Schwab cash-back credit card??

[ThriftoRama]

I ran across an article about Charles Schwab's brand-new cash-back rewards credit card. No annual fee, 2 percent on all purchases, with no limits. The money is deposited into your Schwab brokerage account every month. I might look into it. we already have a brokerage account there and this would be a possibly good replacement for our Amazon reward card... Since I pay off my cards every month, it might be a good way to stash some extra cash.

Schwab Has New Rebate Card - WSJ.com

[Broken Arrow]

Oh yeah, I read this somewhere else, but the one requirement you had to have was to open a Schwab One account.

But in your case, where you already have one, then that's not an issue.

[noppenbd]

It looks like a good deal so I checked it out. Currently we use a Chase Freedom card (3% cash back on top 3 categories up to $600 a month). When you get 200 points you can cash it in for a $250 check. Over the last 7 months we are averaging about 2.3% back when you factor in the monthly limits and the additional savings for waiting to get the $250 check. So for us it is better to stay with Chase.

With Chase, if you spend $2000 a month, and your top 3 categories total more than $600 (easy to do with groceries as one of the categories), you end up getting 32 points a month. If you save up your points until you have 200 you can redeem that for $250. At 32 points a month it takes 6.25 months on average to get to 200. That means you have to spend $2000*6.25= $12500 to get $250, which works out to exactly 2%.

Bottom line, if you spend more than $2000 a month you are better off with the Schwab card, if you spend less, the Chase card is probably a better deal.

[buzz]

Bottom line, if you spend more than $2000 a month you are better off with the Schwab card, if you spend less, the Chase card is probably a better deal.

I vote for having both.

[conancare]

Hi darryl,
I agree with you. because most of the credit card company provide some great offers then later on the amend it which ultimatly card user have to bare. I prefer to to get attracted by such offers.

Regards,
Conan
kotaksecurities.com

[southerndoc]

I've had a Schwab Visa for the past 4 months. An excellent card, in my opinion. Like clockwork, 2% cashback is deposited into my Schwab One brokerage account on the 4th-5th of every month. I don't have to call them to request the reward.

You have up to 5 years to open the brokerage account to get your rewards. They will stay "banked" until then (unless something changes).

The other major perk of the Schwab Visa is that they do not charge FOREX fees for foreign transactions. Since I travel overseas a lot, this is a huge bonus. (Amex was ripping me off with 2.5% on my Delta Platinum card.) The exchange rates for Schwab are pretty good too.

I ended up opening a Schwab Visa, Schwab One brokerage, Schwab checking (0.75% APY, was 1% when I opened), and Schwab savings account (1.5% APY, was 2% when opened). Their customer service has been top notch and unlike any other bank/brokerage I've dealt with. I'm an Apex client of TD Ameritrade, and I still don't get as good of customer service as from Schwab. They are friendly, promptly respond to emails, and are available 24/7 and have always been courteous and helpful (even with a foreign wire transfer where I screwed up the account number; they called me to confirm it was for me and fixed everything!).

Their ATM card for their checking/savings has no FOREX fees and any ATM charges are reimbursed to you at the end of the month. The only drawback to their checking/savings is that you can't deposit cash (still require a brick and mortar bank for that), and any external account transfers (i.e., BoA to Schwab, Wachovia to Schwab, etc.) you must call them to perform. They hold your money for 3 days during the transfer, but unlike most banks, you start earning interest on it immediately. The Schwab One brokerage account you can transfer to/from external accounts online, which is supposed to be available for checking/savings account in the next two-three months according to a Schwab rep. Any transfer from Schwab checking to/from your brokerage account is instantly available.

Overall an excellent deal. One of the best I've came across. Just hope they don't reduce the cashback rewards at a later date.

[Walt_Pennsyl]

I read about this too, but the one requirement you had to have was to open a Schwab One account.

But in your case, where you already have one, then that's not an issue.

[kork13]

Okay, I'm resurrecting this thread, but here's my situation, and I'm looking for a bit of advice with any experience you all may have here...

I just recently found out that my next assignment with the military will be to Japan (I'll be moving there in April after I finish a 4 month TDY en-route). So considering the 1-3% foreign transaction fees that most credit cards charge (1% for both of my 2 current cards), I went looking for ones that don't have them, ran across this Schwab card, and remembered it being mentioned here... thus my post here.

My only real hesitation in applying for this card is the requirement for a paired brokerage account. The 2% cash reward and no foreign transaction fees are outstanding in my eyes -- exactly what I'm looking for. But right now, I only invest in mutual funds, and I'm rather happy with the MF's I have at USAA. How would the brokerage account work for me if I were to still maintain my investments at USAA? I do expect to eventually invest in individual stocks, but haven't yet had the time to devote to actually researching and getting into that, and I'm not sure when I will actually start into it.

Any thoughts/advice would be much appreciated...

[southerndoc]

You don't have to open a brokerage account to get the cash rewards. FIA (which administers the card) will keep your rewards points until you open a brokerage account. You can take up to five years to open the account and then claim your rewards. If you haven't claimed them within five years, they will start expiring. Of course, anything now may not apply in the future with the credit card industry undergoing a lot of regulation.

You can still keep your USAA funds at whatever brokerage you are using now. Mutual funds in traditional investment accounts can be pretty tax intensive, but if you wanted to invest in mutual funds through Schwab, you can use Schwab's mutual funds without any commissions. If you purchase other mutual funds through Schwab, you'll pay a $49 per trade commission.

[maat55]

It looks like a good deal so I checked it out. Currently we use a Chase Freedom card (3% cash back on top 3 categories up to $600 a month). When you get 200 points you can cash it in for a $250 check. Over the last 7 months we are averaging about 2.3% back when you factor in the monthly limits and the additional savings for waiting to get the $250 check. So for us it is better to stay with Chase.

With Chase, if you spend $2000 a month, and your top 3 categories total more than $600 (easy to do with groceries as one of the categories), you end up getting 32 points a month. If you save up your points until you have 200 you can redeem that for $250. At 32 points a month it takes 6.25 months on average to get to 200. That means you have to spend $2000*6.25= $12500 to get $250, which works out to exactly 2%.

Bottom line, if you spend more than $2000 a month you are better off with the Schwab card, if you spend less, the Chase card is probably a better deal.

I have the chase freedom card, how am I missing out on this?

[amarowsky]

I went to the Schwab website and I see it's a minimum of $1000 to open a brokerage account. But I scoured the brokerage application page and rules and I could not find if they had any monthly fee's. By that I saw no text, rules, or bullets stating that they did or did not charge a monthly fee. ThriftOrama do you know of any monthly fee's for having the brokerage account with Schwab?

That 2% does sound very enticing, and I would consider opening an account for that rebate, but I also would want some more information about how long they plan on running that deal. But I have never had a rewards card so maybe I will spend some of today looking around for one that has some pretty solid rewards.

Only credit card I have now is though my bank, and it suffices well. It's only got like a 8500 limit on it, but it's got a really good rate at 10.99% (least I think it's good). And Since this month I finally paid it off and no outstanding debt I could just try banking a little extra rebate cash by paying off that 2% schwab'er every month in full.

[Slug]

I've had the Schwab card for a few months now. As noted, the money flows in like clockwork, you can calculate your reward easily in your head as a check, and the customer service is outstanding. Tested the no Forex fees in Spain...no fees for me. This is my primary card. Still have PFCU Platinum for 5% gas, Upromise for specific 10% back restaurants, and Marriott for Marriott stays.

Both PFCU and Schwab cards are reviewed on my blog.

[southerndoc]

I think they waive the minimum requirement if you have a credit card or checking account. It may be buried in there somewhere. Just call them and ask. They've always been very helpful when I called.

They've been offering the 2% cash back rewards for a while now (over a year). There is no plan to discontinue it as far as I know, but I think a lot of credit cards will be scaling back their rewards with the new credit card regulations.