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Starting in October, Schwab Invest First Visa credit cardholders should keep an eye out for mailings or other announcements about changes to their terms and conditions.
The Schwab Visa has been one of the most popular credit cards around for years. The card pays a flat 2% cash back on all purchases, deposited directly into a Schwab brokerage account each month. It’s a lucrative rewards program that couldn’t be any simpler.
Back in April, Schwab discontinued the credit card for new applicants, but current cardholders were grandfathered in and able to keep their rewards programs intact. Unfortunately, that may about to change.
Schwab has started telling customers that on October 1, 2010 they will be relinquishing their sponsorship of the card, giving full control to FIA Card Services. As of this writing, they are emphatic that no changes to the terms have been announced. The only real change is that Schwab credit cardholders will have to go to FIACardServices.com to check their balances and pay their bills, rather than doing so through Schwab.com. But I don’t expect these terms to stay unchanged for long.
The 2% reward rate was largely a marketing expense for Schwab, since they were able to recoup costs through commissions and other costs associated with their brokerage accounts. FIA doesn’t have that luxury, so it will be interesting to see how long they keep the rewards program intact.
Don’t despair, other 2% cards are out there
In case you get a notice in the mail soon that your rewards are being scaled back, keep these cards in the back of your mind: