Review of the Schwab Credit Card

Last Reviewed: 7/26/2010

Important note: Around 3/31/10 Schwab stopped offering this card for new applicants (though current users of the card are grand-fathered in for the time-being). RIP Schwab.

If you’re in the market for a strong cash back card, I’d recommend you check out our review of the Amex Blue Cash Preferred Card, a very strong rewards card.

The Schwab Credit Card (officially known as the Schwab Invest First Visa) is truly one of the gems of the cash back credit card world—an all-purpose workhorse offering a no-holds-barred 2% cashback. It’s also one of the simplest credit cards to understand—there are no fancy rotating categories, sneaky cash back limits, points expiration games or other redemption tricks.

Note—there have been some persistent rumors that Schwab may pull the plug on the Schwab credit card and just grandfather in those who already have it. GetDebit will do some more digging on this, but in the meantime, you may want to consider getting it just to be on the safe side.

How Does The Schwab Credit Card Stack Up Against The Competition
Rank 2 (out of 33 cashback cards tracked by GetDebit
Value of rewards* $1,440
Value of rewards for top cash-back card $1,466

*Based on GetDebit’s standard spending profile for 3 years of card usage

As the table above shows, the Schwab credit card places 2nd out of the 33 cards that GetDebit currently has in its ranking engine (as of 7/17/2010). The only cashback card that beats it is the Discover Escape card, and then, just by a hair. For all intents and purposes, they offer the same upside.

Below is a screenshot of the GetDebit ranking engine, where you can see that the Schwab Credit Card places a very respectable 2nd place finish.

Schwab Credit Card Rewards

The Schwab credit card provides a 2% cashback bonus on *all* purchases—no exceptions, no limits, no gimmicks. The only requirement is that you also open up a Schwab One brokerage account, although you don’t need to fund it and there are no annual or other fees associated with it (in other words, it’s free).

Your cashback earnings are regularly swept into your brokerage account (see the screenshot below), at which point you can easily transfer the funds to your Schwab credit card. This structure is an obvious attempt to drive new account creation within their brokerage arm, and perhaps it is working for some percent of users who get the Schwab credit card.

Schwab Credit Card Expenses and Fees

The Schwab credit card has no annual fee. Furthermore, and worth noting, the Schwab credit card does not charge a foreign currency transaction fee. This is very unusual—most credit cards charge a 3% conversion fee. This is a great card if you plan to travel outside of the US!

GetDebit’s Final Assessment of the Schwab Credit Card

The Schwab credit card is a true workhorse. If you could only have 1 credit card in your wallet—this might be the one. In general, GetDebit would recommend using this card for all purchases where you don’t earn special rewards with a more specific credit card. For example, the Chase Freedom card earns you 5% cashback on very specific categories each quarter—so you should obviously use that first when appropriate.

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