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Starting 10/1/10 Schwab is ending sponsorship of both its credit cards but says "no terms will change", including Cash Back, deposits into Schwab accounts and no ATM fees.

When I login to Schwab.com there is a notice:
Important news about the Invest First and WorldPoints Rewards Visa

Starting October 1, 2010
- Schwab Bank will no longer sponsor these credit cards
- You can continue to use your cards as you normally would
- FIA Card Services will become the sole sponsor of the cards

Not that it matters, but for the curious I do have both the old Schwab card and the new 2% one.


More detail (pasted from site):
- On October 1, 2010, FIA Card Services, N.A. will become the sole sponsor of the credit cards, and will make all decisions regarding terms, conditions, and reward programs.
- You may continue to use your Schwab Bank Invest First Visa card or the Visa credit card with WorldPoints rewards subject to their contractual terms.
- There are no changes to your current terms, conditions, or reward programs. FIA Card Services will provide you with notice should any changes be made.
- This change does not affect the debit cards offered by Schwab for the Schwab Bank High Yield Investor Checking® account, the Schwab Bank High Yield Investor Savings® account, and the Schwab One® brokerage account.

We apologize for the inconvenience. Please review the questions and answers below. If you have any further questions, please call our specially trained service team at 800-785-7816.

Starting September 30, 2010, visit fiacardservices.com to access your account online.


Answers to frequently asked questions regarding the change in credit card sponsorship:

Q: Will my card continue to work?
A: Yes. You can continue to use your card for purchases, provided your account is open and in good standing.

Q: Will my current APR or reward program change?
A: FIA Card Services is making no changes to your current terms, conditions, or reward programs. FIA Card Services will provide you with notice if any changes should be made, and will explain these changes at a time and in a manner consistent with its commitment to providing clear information to its customers. Schwab will not participate in these changes in any way.

Q: Will my Invest First Cash Back rewards continue to be deposited into my Schwab One brokerage account?
A: FIA Card Services is making no changes to your current terms, conditions, or reward programs. FIA Card Services will provide you with notice if any changes should be made and will explain these changes at a time and in a manner consistent with its commitment to providing clear information to its customers. Schwab will not participate in these changes in any way.

Q: Will I still be able to view my credit card account information through Schwab.com?
A: Starting September 30, 2010, Schwab will no longer display information about your credit card account on Schwab.com, and will not have any information related to your credit card account. You’ll be able to access your credit card account information online at fiacardservices.com .
To access your account information, please follow the instructions below:
Go to fiacardservices.com .
If you know your fiacardservices.com login name and password that you set up initially when you were issued your card, then enter it and you will have immediate access to your account.
If you do not recall your login name and/or password, then simply click on the link, “Forgot your Login Name or Password?” and you will be guided through some simple steps to get you on your way to viewing your account information.

Q: What if I have questions about my credit card account?
A: For service-related questions about your credit card account, you can continue to call the customer service phone number on the back of your card or on your statements, which is 866-724-9224. You’ll also be able to access your credit card account information online at fiacardservices.com .
To access your account information, please follow the instructions below:
Go to fiacardservices.com .
If you know your fiacardservices.com login name and password that you set up initially when you were issued your card, then enter it and you will have immediate access to your account.
If you do not recall your login name and/or password, then simply click on the link, “Forgot your Login Name or Password?” and you will be guided through some simple steps to get you on your way to viewing your account information.

Q: Will the way I pay my credit card bill change?
A: No. If you are currently making your credit card payments by mail, online bill pay, or automatic monthly payments, you do not need to update your payment method. If any changes need to be made, FIA Card Services will make that determination and communicate directly with you.

Q: Will there be any changes to my Schwab One brokerage account that is linked to my Invest First credit card?
A: There will be no changes to your Schwab One brokerage account as a result of this sponsorship change. You will continue to enjoy no account balance minimums on your Schwab One brokerage account.

FIA Card Services will provide you with notice if any changes will be made to the reward program, and will explain these changes at a time and in a manner consistent with its commitment to providing clear information to its customers.
Schwab will not participate in these changes in any way.

Q: Will there be any changes to my debit cards?
A: No. This change does not affect the debit cards offered by Schwab for the Schwab Bank High Yield Investor Checking account, the Schwab Bank High Yield Investor Savings account, and the Schwab One brokerage account. Clients will continue to enjoy no ATM fees.

Member Summary
Most Recent Posts
When I called them they said they are not sure what will be the terms and conditions, it has not been decided at this po... (more)

uspeed (Sep. 06, 2011 @ 11:28a) |

The across-the-board 2% CashBack bonus will certainly be history before the year's out - everybody deal with it already.... (more)

ipickuppennies (Sep. 06, 2011 @ 3:11p) |

Guys, there's a reason why someone a few posts above told you this is already being discussed in another thread!

There's ... (more)

sfchris (Sep. 06, 2011 @ 3:40p) |

Starting September 30, 2010, visit fiacardservices.com to access your account online.

Official announcement page: http://www.schwab.com/public/schwab/nn/m/q310/cc.html?cmsid=P-3778947&lvl1=nn&lvl2=m

New York Times article referencing this discussion.
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Sounds like it's only a matter of time until FIA makes changes.

Thanks for the heads-up. This is my primary card, so I'm going to keep an eye out for something similar to be ready to replace it.

This may explain why we all got new cards with new numbers.

jameshasty said: This may explain why we all got new cards with new numbers.
New numbers - makes sense, but the card still says 'charles schwab bank' on it.

You guys have any suggestions for a replacement credit card other than the Fidelity credit card?

Go for another 2% Cash Back card, either HSBC orchard card or Household card !!

Though I am more concern with foreign transaction fee!! Currently there is no fee with Charles Schwab card .

I'm scared... Someone hold me.

BofA dosent give much away and what it does often involves a fight, and endless calls/emails/letters. what a shame, in the end it will sully schwabs brand

Sucks...

At least the checking and savings ATM card features remain the same. Bye bye 2%...

I wonder if Fidelity will follow suit?

thised1 said: New numbers - makes sense, but the card still says 'charles schwab bank' on it.

It's only a matter of time.

OP: I dont see this notice when I login. Where exactly is this provided?

Do others with Invest First card get this message upon login?

Found this webpage with the info:
http://www.schwab.com/public/schwab/nn/m/q310/cc.html

uutxs said: Do others with Invest First card get this message upon login?
I didn't see it either....

AmsterDave said: uutxs said: Do others with Invest First card get this message upon login?
I didn't see it either....


Ditto.

One cannot but fear that FIA found this card unprofitable and wanted to make changes that Schwab did not want to take the heat for (i.e. having induced people to open accounts with the promise of a card with certain very desirable features and then discontinuing these features. Hence the emphasis on FIA being reasonable for any terms changes and not Schwab. They say several times:"Schwab will not participate in these changes in any way."

I would like to think Schwab tried to keep FIA from making changes but lost, although these changes may have been merely to continue high level of customer service. I was told a while ago by Schwab customer service people that Schwab had become unhappy with the level of customer service being provided by FIA and was looking at alternatives.

I suspect that Schwab anticipated finding someone who wanted to continue the current terms, but failed. This would explain the issuance of new cards with new numbers.

One change that is coming is the discontinuance of the ability to use the old MBNA bill pay to pay bills using a credit card, notably the Schwab card, although the ability to use other FIA credit cards (such as the Fidelity one) is also to disappear. This is discussed on a separate thread on the old MBNA Bill pay.

A separate thread discusses a new BOA card that apparently can pay 2.5% back. While these appears now to be available only to certain people who have received invitations, its existence seems to indicate BOA believes a card with a high reward rate can be profitable. Thus, they may continue the present card in near the present form since they have customers already acquired, and the worse credit risks in this group have probably already defaulted.

Incidentally, with the disappearance of the ability to pay bills with the old MBNA credit card, the older Schwab cards (that have basically a 1% reward structure) become less valuable. I at least had been using the ones I have only as a way to pay bills (with the closing dates spread out throughout the month, I can usually gain a month and a half use of funds by picking the right card. I may take the risk at some points of asking them to move the credit lines to the 2% card (such reallocations are possible, but do involve their credit department reevaluating their exposure to you).

ProfessorEd said:
I suspect that Schwab anticipated finding someone who wanted to continue the current terms, but failed. This would explain the issuance of new cards with new numbers.


Schwab changed the numbers due to the VISA Number restructuring. I received new card numbers from Schwab, Citibank, and Bank of America. The first four digits changed to match the new numbering system that has been put in place.

Here's the actual link

It seems Schwab was losing money on the card.

From Reuters:

"Third-quarter earnings will include about $130 million in pretax charges for covering losses recognized by Schwab money market mutual funds that had invested in a structured investment vehicle that defaulted in 2008. Schwab also posted $20 million of charges from two credit card programs to be discontinued amid "challenging card industry economics."

http://www.reuters.com/article/idCNN1514786920100915?rpc=44

I was considering doing more of my financial business at Schwab, but now I'm glad I never did more than set up brokerage and checking to handle rewards from this credit card. I'm sticking with Fidelity, thank you very much.

This action makes potential customers like me wonder, why should I go with Schwab if a few years (months?) from now they decide to significantly drop/change a financial product/service?

I assume they still want to attract customers to the banking side of their business, but how many banks do not offer a credit card?

ProfessorEd said: I suspect that Schwab anticipated finding someone who wanted to continue the current terms, but failed. This would explain the issuance of new cards with new numbers.
You are correct. I was told that Schwab had found a new provider; issued cards in anticipation of migrating their customers, but the new provider pulled out of the deal and Schwab was not able to find another provider.

Knowing that Schwab was losing money on this card (and their brokerage/banking business probably benefited from having it), I am less optimistic that it will continue without some changes intended to increase the profitability (which implies worse benefits for us customers). A was pointed out, with BOA owning Merrill, a change in the rewards program so that the rewards are not deposited into a Schwab brokerage account seems likely.

Until we know what these changes are, the most that can be done is for those that value a certain feature to start looking for a card that has it.

For instance, one who travels overseas a lot may want to keep an eye out for a good card with low foreign exchange charges. However, there will probably be enough notice to apply for and get the desired card before that feature disappears from the Schwab card.

This sucks a fat ding dong

I understand people are concerned. I fail to see the need for baseless speculation. Nothing you can do. No contingency plans you can implement. Just wait to hear the outcome

Otherwise this thread will become just like the Chase Rewards thread where Craig has been posting for years (literally) that the rewards and the world is ending. He's been wrong of course - but even if he was right.what's the point of all this hand wringing?

ellory said: Just wait to hear the outcome...
I agree completely, and I am certainly not wringing my hands over this. Deals come and go.

What is interesting about this, though, is this is the first time I can think of where a major name bank/financial services provider basically says, we are ending our credit card business. It is telling its customers, thanks for getting our credit card but we are dropping it completely, so bye bye -- with two weeks notice.

What usually happens is that the bank stops offering the card and comes up with alternatives that they try to sell to us, at least sugar coating the change in terms, telling us how much better the new terms and rewards will be, etc.

You would think Schwab would at least have said something like, look for our new card, soon to be announced! or something like that. My earlier point is that the abrupt way they've ended this does not inspire confidence in their financial planning and management.

kwest said: Sounds like it's only a matter of time until FIA makes changes.

Dont forget what FIA stands for: F'd in the A

I've been worried how long a card this good can last. Got the Fidelity reserve as a go to backup if they start toying with terms.

ellory said: I understand people are concerned. I fail to see the need for baseless speculation. Nothing you can do. No contingency plans you can implement. Just wait to hear the outcome



Yeah but - we knew changes were going to come though it's not good to only give 2 weeks notice and say, "go to a different website for info....anything that happens isn't our responsibility." I think it's more surprising b/c they had great customer service and they just drop the program and customers so quickly.

"Welcome to WorldPoints ..."

I think its no coincidence BofA launched a 2% CashBack card... and since everyone is guessing, Im guessing 2% schwab cardholders will be migrated to the new 2% Bankamericard.

SUCKISSTAPLES said: I think its no coincidence BofA launched a 2% CashBack card... and since everyone is guessing, Im guessing profitable 2% schwab cardholders will be migrated to the new 2% Bankamericard.

fixed that for ya

I hate Alan Greenspan. Somehow, this is all his fault.

What's the incentive for FIA to keep it at 2% if Schwab is completely out of covering the cost, and everyone else is giving only 1%?

jburger said: What's the incentive for FIA to keep it at 2% if Schwab is completely out of covering the cost, and everyone else is giving only 1%?
They have very little incentive. They will lose a lot of customers that don't carry a balance and don't pay any annual fees. I'm confident that they will change the card soon.

One of the best things about this card is how it paid out the 2% every month. I've had other cards that give Cash Back but I either had to wait 'til the end of the year or until I built up enough points to redeem it. I'm fearful that they will make the Cash Back harder to redeem.

Does this mean that you will pay fees when using the card and withdraw cash while traveling abroad??

ellory said: I understand people are concerned. I fail to see the need for baseless speculation. Nothing you can do. No contingency plans you can implement.
I don't know about you, but I'm considering applying for Fidelity/FIA's 2% Cash Back AMEX as a back-up. Not as good as Schwab Visa but the best publicly available alternative.

Anyone else also considering this course of action?

Looks like 2% will be gone soon too.

Hopefully Fidelity won't match, just like OD matched Staples' lower ink recycle reward.

Skipping 297 Messages...
Guys, there's a reason why someone a few posts above told you this is already being discussed in another thread!

There's already ten pages devoted to this topic on this thread:

http://www.fatwallet.com/forums/finance/883571/?start=3040



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