Most cash-back credit cards pay half that.
Perhaps it is just a bit too good. While the company has only been
offering the card for just over a year, it recently stopped promoting
it on its Web site, which is never a good sign. Indeed, Matt Hurwitz,
a company spokesman, said in an e-mail that Schwab is “evaluating the
program going forward.”
This is usually code for diminishing the rewards. So the natural
question to ask is what went wrong?
When Schwab introduced the card, I signed up right away. But I also
wondered whether the company could afford to offer a card that was
that generous for very long, and I mentioned my skepticism to a Schwab
executive, Richard Musci. “We don’t put things out there that we don’t
intend to stand behind,” he told me in early January.
To afford to pay out 2 percent in rebates, Schwab and the Bank of
America subsidiary that is its partner in the product need to make
enough money from merchant fees and interest that cardholders pay. In
some instances, a partner like Schwab may be willing to finance a
chunk of the rebate in the hope that cardholders will move big
brokerage accounts to Schwab from other firms.
Given that Schwab is reconsidering the product, it’s possible that a
lot of people opened new Schwab accounts just to collect the rebate
from the card but didn’t put any other money there. Or, perhaps
current Schwab customers signed up for cards and ran plenty of money
through them but didn’t carry balances often enough to make the
economics of the card work.
Mr. Hurwitz would not comment on my theories but did add that the
company had no plans to change the benefits for current cardholders.
What that would suggest is that if and when the company reduces the
rebate, people who already have the card will be grandfathered in at
the old earn rate of 2 percent.
So if you’ve been considering the card but still haven’t signed up
yet, now’s the time. While the application is gone from the Web, you
can still apply via phone at 866-724-9223.
Meanwhile, Fidelity still offers a couple of cash-back American
Express cards. Amex is not accepted at as many merchants as Visa,
though.
http://bucks.blogs.nytimes.com/2009/12/16/why-schwab-visas-2o-percent-rebate-may-fall/
SMS
> December 16, 2009, 1:45 pm
> By RON LIEBER
>
> The Schwab Bank Invest First Visa card is one of the most generous
> credit cards in the land. It has no annual fee but takes 2 percent of
> everything you spend and drops it back into a Schwab brokerage
> account. Most cash-back credit cards pay half that.
<snip>
Schwab keeps calling me ever since I got that card asking when I'm going
to do some other business with them. Last week when they called I told
them that I may have some new money to invest that I'm receiving from my
mom's estate, and a few days later I got a sympathy card in the mail.
I wonder how long they'll keep that card going. Not only does it have
the best reward program of any no-fee credit card, it also has no
foreign transaction fees added by Schwab, and they absorb the 1% charged
by Visa. They must have been overwhelmed with applications for it.
Countrywide had a 2% card that did not survive the BofA acquisition. The
replacement card sucked. I ended up with a BofA savings account that I
didn't want as part of that whole deal (you had to have the 2% deposited
into a Countrywide account). It was very hard to close that account, I
went to a BofA branch and they were a pain in the butt when it came to
Countrywide accounts. I would have kept it, but they started adding all
sorts of fees to their money market accounts, so I bailed.
Meanwhile, another card I have sent a letter stating that a free
domestic flight will soon be 30,000 points rather than the current
25,000 (any airline up to $500, no restrictions). I'd cancel that card
if I were sure that Schwab isn't going to change the 2%.
Discover Private Issue used to be 2% but they discontinued that card.
clams_casino
>In article
><63c82f42-1b2e-4781...@y32g2000prd.googlegroups.com>,
> Ablang <ron...@gmail.com> wrote:
>
>
>
>> December 16, 2009, 1:45 pm
>>Why Schwab Visa�s 2 Percent Rebate May Fall
>>By RON LIEBER
>>
>>The Schwab Bank Invest First Visa card is one of the most generous
>>credit cards in the land.
>>
>>
>
>Those in the market for a credit card should shop for their next credit
>card at http://www.bankrate.com which lists all kinds of deals on
>consumer banking and finance instruments.
>
>
Any other suggested cards for maximum rebates with no fee where interest
rate is of no concern?
My Chase Freedom card was recently "upgraded" from paying 2% down to 1%.
The Real Bev
> Shawn Hirn wrote:
>> Ablang <ron...@gmail.com> wrote:
>>
>>>December 16, 2009, 1:45 pm
>>>Why Schwab Visa�s 2 Percent Rebate May Fall
>>>By RON LIEBER
>>>
>>>The Schwab Bank Invest First Visa card is one of the most generous
>>>credit cards in the land.
>>
>>Those in the market for a credit card should shop for their next credit
>>card at http://www.bankrate.com which lists all kinds of deals on
>>consumer banking and finance instruments.
>
> Any other suggested cards for maximum rebates with no fee where interest
> rate is of no concern?
The Costco Amex card gives you 3% on gasoline, and Costco's price is generally
lower than anybody else's.
> My Chase Freedom card was recently "upgraded" from paying 2% down to 1%.
BUT you get 3% on discount stores, computer/electronics stores and bookstores.
I hate the "Here are the things you'll get bigger rebates on during the next
calendar quarter" promotions. I've got a LOT of cards (whenever somebody
offers a significant premium for getting their card, I get it) and it's a real
pain keeping that crap straight.
I've had a Discover card ever since they started, but didn't use it until they
liberalized their rebate policy recently. Right now it's giving 3% on all
online shopping.
--
Cheers, Bev
===============================================
Jesus saves. Buddha makes incremental backups.
h
"The Real Bev" <bashl...@gmail.com> wrote in message
news:hgef1d$57b$1...@news.eternal-september.org...
which is all I use the card for (business). I get 5% back on almost
everything, and I've had the card for maybe 15 years.
The Real Bev
> Huh. My BoA is 1% on most things, but 5% on the "core" category purchases,
> which is all I use the card for (business). I get 5% back on almost
> everything, and I've had the card for maybe 15 years.
Interesting. I don't use my BofA card because they don't even give the usual
1% that everybody else does. If they do, they never told me about it :-(
--
Cheers, Bev
====================================================================
Paranoid schizophrenics outnumber their enemies at least two to one.
h
>h wrote:
>
>> Huh. My BoA is 1% on most things, but 5% on the "core" category
>> purchases, which is all I use the card for (business). I get 5% back on
>> almost everything, and I've had the card for maybe 15 years.
>
> Interesting. I don't use my BofA card because they don't even give the
> usual 1% that everybody else does. If they do, they never told me about
> it :-(
>
Weird. It was MBNA originally until BoA ate them. The terms have never
changed. Customer Service isn't quite as good, though.
clams_casino
BOA, BA, Discover, etc each offer a number of cards with different rewards.
SMS
> Any other suggested cards for maximum rebates with no fee where interest
> rate is of no concern?
Pretty sure that the Schwab card is the only card with 2% any more.
Also, the lack of foreign transaction fees is a big plus if you travel
outside the U.S..
SMS
> Those in the market for a credit card should shop for their next credit
> card at http://www.bankrate.com which lists all kinds of deals on
> consumer banking and finance instruments.
Basically that's one big advertising web site that's attempting to get
kickbacks from the card issuers if you click through.
If you search for rewards cards, the Schwab card doesn't even show up,
even though it's by far the best rewards card available (at least until
Schwab wises up!).
All in all, a pretty worthless site.
h
"SMS" <scharf...@geemail.com> wrote in message
news:4b2b99fa$0$1588$742e...@news.sonic.net...
My BoA is no fee, 1% on most but 5% on "core category", which is most of my
business expenses (stuff I buy the most). I buy almost everything on this
card and got back $750 this year on purchases of $26,000, which works out to
over 3%.
sf
wrote:
Are you talking about the "conversion fee"? It's a BS charge, because
converting from whatever currency to USD is all computerized.
--
I love cooking with wine.
Sometimes I even put it in the food.