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Charles Schwab Bank

Charles Schwab Visa 2% Cash Back Credit Card


Charles Schwab is offering a new cash back credit card called the Schwab Bank Invest First Visa Signature credit card. It gives you unlimited 2% cash back on purchases. Here's a list of the features:
  • no limit on the cash back you can earn
  • no minimum monthly purchase amount
  • no annual fee
  • no foreign exchange transaction fees
  • cash back automatically deposited into a Schwab One brokerage account each month
According to the Schwab FAQ, there are "no monthly account service fees and no minimum balance requirements for the Schwab One account when it is linked to your Schwab Bank Invest First card."

If you open the brokerage account, you may also want to open the Schwab Bank High Yield Investor Checking account. I last reviewed this checking account in this September post.

One thing to note is that you'll likely receive 2 hard credit pulls if you apply for the credit card and the brokerage account (3 if you also apply for the checking account).

Discover, Capital One, Citi and Chase have their cash back credit cards, but they all have different cash back percentages for different categories. Many of them have limits on the cash back, and you have to request the money once you reach certain levels. The unlimited 2% cash back combined with the simplicity makes this Schwab credit card one of the best in my opinion.

Below are some other less well known good cash back credit card deals:
  • Fidelity Rewards Visa Signature Card - 1.5% cash back on all purchases
  • PenFed's Visa Platinum Gas Cash Reward - 5% cash back from gas purchases paid at the pump, 2% cash back from supermarket purchases, and 1.25% from all other purchases. (my review)
  • EmigrantDirect's World MasterCard - 1.4% cash back on all purchases if you have maintained a $10K average balance in the savings account for 6 months. Otherwise, the cash back is only 0.50%.
  • FNBO Direct's ExtraEarnings Visa Credit Card - Earn cash back with 2% back for the first 12 billing cycles and 1% back after that directly deposited into your FNBO Direct Online Savings Account (my review)
Countrywide Bank used to offer a 2% cash back credit card that was linked to your Countrywide savings or money market account. I couldn't find any mention of it on their website. I called and verified that they ended this credit card a couple of months ago.

If you have any other recommended cash back credit cards, please leave a comment.

Credit for this find goes to this FW thread and the reader who emailed me news of this new card.

Related Pages: Charles Schwab Bank, San Francisco Bay, Reno

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Anonymous   |     |   Comment #1
Household Bank (HSBC) has a 2% (on all purchases) Master Card. They will mail a check in $ 25.00 increments.
Bill in NY
Anonymous   |     |   Comment #2
2% cashback till they change their terms and drop it to 1.25%
Anonymous   |     |   Comment #3
I could not find 2% credit card on HSBC website. I think they do not offer it anymore.
Anonymous   |     |   Comment #4
HSBC does offer a 2% MasterCard, co-branded by Orchard Bank. It's actually 3% on gas, 2% on everything else. http://www.fatwallet.com/forums/finance/739985
Anonymous   |     |   Comment #5
This is great! Thanks, Banking Guy!

I couldn't find the details about the reward units. What's the smallest amount we would need to spend to get the first unit of rewards?
Anonymous   |     |   Comment #6
Another good rewards card is the AMEX TrueEarnings that's available to Costco members. It pays 3% for gas and restaurant purchases, 2% for travel, and 1% for everything else - with no limit and no annual fee. Two negatives: you must belong to Costco, and rewards are paid only annually.
Anonymous   |     |   Comment #7
Regarding the Countrywide Bank 2% back credit card mentioned above as having been discontinued, I signed up for that card some months back, and have been using it, and redeeming rewards with it, even since.

I can't say if they are still offering the card to new applicants. But I used it just last week for a major purchase, and received the rewards points credit that I would normally receive.

Also, as an existing card holder, I've received no notice of any plan to change the existing terms of the account or to discontinue it. So to the best of my knowledge, existing card holders can continue to use and redeem rewards via the Countrywide card.
Anonymous   |     |   Comment #8
Is this card issued by FIA (Bank of America)?
Anonymous   |     |   Comment #9
The Chase Freedom card offers 3% cash back on gas station, grocery store, quick service payment/fast food restaurant, entertainment, utilities, cable/internet, cell and land-base phone, pet supplies, beauty salons, and a few other purchases. (15 categories in all.) All other purchases receive 1% cash back. You can redeem the cash back rewards in increments of $50.00. However, if you let it ride until you have $200.00 cash back, Chase will give you a $50.00 bonus. That’s what I do, I wait until I hit the $200.00 mark and then order a $250.00 bonus check.

The maximum 3% rebate is for $600.00 per month; it’s unlimited for the 1% rebate.
Anonymous   |     |   Comment #10
Downside for Schwab is that you need to put 1,000 into the brokage account to avoid the service fee. Taking account into the 5% CD interest, you are losing 4 dollars per month. That means you have to spend more than $400/month in order to gain benefits.
Anonymous   |     |   Comment #11
To anon 8:40;
The Schwab FAQ says:
"Do I have to pay for a Schwab One account?
There are no monthly account service fees and no minimum balance requirements for the Schwab One account when it is linked to your Schwab Bank Invest First card."

Do you know this to be false?
Anonymous   |     |   Comment #12
This is the highest (2% flat) unlimited category cash back card I see available right now. No tiering (dollar 1 benefit), no teaser rate for certain categories that is a hassle for me personally (and impossible to train my spouse regarding), no annual fee, no caps on benefit and monthly deposits makes it very compelling for those like me who pay their balances off every month.

Regarding account minimums, if you have any mutual fund or other investments in another investment account, simply transfer one position worth something comfortably north of $1,000 into a new Schwab One account, with none of the negative carry cost of keeping $1,000 in cash in an investment account at .1%.

If you don't have $1,000 in long-term investments then this probably isn't the card for you compared to other cash back offerings.

One other idea even if you don't have $1,000 in investments (FIRST pay off other interest bearing credit card debt) - the benefits accrue for up to 5 years. Use the card as a forced savings vehicle. When you have enough between available cash and charges that acrue to $1,000, use it to open the account and stick the money in your favorite long-term investment for retirement. May serve you better than the video games, coffee's or other stuff the reward would otherwise be spent on.
Anonymous   |     |   Comment #13
To Anonymous Dec 3, 08 (11:21am): that The Chase Freedom card sounds great. But how do you pay utilities, cable, and land-base phone bills with a credit card? Even online pay set-ups take it from a checking account don't they?
Steve (anonymous)   |     |   Comment #14
Regarding utilities, cable, etc bills, it just depends on the company. My cable company (Cox) and cell phone provider (Sprint) happen to allow credit card payments.
Anonymous   |     |   Comment #16
There is no minimum for the Schwab Bank cashback, if you spend $1 on the card, you get $0.02 cashback into your brokerage account.
Anonymous   |     |   Comment #17
As of June 2010 this card is no longer offered to new applicants.