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The Future of the Schwab Visa Cash Back Credit Card, Revisited

Written by Nickel - 19 Comments

The Future of the Schwab Visa Cash Back Credit Card

Not quite a year ago, I mentioned that Schwab would no longer be sponsoring their 2% cash back credit card.

That was the bad news. The good news was that cardholders continued receiving 2% cash back on all purchases as they transitioned the card over to FIA Card Services. In actuality, FIA had been servicing the card all along, but it was co-branded with Schwab.

Fast forward to now… I’ve heard from several readers (and seen elsewhere) that FIA has been notifying cardholders that this card will soon be re-branded (again) as a Bank of America rewards credit card. Details beyond that are scarce, but many are concerned that this will mean an end of the 2% rewards.

While that may well be true, it’s worth noting that FIA and BofA are essentially one and the same. Moreover, I’ve heard internet rumors of people having talked to FIA phone reps and being told that that 2% rewards would remain.

For now, I guess the best strategy is to wait and see. But if you have this card, be aware that changes are afoot.

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Published on September 2nd, 2011
Modified on September 5th, 2011 - 19 Comments
Filed under: Credit Cards

About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

19 Responses to “The Future of the Schwab Visa Cash Back Credit Card, Revisited”

1
Chucks Says:
September 3rd, 2011 at 8:23 pm
That’s a good tip. I have the card, haven’t heard anything yet. I think it’s only a matter of time until the rewards disappear, I think the card has been costing Schwab/FIA/whoever a good amount of money
2
Chris Says:
September 4th, 2011 at 1:13 pm
Disappointing indeed. Personally, I will not be using the BofA replacement cards. They have proven their incompetence enough times already. Its amazing that they are still in business. If you get food poisoning at a restaurant do you go back for more next week?
3
Eric Says:
September 5th, 2011 at 7:56 pm
I was actually reading through the comments on Fatwallet and it seems like people who have called FIA to ask have been told the rewards structure will be changed to a tiered system, essentially replacing the straight 2% cashback.

Customers are supposed to receive a follow up letter explaining the new system. I already received the first letter notifying of the change.
4
Anna Says:
September 5th, 2011 at 8:18 pm
Um, Chris, Bank of America owns FIA, so you’ve been using their card all along. All that is changing is the branding on your card (and b/c of the way credit card companies track things, that means your number will change, too).
5
TFB Says:
September 5th, 2011 at 11:30 pm
I have the card and I received a letter, which didn’t say anything about the reward structure changes. Credit card companies have been known to run experiments on their cardholders. They give randomly selected different groups of people different rewards and see how they behave. It’s likely the case for this card as well.

Until you receive the letter about the change, it’s all speculation right now. Rebranding by itself does not mean the rewards will change. FIA is Bank of America’s unbranded service arm. They use FIA for cards marketed by other financial service companies so B of A’s brand doesn’t compete with the marketing partner’s brand. Now that the card has lost its marketing partner, it’s understandable B of A wants its brand on it.

Wait and see indeed. With some luck, your rewards won’t change even when others’ degrade.
6
Chris Says:
September 6th, 2011 at 9:15 am
Thank you, Anna, for pointing out the irony in my statement. To be honest, the branding alone is enough for me not to wield the card. I guess I was lucky not to have to deal with customer service regarding my credit cards.
7
Bucky Says:
September 6th, 2011 at 4:02 pm
I didn’t know FIA was owned by BofA. Good to know.
8
AshATL Says:
September 8th, 2011 at 3:37 pm
I recently received a notice that the FIA/Schwab card would be serviced by BOA. I called BOA and asked the customer service rep about the rewards. He told me that they had just received an email that morning saying that the Scwab cards would be replaced by a BOA card and their reward system. He said info should be sent out soon, and we’ll automatically be placed in one rewards system unless we opt in to another. I’m anxious to hear all the details and see which option others are going with….
9
Tom Says:
September 11th, 2011 at 11:08 am
Received letter dated 8/29/2011 stating that 2% will end 10/31/2011. A new card will be issued that will earn 1% cash back on new retail purchases, 2% groceries and 3% gas. A $1500 quarterly cap applies to the groceries and gas. You can receive this via check or statement credit.
10
Janice Says:
September 13th, 2011 at 5:03 pm
In addition to the letter received by Tom, I received another letter today from B of A. They state that travel accident insurance will be reduced from $100,000,000 to $250,000; I.D. Theft Recovery will no longer be a benefit; and Price Protection will no longer be a benefit.

Suffice it to say, I will not be using this card.
11
mike Says:
September 14th, 2011 at 6:52 am
Just goes to prove how clueless B of A is. I would have rebranded the cards under ANY OTHER NAME due to the bad rep of B of A. I closed the account last week, couldn’t have something with a B of A logo in my wallet.
12
msf Says:
September 14th, 2011 at 8:18 pm
We also got a letter from BofA. Some more details:

– Our new rates are the same as Tom’s (#9 above), but if we deposit our cash back into a BofA account, they’ll give us an extra 10%. (It’s not clear whether this applies to the 2% and 3% rates, or just the 1% “base” rate.) In this sense, it is like Chase, that gives an extra 10% (for a total of 1.1%) if you have a checking account with them. But you don’t have to deposit the cash into a Chase account.

– They are offering an exchange to a different card, BofA “Privileges”. This is even closer to the Chase card – it gives 1% back, and 3% on select categories that rotate quarterly. But unlike Chase, BofA charges $75 annually for the card (waived the first year, or if you have $50K with BofA or Merril Lynch).

– “Terms and Conditions [aside from fees and cash back, I suppose] of your current credit card account, including any recent or future amendments, will apply to your new account.”

That last point is important to me, as I got the card because it had no foreign transaction fee (not even the 1% currency exchange fee that is tacked on by Visa to most cards outside of this one and Capital One). I verified by phone that at least as of now, there is still no foreign transaction fee on the card.

With just 1% back though, it is no longer better than the Fidelity Amex (which remains serviced by FIA) – this gives 2% back, but charges the 1% foreign exchange fee.
13
bill Says:
November 12th, 2011 at 1:10 pm
A bit concerning: during the transition period (which I am told is from now through some time in December), I have lost online account and statement information for my existing card, in spite of being enrolled in paperless billing for over a year now. They’ve agreed to send me some paper statements in the meantime.
14
msf Says:
November 13th, 2011 at 12:54 am
I discovered that problem (no online access) a week ago. Called FIAcardservices, they claimed that this was a bug that they were working on. Didn’t offer to provide paper statements.

The phone system still works, for whatever that’s worth; at least one can order paper statements that way. If I don’t receive a statement within another week, I’ll send them a complaint saying that they don’t get paid until they present me a bill in writing.
15
hugh Says:
November 17th, 2011 at 10:33 pm
I just (Nov 16) received the letter so many of you above received months ago notifying us that B of A waas taking over the FIA card and reducing cash reward from 2 to 1% on ordinary purchases. The letter is undated and, perhaps because it was presorted first class US mail, not postmarked. So i cannot establish when B of A might have sent it, but if it was indeed sent recently, the legality of changing contractual effective three weeks ago, before being informed,is of course questionable. Has anybody else experienced late notice as I have? And sorry to be turning into a wannabe sleuth, but does anyone know if it’s possible to decipher from the barcode on the outside of the envelope and other descriptive markings when the letter might have been sent? Thanks.
16
Jim Says:
December 17th, 2011 at 7:00 pm
I received the same letter as 10 Janice, but no other, and now see I didn’t get any cash back from my November purchases. My local credit union has a card that gives 1% cash back, so BOA has no chance to keep my business — I’d much rather give the business to a credit union than any bank that pays its CEO $10M/yr.
17
msf Says:
December 18th, 2011 at 2:03 pm
I believe that the November (and subsequent) purchases result in points appearing on your statement. Unless you specifically request it, redemptions of points into cash are no longer automatic.

It’s easy enough to do, but you may need to create an online BofA account, using your credit card number.

I find it amusing that BofA, in one of its mailings, described this as a simple bonus cash back card, with no hoops to jump through; yet to get an extra 10% back (e.g. if the cash back would be $5, one could get $5.50), one needs to create a BofA account (if one does not already have one), and then ensure that the cash back is deposited into that account. No hoops indeed.

I did that – I created an online checking account. Problem is, to get the cash out, I either have to pay $3 for an ACH transfer out, or pay for a checkbook to write myself a check, or get a debit card to pull money out of an ATM (only in $20 increments), or get them to set up online bill pay (which you can’t seem to set up online), and then use it to send myself a check which I then deposit in mu local CU. Tell me how BofA is cutting costs this way!
18
Jay Says:
December 26th, 2011 at 11:18 pm
This card blows! The stripped down rewards make it unworthy of recommending. Also it appears that redemptions can only occur in $25 increments! I’m sure a better overall card exists out there!
19
Jay Says:
December 26th, 2011 at 11:21 pm
In my follow-up to the above email…I did manage to find a pseudo loophole in order to get 2% back on the purchase. Since you can get 2% back at grocery stores, you could effectively purchase gift cards from a grocery store to places such as the gap or home depot. I mean its a way around it, but overall not as good as the unlimited 2% that the schwab card had offered!

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