Old Dec 9, 08, 9:10 pm
Original Member
Join Date: May 1998
Posts: 2,409
Conversations with Schwab

Today I visited my Schwab office. I asked
  • Most brokers object to a brokerage account being used solely as a bank account. But the Schwab bank account and credit card offers seem to indicate otherwise. Will Schwab object if I use the credit card but never do a transaction in the brokerage account. Answer: Schwab won't mind, but the S.E.C. requires at least one trade a year to keep the account open. For infrequent traders the commission for a trade is $12.95 for the first 1,000 shares, plus $0.015 for each additional share.
  • Is the 2% rebate taxable? The rep typed on his computer for awhile and then said yes, that is what he is being told. He did not say who told him this, let alone the qualifications of that person to know. I asked to speak to someone who would know for sure.
  • He gave me a phone number to call and a phone to use to call it. The number was for the Schwab brokerage company tax people, who knew nothing about the credit card. They told me to call the Schwab Bank, a separate but related company.
  • I called the number for the bank that I found on the application handed to me at the local office - (877) 226-8964. I was told that definitely the rebate is not taxable. I said that we have a tie between definitely yes and definitely no. I asked if this person worked for the bank. No, he worked for both companies. I asked to talk to someone at the bank credit card division.
  • I was connected with the bank. After I chose the appropriate option, I was put on hold for a few minutes, then disconnected.
  • I called back to the previous number. I was connected with a different rep, who said he did not know if the rebate was taxable. He also did not work specifically for the bank. I asked for the correct number of the credit card department of the bank. I was given (866) 724-9220. He then transferred me to the bank. Again I was put on hold and disconnected.
  • So I called the number directly. Ta Da! Option 1 is specifically for the Schwab Bank Invest First Visa Signature Credit Card. Alas, the rep with whom I was connected didn't know if the rebate was taxable. But she put me on hold for about 10 minutes, and returned saying she spoke with all of her supervisors, and the consensus was no, the rebate is not taxable, but no one was absolutely sure of this.
  • I explained to the rep the one trade for a year rule. I asked if the points on the credit card expire or accumulate, as I would like to be able to wait one year and 11 months to do a trade, rather than one year. She understood, but asked a supervisor again. The points expire in 5 years. Until then they accumulate and can be transferred as cash whenever I open a Schwab brokerage account.

I really don't need the checking account. I already have debit cards (Bank of Internet and American Bank) that refund ATM fees of foreign banks, and the Bank of Internet account pays much higher interest. And the Schwab commission schedule is much more expensive than that of my current TD Ameritrade account, as my trades are usually much larger than 1,000 shares. So I plan to get the credit card and accumulate points for awhile before opening a Schwab brokerage account to cash them in.
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