I’ve been fortunate enough to have used the Schwab Invest First Visa credit card the last few years. (Schwab stopped offering the card and transferred its management to FIA Card Services back a little more than a year ago. Incidentally, FIA Card Services has been owned by Bank of America since 2006.) It was 2% cash back on everything with the cash being deposited, regardless of the amount, to your brokerage account each and every month. There was no talk about accumulating points or only being able to receive the cash back in increments of $25. It was perfect. I had auto-pay set up so I never had to remember to pay (just had to make sure I had enough cash to cover the balance!). As an example, if I spent $405.23 in a month, $8.10 would be automatically deposited at the end of the billing period. Sure, a little amount, but still, I’d rather have that $8.10 earning interest for me. With my old Citi 1% cash back card, that $8.10 would just sit there until it reached $50 exactly. I’d then be able to receive a check for the $50 and anything over that would accumulate until it again reached $50. However, the Citi card was great in that you actually got true cash back rather than points that you redeemed for cash. With the true cash back the company can’t suddenly say: ‘by the way, that $50 that you have…it’s now only worth $25.’ With points, however, I have a feeling that something like that could more easily happen.
So… The reason for writing this post: With the market dropping so much today I thought it would be a good time to contribute to my Roth IRA and effectively buy “cheap” stocks. I’m looking at contributing the max that I’d be able to afford and still be able to pay my various monthly payments. The credit card bill is a large portion of that so I tried logging into my account.
I punched in the usual username and password. My normal security image showed up just as it should. However, I got a message stating, “No Accounts Registered.” I called the 800 number of customer service and was told that my credit card was being changed to a Bank of America card. Supposedly, multiple mailings had gone out to this effect at some point. (None of which I have received.) The customer service reps were quite friendly and the wait times were minimal to none, but I was still irritated about all of this. It’s basically like my card was stolen and I am now forced to change all my recurring bills that use the old card. Also, I was told that I was changed into a 1% cash back card. I’d have to call back after receiving the new card in order to change my account and credit card number yet again in order to get the 1-2-3 card, which gives 1% on everything, 2% on groceries, and 3% on gas. (Seems much better to me than the flat 1% cash back.) I tried asking customer service what the catch was…why wouldn’t everyone get the 1-2-3 card? But, she couldn’t really tell me. She also said that my current auto-pay will carry over, but I’ll have to keep a close eye on that too.
The funny thing is that I am now unable to view my transactions online until I receive the new card. To top it off, the new account is still being processed and the card has yet to be mailed! It’s expected in approximately 7 days. I’m going to be even more upset if the 2% cash back doesn’t get applied to my current balance still on the Schwab card.
I did some more research on the new Bank of America cash back cards and found more differences besides cash back percentages. The cash back from Bank of America can be redeemed with each $25 accumulated. Better than Citi, but not comparably at all to Schwab’s monthly deposit regardless of amount. Also, Schwab had a 0% foreign transaction fee. Bank of America is 3%!
Fortunately, I had just signed up for a Pentagon Federal Credit Union cash back card that gets 1% on everything and 5% on gas. I previously was just going to use it for gas. The great thing about this card is that, similar to the Schwab card, the cash back is available instantly. Rather than being deposited into checking, however, the cash back is used to pay down some of the balance, effectively the same thing. And, this card also has no foreign transaction fees. The closest cash back card, other than the Pentagon card, that I could quickly find is Capitol One Cash, offering 1.5% cash back (1% on everything plus 50% of annual cash back bonus at the end of the year).
All in all, it is frustrating that I found out that I was being switched to a different card (and losing all the great benefits) in the manner that I did. I really, really wish that Schwab had held on. Even dropping the 2% cash back to 1.5% or even 1% would have been better than this hassle.
Update: More info on loss of Schwab’s card. It also looks like the foreign transaction fees may be waived. And here’s a good NY Times article discussing possible replacements. Also looks like the 2% cash back ended on October 31st. Purchases after that date will reflect the 1% cash back.