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Schwab 2% Cash Back Credit Card

Schwab is ending their cash back card for new applicants. See our list of best cash rewards credit cards [1] to find another card with great cash back.

I love cash back credit cards [1]. If you pay in full every month, it’s a great reward. I’ve been shopping credit cards lately, and found the Schwab Bank Invest First card [2] is a very appealing cash back card. It offers 2% cash back on everything. It’s our Free Money [3] Friday deal of the week!

Update: Schwab won’t be taking applications for this credit card after March 2010. You can still open an account using this Schwab link [4].

Update September 2011: We just received a letter that our Schwab card is being replaced by a Bank of America card. It looks like the end of the Schwab card is near. We plan to switch most of our purchases to the American Express 6% Cash Back Credit Card [5].

How to Get Your 2% Cash Back

  1. Open a new Schwab Bank Invest First card [2] and a Schwab One Brokerage Account [6].
  2. Once approved for both accounts, link them together. You can call or go online to link them.
  3. Cash back will be credited to your brokerage account monthly.
  4. Invest the proceeds, or access your cash back by check or debit card.

Credit Card Details

  • No annual fee.
  • 2% cash back on everything, with no cap.
  • Card is issued by FIA, which is part of Bank of America.

Brokerage Account Details

Brokerage Minimum. When you open the Schwab credit card (or a high yield investor checking [7]), there is no minimum on the brokerage account. Otherwise the minimum is $1,000.

Fees. There are no monthly fees for the brokerage account.

Accessing Cash. According to Schwab, you can “Access your money easily with fee-free checking, a Visa check card, online bill pay and fund transfers.” I plan to move my money directly to our checking account with Schwab, which is our primary checking account.

Action Plan

Even though we have an old 2% cash back credit card that deposits into our 529 plan, I’m planning to apply for this card. It’s always good to have a back up with the rapidly changing credit card environment.

In addition, it’ll be a nice way to transfer money since we already have our checking account at Schwab, and a portion of my Roth IRA since they announced the lower expense ratios [8].

Here are even more cash back credit cards [1] for you to check out.