EmigrantDirect Releases Cash Back Card
Jan 20, 2006 - 12:59 PM by Ken Tumin
EmigrantDirect finally releases its new credit card called the AmericanDream Credit Card. Info on the card is available at EmigrantDirect. Unfortunately, it's not quite as good as what everyone was anticipating. It was suppose to have the highest cash back reward. But the maximum cash back rebate is only 1.25%, and this requires $10K in your savings account for 6 months to qualify for this percentage. If your balance is less than $10K, the cash rebate is only 0.5%.
I'm still reading over the small print. I'll try to post more about it later.
Looks like this is a way that EmigrantDirect hopes to reduce rate chasers who'll run to the bank with the highest savings account rates. The $10K and 6-month requirement seems intent to encourage account holders to keep their money at Emigrant. Interesting that it comes only one day after ING Direct's 4.75% announcement.
Credit for this find goes to Neo.
I'm still reading over the small print. I'll try to post more about it later.
Looks like this is a way that EmigrantDirect hopes to reduce rate chasers who'll run to the bank with the highest savings account rates. The $10K and 6-month requirement seems intent to encourage account holders to keep their money at Emigrant. Interesting that it comes only one day after ING Direct's 4.75% announcement.
Credit for this find goes to Neo.
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Anonymous - #1, Friday, January 20, 2006 - 2:57 PM
BOOO! I don't even have an ED acount, but if they would have come through on this I would have signed up. Go ING and HSBC I guess...
andrea (anonymous) - #2, Friday, January 20, 2006 - 3:57 PM
This ED card is more than disappointing, especially after the big announcement a few months ago. I don't think it will encourage rate chasers to keep their money at ED, because rate chasers are smarter and probably have a credit card that gives them 5% cash back at gas stations, grocery stores, and drugstores.
Anonymous - #3, Friday, January 20, 2006 - 4:50 PM
My cash rebate credit card gives me 5% back at grocery stores, drug stores & gas stations, and 1% everywhere else. I have not received a 1099-INT for this cashback. I suspect the cashback on the ED card is added to your usual monthly interest, and therefore you get a 1099-INT at year-end, and consequently pay tax on it. Therefore the 1.25% cashback is only worth 0.90% to someone in the 28% tax bracket.
bitstreamer (anonymous) - #4, Friday, January 20, 2006 - 5:00 PM
I think that an HSBC 4.25% savings account and a Citi Dividend Mastercard is the way to go.
Anonymous - #5, Friday, January 20, 2006 - 5:28 PM
2 thumbs way down
Banking Guy (anonymous) - #6, Friday, January 20, 2006 - 6:07 PM
As bitstreamer mentioned, a 4.25% HSBC savings account along with a Citi Dividend Mastercard is a much better deal. Perhaps ING Direct instead of HSBC until April 15th would be best.
About the taxes, I found this in the terms:
You are responsible for any taxes that may be due on the cash back rewards you receive
So perhaps it won't be treated like bank bonuses.
Neo (anonymous) - #7, Friday, January 20, 2006 - 7:54 PM
I agree with bitstreamer. I will be sticking with my Citibank card since it pays a higher % and using ING's current 4.75% promotion. If I get close to the $300/yr limit, I might consider getting another reward card.
Neo
Tom Mayer (anonymous) - #8, Thursday, October 25, 2007 - 2:05 AM
And is this card called American Dream? hmmm...I think there are many other credit cards that offer bigger cash back such as Blue Cash card from American Express, which offers up to 5% cash back on everyday purchases.
Karen (anonymous) - #9, Wednesday, January 30, 2008 - 6:29 AM
As any other tpes of credit cards cash back credit card has its disadvantages. You shouldn't wait that you will get most of the spend money back.
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