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Schwab Credit Card Review

by Mr Credit Card

Update 3/31/2010 – Schwab has pulled the plug on this card. But read on to find out how I’ve made more than 2% just on one card – and find out which card it is.

schwabcreditcardIn an effort to lure and attract more new accounts, Schwab has recently come up with a cash rebate credit card where your rebates are automatically debited into your dSchwab account. So how does this card stack up? Let’s take a look.

Rebate Formula – The Schwab credit card pays a 2% cash rebate for every dollar that you spend on the card. You can earn unlimited rebates. The rebates that you earn are automatically deposited into your schwab account at the end of every month.

Eligible Accounts – To actually get the 2% rebates. You need an eligible Schwab account. If you do not open a Schwab account, you will still accumulate rebates which Schwab will hold for 5 years. Eligible accounts include Individual, joint, or trust (living and revocable) Schwab One accounts are eligible to be linked to your Schwab Bank Invest First card to receive cash rewards. Ineligible accounts include: Schwab One organization accounts for corporations, limited liability corporations, non-incorporated associations, partnerships, investment clubs, DBA operations, nonprofits and charities, as well as general brokerage accounts, IRAs, and other retirement accounts.

Fees – There is no annual fee for this card. The APR is 13.74% and there is a 2.99% balance transfer offer for 6 months. Bear in mind that like most other cards these days, there is a 3% balance transfer fee charge, with a $10 minimum and no caps on the fee. The Schwab credit card also has the honor of being one of the rare credit cards which charges no foreign transaction fee.

Other Benefits – The Schwab credit card comes in either the Visa Signature version or the Platinum version. The Visa Signature card has additional benefits such as no preset spending limit,1 Visa Signature Dining and Visa Signature Access. To receive a Schwab Bank Invest First Visa Signature card, you must qualify for a credit line of $5,000 or more. If you are approved for a credit line less than $5,000, you will automatically be offered the Schwab Bank Invest First Platinum Plus Visa card.

Verdict – So here’s my verdict. 2% cash rebates is a great offer from Schwab. It is certainly better than most generic 1% cash back cards out there. But before you jump onto the bandwagon, make sure you have an eligible account because without one, your rebates cannot be deposited. For those looking to open a new Schwab, this card might just do the trick for you.

But is 2% the best for everyone? Not really. It depends on how much you spend? What you actually use your card for? My main cash back credit card has been the Blue Cash from American Express. Over the last few years, I’ve averaged about 2.3% in annual rebates. The reason why this is possible is that I could earn 5% on gas, supermarket and drugstore spending after I cross the spending tier and for me, it has made me more than 2% (better schwab). Plus I do not have to open an account with them. I have screen shots of the rebates I earn in a review I did of the Blue Cash.

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29 Responses to “Schwab Credit Card Review”

  1. Eric Says:

    I hear you have to have stellar credit to qualify. My score is around 730 so it’s not the top of the top. I wonder if I would get approved…

  2. Mark Says:

    I applied for this card a couple months ago after hearing about it on a lot of the blogs…so far I’ve been pretty pleased. My first bill came in this month so I can’t comment too much on how easily the rewards are deposited.

    My only complaint so far is actually trying to pay my bill. I’m a stickler for paying them as soon as they come in, and I wasn’t able to because I have to set up my bank accounts with their bill paying service, which takes a few days to verify the accounts.

  3. Bottomline Says:

    The bottom line is that the Discover and American Express cards are not accepted everywhere. I’ve had the cards rejected from so many restaurants, online retailers, county/city municipalities, vacation resorts, utility companies, etc that I can’t stand the cards. Once you factor in acceptance of cards, Visa cash rewards ends up just as high. If you don’t like carrying around multiple cards (or risk hurting your credit with multiple cards), then just choose one – Visa.

  4. Irv Says:

    I don’t see where “ask mr. credit card factored in Schwab’s no fee for using the card in other countries, where almost all others charge 3% for charges in other nations.

  5. Duke Says:

    One other thing, this calculator assumes that you get the 5% cash back rewards for all 12 months when you actually only get each of the categories for 3 months out of the year. Also, you do not start collecting the full rewards amount until you reach $3,000 of annual credit card sales. I’m going with the Schwab account…way too many benefits to pass up. Also, I’m tired of the monitoring the points systems like the discover card. It’s annoying to keep track of what places qualify for each category. And, if I’m not mistaken, typically a department store like Wal-Mart is not included for the groceries category. Well, if you have to go somewhere else and you cost sensitive, then you’ll probably end up spending 5% more somewhere else that will activate your 5% cash back. Schwab is easy and clean.

  6. dan Says:

    Very Sloppy and misleading calculator like Duke says.
    I am thinking of getting the Schwab combined with AMex Blue Cash.
    I put about 80-100k on cards each year.
    I could give two $%^ about the prestige of the Platinum…I know what I make per year and can easily qualify but the idea of paying 450/yr for a card for an occasional benefit seems silly. why should I grab a 1% reward when there are better rewards out there.
    Our family puts about 20G on the bill for groceries.
    My planned strategy is to pay all groceries/gas on AMex Blue and take advantage of 5% back and then use Schwab at 2$ for everything else.
    I Was looking at the Starwood versus Hilton AMex cards becasue I
    I figure taking into account $6500 needed to get the 5% to kick in I will overall get about 2.2-2.4% back per year on the cards.

  7. Living Revocable Trust Says:

    I got my card a few months back and I have no trouble with it so far even after traveling to several countries. My only gripe is that many stores in Asia don’t accept credit cards unless you’re buying in a department store.

  8. Credit Card Chaser Says:

    I really like this card because of the full 2% cash back without having to hassle with different cash back percentages in different categories. I use a Visa with 1% cash back and an AmEx with 1% to 3% cash back right now but I have been thinking about getting this Schwab card.

  9. Milt Says:

    I have another Schwab credit card that gives World Points that can be redeemed for cash. How does this card compare with the Inves First card?

  10. Chuck Says:

    This card is easy to use and the only card I use, no fees, is accepted anywhere, easy to pay, I get 2% rewards deposited in my account automatically, don’t have to think about the 3 month cycles like Chase and Discover cards have. Setting up the online payment procedure was a pain at first, history now.

  11. Bill Says:

    No hassles, wide acceptance and no timeframes, a flat 2% is deposited into my account every month, I use the schwab card for everything but resturants and gas(the AMEX/Costco card gives 3% back, but as a costco coupon once a year) and there is no foreign transaction fee. If you pay your bill in full every month, travel and have a Schwab account, its the best way to go…

  12. Joel DErrico Says:

    I have the card and am happy with the 2% into the schwab account…There is a credit scoring problem with reporting that truly needs to be fixed….Here it is:

    If one has a $5000.00 or a 10,000. or $20,000 credit line with the account FIA card services does not tell FICO,Experian,Transunion,and Equifax the line that is on your statement…..SO as a result the reporting agencies take your highest amount charged say 4000.00 in one given month and then every month thereafter the agencies look at what you charge say if it’s 3K or 2800 of 3800 the agencies feel your maxed at more than 50% of that card….WHEN you are realy not THIS HURTS YOUR CREDIT SCORE…I callled FIA and they tried to switch me to “another product without the 2%”….

    This happend to me and I lost 25 points on my score.. even though I have ahigh line they look at the highest amount charges and consider that the line…ITS BOGUS and hurts your score …then you contact E,E and TransU and FICO your get a run around

    WHAT CAN BE DONE…???

  13. Philip Thomas Says:

    I am currently a freshman in college. When I first began college, I became interested in investing and I set up a Charles Schwab brokerage account with the Schwab high-yield investor checking. I found the checking account to be excellent and have been banking exclusively with Schwab since then. About a month later, I learned about the Schwab credit card from a friend and I applied. I was accepted, albeit with a somewhat low credit limit. Just some notes: I am a college student with a part time job, this is my first (and only) credit card and I do not have an established credit history. When I applied they did ask for the name of my university and for my major, so I am pretty sure that that factored in, plus having liquid assets in my Schwab checking may have been a factor too. In general, I love the card. I use it for all of my purchases because of the 2% cash back. Requesting a credit line increase is a simple process through the site, but you do not hear back immediately (I just requested a credit line increase). Unfortunately, the online interface is rather basic and it seems to be down for maintenance quite often. Overall, the card is superior due to its simplicity- it just works without any hassle.

  14. alan Says:

    DISCOVER lies.

    They say 5% back on hotels, but it’s 5% of the first $400 spent (or some other ridiculous low amount).

    And then the tiered rebate for the first couple of thousand dollars.

    2% across the board is pretty easy to determine.

    I wonder how it compares to AmEx blue, but they have a tiered payout also.

    Thanks for allow my input.

  15. Mike Says:

    I’m also a college student and was approved for this card. I recently got my parents to apply for it and they have been as impressed with it as I have been. I feel privileged and somewhat smarter than most people for having this card.

  16. Jonathan Says:

    Alan: couldn’t agree more. Discover has by theory a pretty good reward program and they do have excellent customer service but there’s a lot of fine print with their reward program.

    I’m a college student also. Got this card at 18 years old, with only 5 months of credit history. Opened the brokerage acct too. Have been using it for about 4 months now and have been very happy. Got my parents and siblings on board also. We all love the 2% and how quickly it comes. My parents used to use the AmEx blue (they spend about $100,000 a year) but their average cash back was only like 1.3% for the year, and in addition to their usual spending we charged my sisters and mines college tuition on there! This will be much better for this year. My parents are also using their Costco AmEx, but only at costco, for travel (2% also, but there are amex travel benefits like checked bag insurance), eating out (3%), and gas (3%).

  17. Jeanine Strauss Says:

    Do you also pay by mileage on any airline?

  18. Chris Says:

    Thanks for this info since the Schwab site is terrible and the info is not there.

    The run-on sentence above is confusing: “Eligible accounts include Individual, joint, or trust (living and revocable) Schwab One accounts are eligible to be linked to your Schwab Bank Invest First card to receive cash rewards.”

    Do I need a brokerage account with Schwab or just a checking account?

  19. Bisulfite Says:

    I have this card and am getting rid of it. Schwab’s own card is actually from FIA services now Bank of America. The worst thing about the card it that it isn’t integrated with Schwab’s own bill pay website…that’s because BoA won’t agree to the integration because they are trying to drive users to their own website. The downside is that you don’t get any email alerts or alerts in Schwab bill pay…

    If you’re like me and get 99.9% of your bills in BillPay, it is easy to miss the paper bills among all the junk mail.

  20. Eric Says:

    I am very happy with my Schwab card. I had quite a few expenses in the past year, and I got more cash out of it than I did with my other card – the AMEX Costco. Although I don’t get automatic alerts, once I get my paper statement, I have always paid my bill from the Schwab bill pay service to FIA Card Service without any problem.

  21. Josh Says:

    I am very frustrated to have been rejected for this card. Last time I checked, two years ago, my credit score was 736. Nothing has happened in the meantime that should have lowered it. Considering I am 29 and have $365k net worth, including $45,000 at a Schwab IRA that I’ve had for 11 years, I figured I’d get more consideration…

    Maybe the problem is that I haven’t had a credit card in so long and have never taken out a loan. It’s ridiculous that you need to use a credit card to get a good credit rating, but…

  22. Maree Says:

    this card sounds good IF YOU CAN GET THROUGH TO THE VISA CREDIT CARD NUMBER TO ASK QUESTIONS. I have tried THREE times only to hear “please hold please hold please hold.” then disconnect.The brokers at CS say it is an issue they have complained about but app no one does anything about it. The # that hangs up is 866-724-9220. Broker was going to put me through to customer service — and then i got disconnected AGAIN!. IS THIS THE TYPE OF SERVICE TO EXPECT ONCE YOU SIGN UP?

  23. Seabiker Says:

    TOO LATE. This card is no longer available past March 31 and when I talked to customer service they said they were told there are no plans to ever offer it again.

  24. Bruce Says:

    I juggle my Schwab VISA with the Discover More Card and my Discover Business Card. The Discover Business Card is THE best. 20% cash back on flowers, 5% on office supplies. 5% at Apple Store when I get my IPAD later this year assuming the right upgrades are made.

  25. John Cach Says:

    Please tell me how I can get a Charles Schwab Credit Card.

  26. Ken Allan Says:

    I need to begin investing in a few companies i really like.I’m talking about small investments for now.

  27. Jeep Says:

    Schwab’s Invest First VISA Signature card is just as great as other posters have said. However, I shop at Costco and Sam’s Club quite a bit and neither of them take VISA. It’s a PIA, but I keep an AMEX card for Costco and a MasterCard for Sam’s. Each pays only one percent, but it beats nothing. I really wish these wholesale stores would start taking VISA.

  28. Ed Says:

    I have most of my 401K and IRA in Schwab. Also I do have regular account with Schwab, though I don’t use it now (I created for IRA rollover). If I will open Schwab Credit Card, will I be able to pay my monthly bills from Comcast, Verizon etc, like I do it now using my existing Visa? Will I earn 2% also?
    Is there possibility that over time, that 2% might be change to something less?
    Thanks.

  29. heather Says:

    You should check out the PenFed visa card instead of the amex blue. has 5% on gas 2% on groceries and 1% everything else. 2% foreign fee (not as good as schwab but better than 3%) and no tier system. So the article writer would be getting more cash back with this card than his amex.

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