Will New Owners Reduce The Schwab Visa Card's 2% Cashback?

Popular cashback choice Schwab 2% Visa card is getting taken over by FIA card services September 30th, and customers fret that the new owners will kick the rewards down to 1%.

In April the card stopped taking new applicants because most of its members weren’t carrying a balance. Without a balance, there’s no interest charges, and Schwab wasn’t making any money.

Despair not, there are a few other cards still out there that offer 2% cashback, either in the form of miles, or in certain purchase categories.

Schwab Visa Down for the Count? [Free Money Finance]

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Charles Schwab Stops Offering 2 Percent Credit Cards [NYT]

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  1. hills says:

    “cashback… in the form of miles” isn’t really cash back, now is it? Anyway, the Schwab card sounds good – wish I had one…

    • Tongsy says:

      In a way, it is. My card gives me the equivalent of 2% cash back in the form of miles, or I can use those miles to buy overpriced goods. It’s more worthwhile to get the cash, or a gift card (the gift cards are actually worth a little more, but you’re locked in to one store)

  2. Loias supports harsher punishments against corporations says:

    Costco American Express offers 1-6% depending on the purchase. 3% on food and groceries I think.

  3. MaxH42 thinks RecordStoreToughGuy got a raw deal says:

    “Without a balance, there’s no interest charges, and Schwab wasn’t making any money.”

    What about merchant fees? I thought that was how credit card issuers made their money off of cardholders who pay their balance off every month.

  4. ecwis says:

    The card was always run by FIA Card Services. However, Schwab is ending their affilliation with the card.

    • webweazel says:

      This happened to me. Our bank, Hancock, offered us to open a card with them years back. We did. A few years after, it became FIA/Hancock. Then became FIA. The Hancock name just vanished. The last card I received from them is just a silver card. No picture, name, nothing on the front of it, just a blank silver panel. It looks fake. I called them and asked about it, and they said “We service a lot of company’s cards, and we stopped putting their names on it to avoid multiple printings.” Okay. So I got out my trusty labelmaker and stuck the name on it. Now it REALLY looks fake/cloned and I won’t use it at a physical store anymore, just online where no one will see it.

  5. nocturnal99 says:

    I’ve had this card of a year and the letter informing me of this made my heart skip a beat. Spent 3 weeks in Spain this year and zero foreign transaction fees. 2% back in cash (I’ve worked it out, and miles on my Continental card aren’t anywhere as good), and you get it back *every month*. It was the most wonderful card ever created. I shed a tear for the space it’s occupying in my wallet over the next month.

    I hope my Schwab Checking and Savings sticks around. ATM withdrawal reimbursements. It’s why I haven’t bothered with a credit union.

    • Sudonum says:

      I also shed a tear when I received the notice for my Schwab card. Similar to the tear I shed when I got the letter telling me that my AMEX platinum card wouldn’t get me into the Continental Presidents Clubs starting sometime next year. I’m hoping that it’s due to the merger and the Presidents Clubs will be rebranded as United.

  6. brinkman says:

    What I found even better than 2% cash back was that this card didn’t charge a fee for international transactions. That alone saved me over $50/month.

  7. fredbiscotti says:

    I have this card, and the monthly cash back is great. I’m not surprised that most customers aren’t carrying a balance, though. using the Schwab Sweep account as your primary bank seems like it’s for the pretty advanced Consumerist.

    That said, the customer service on the card has been horrifying – it’s a separate contractor from Schwab (which has AMAZING service. In the meantime, I’m waiting to see what will become of this card. I’m looking to take a mortgage soon, so I’m reluctant to switch cards until after I close on the property.

    • fredbiscotti says:

      Which is to say that the kind of people who charge $5000 a month and have a brokerage account… probably with a couple hundred thousand in cash and securities. That’s not the kind of person that’s really going to carry a balance on a month-to-month basis.

  8. hmburgers says:

    My Fidelity branded Visa from FIA gives 1.5% cash back (into a Fidelity account) and there is a Fidelity branded AMEX, also FIA, that gives 2.0% cash back (again, into Fidelity account).

    • basalganglia says:

      yep, i wouldn’t worry about losing the 2%. I have the Fidelity FIA Amex card that gives back 2%. Don’t know why this card doesn’t get any press. There is no annual fee, you just have to have a Fidelity account for the money to be sent to. http://bit.ly/8YKFcR

  9. georgi55 says:

    I just hope I don’t lose the Shop Safe feature where you can crate a new credit card number with specific expiration and usage limits to shop with online. I don’t care for sites like newegg, but for skype, random VOIP providers, etc, I’d never want to give out my real number.

    Does anyone know if we’d be moved to crappy FIA’s website that is useless and doesn’t have Shop Safe or ability to display pending transactions?

  10. chimpski says:

    NOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO!!

    /vader voice

  11. NeverLetMeDown says:

    I doubt it will drop. FIA (which is actually Bank of America) has always run the Schwab card, it’s just that Schwab is no longer going to pay to put their name on it. BoA also runs the Fidelity 2% cash back Amex (which I use, great card), and has started sending out invites for their own, BoA-branded, 2% cash back card. So, I think we’re still going to keep the 2% cash back.

  12. chimpski says:

    So what are some alternatives? Any tips?

  13. Lprd says:

    I really hope they leave it alone. Schwab is a fantastic bank and that card with their checking account is the perfect combination. I use my Schwab card for nearly everything. When I got that letter I felt really bummed. FIA which I believe is a B of A subsidiary is thoroughly meh.

  14. cmdr.sass says:

    Let’s stop perpetuating the myth that credit card users who don’t carry a balance are deadbeats in the eyes of the credit card company. They still make money on the merchant fees.

  15. dolemite says:

    FIA took over my Suntrust card about 2 years ago. And the rewards suck. I get some kind of “world points” that you can use to purchase things. Problem is, a world point seems to be worth a penny, so I’d need to spend like 10,000 a year to get anything worthwhile.

  16. SteveinOhio says:

    Well that’s terrible news. This is my primary card, I love getting the 2% back every month, and I don’t carry a balance. Sounds like I’m exactly who they’re sick of.

    • George4478 says:

      I’m in the same boat as you. I got my letter from Schwab yesterday. I really like this card; I hope they don’t change it but I’ll drop them like a hot potato if I have to……

    • Ed says:

      Yup. Looks like I’ll be checking out some other card. Too bad. This was a nice card.

  17. 310Drew says:

    This card was always managed by FIA Card Services….. formerly known as MBNA, which was bought by Bank of America and they changed the name to FIA.

  18. areaman says:

    This is the only credit card I carry and use. If the rewards go away I’ll feel bad. And at the same time I am freeloading/taking advantage of trickle up.

    I ll keep it as long as they don’t charge for international transactions. But it’s going from my wallet to my card parking lot with my Sony Visa, Citi Business MC, Borders card, library card, old student ID, etc

  19. wootbot says:

    I’ve already started to transition away from it because I don’t like the prospect of being with FIA / BofA without having Schwab watch my back. I plan on canceling.

    My choice for a new main card is Capital One’s Venture, which has been a top pick in several magazines. There are 2 flavors: a blue version which pays higher rewards but has an annual fee and a gold version (which I chose) which has no fee. Both are worth checking out if you have good credit. Neither has any foreign currency fees. Their website and customer service have been great, and redeeming points for travel (which is the best deal) can be done after the fact – in other words, buy wherever and just select the travel items on-line from your statement if you want to pay for them with points (miles).

  20. makabe says:

    The card formerly known as Schwab is still paying 2%, at least until FIA Card Services changes the program. My October dividend (from the September statement) just posted, and the FIA website is still tallying points for current charges. Furthermore, on FIA’s website, you can now have the 2% go directly to a deposit account at a bank–not just a brokerage account. Who knows, this card might live afterall.