Featured Savings Rates

Popular Posts

Featured Accounts

Highest Cash Back Credit Card from EmigrantDirect?


EmigrantDirect sent out an email last night to its customers not only informing them of its 4.00% APY rate increase but also of a new credit card that it says it'll be offering by the end of the year.

Here is a section of the email:

We are also pleased to announce the upcoming launch of a no-fee credit card from EmigrantDirect offering the highest cash back rebate in the country on all your purchases - from the first dollar spent on your card to the very last. This revolutionary credit card featuring platinum-level benefits will be offered only to EmigrantDirect customers and will be available before yearend.

This looks like another reason to join EmigrantDirect. I wonder how high the cash back rate will be. This Fatwallet thread discusses an August E.D. survey about such a cash back credit card. Apparently, E.D. was tossing around the idea of a 1.25% cash back card. As was mentioned in the thread, if they want to stand out like they stand out on savings rate, they need to offer at least 2%. One of the highest cash back cards now is Fidelity MasterCard which has a flat 1.5% cash back. Also, there are several 5%/1% cash back cards which reward you 5% back on everyday purchases and 1% on all others (This Fatwallet thread summarizes many of these).

Are Credit Card Cash Back Rebates Taxable?

Also mentioned in that thread was the worry that if E.D. deposits the rebates into your savings account, it'll consider it interest which is taxable as income. This is how banks handle any type of signup bonus. A common question is if cash back rewards are taxable. According to this IRS page it should not be. But there is still some uncertainty since it doesn't specifically mention credit cards.

Anonymous   |     |   Comment #1
To register for a priority invite for ED's new credit card, send your name & e-mail address to emigrantdirect@emigrant.com.

I think I'll stick with my current cash rebate credit cards. I get 5% on everday purchases (supermarkets, drug stores, gas stations) and 1% everywhere else. The credit card company does not issue a 1099-INT, so if I don't report it to the IRS, it's tax-free. ED's rebate will no doubt appear on their year-end 1099.
Banking Guy
Banking Guy (anonymous)   |     |   Comment #2
Yes, I think you're right. I bet it would show up along with your interest on the 1099.

I also have a 5% cash back card. I might be tempted to get a new ED credit card if it offers something very high like 3% or more for all purchases. But it probably won't be that high.
Anonymous   |     |   Comment #3
You must have an ED savings account that currently pays 4.80% APY interest (nice) and maintain a balance of at least $10,000 (not so nice) to have card qualify for 1.40% rebate. Is it worth it? I am hesitant to get card. Rebate not comparable to one I currently like.

I also have the credit card that offers 5% back on gas, supermarkets and drug store purchases. Really great with gas at $3 per gallon this holiday weekend. Happy 4th of July!

If you qualify for the card you get a $5 rebate credit with balance transfers of at least $1,500 for 12 to 15 months at 0% APR. Rebates are paid out by request after at least $50 earned, maximum paid $300 total per year. It is best not to make purchases with an outstanding balance transfer. It defeats the purpose of paying off a debt without earning more interest.

Can offer 8 referrals for card. Please forward requests with your name and e-mail address to mio008@msn.com. Please respond by July 15, 2006.
Anonymous   |     |   Comment #4
UPDATE on above post:
Emigrant Direct just raised their rate to 5.00%!
CrediThinker (anonymous)   |     |   Comment #8
It's really great to know about it at least. To increase cash back %s was so cool.
They are trying to make our life easier. Thanks them!