May 4, 2016, 7:42 am
Last edit by: goodeats21
After being announced in early 2015, the long rumored Schwab American Express were available for application on March 21, 2016. Both cards require you to have an eligible Schwab brokerage account in order to apply. From the Schwab website:
Update June 2018 on eligible Schwab account per the Schwab website:
Note that if you are not currently a Schwab Customer, you can still get these cards by opening the Schwab Brokerage Account. To do so, a hard pull is required and most report that pull is with Equifax. There is a $1000 minimum investment to open the brokerage account, but if you open a linked high-yield investor checking account with the brokerage account, the balance requirements are waived.
Schwab Investor Card
This is card is basically a straight 1.5% cashback back card where you cash back can be deposited straight into your Schwab Brokerage Account. You can then choose to either invest money or transfer the cash to another account.
Schwab Platinum Card
This has all the benefits of the standard American Express Platinum Card with two notable advantages:
Link to Charles Schwab card information. Scroll down to read FAQ or to apply:
http://www.schwab.com/public/schwab/...s/credit_cards
An eligible brokerage account means a Schwab One® Account or Schwab General Brokerage Account held in your name or in the name of a revocable living trust where you are the grantor and trustee. Eligibility is subject to change.
An eligible account means (1) a Schwab One® or Schwab General Brokerage Account held in your name or in the name of a revocable living trust where you are the grantor and trustee or (2) a Schwab Traditional, Roth or Rollover IRA that is not managed by an independent investment advisor pursuant to a direct contractual relationship between you and such independent advisor. Eligibility is subject to change.
Schwab Investor Card
This is card is basically a straight 1.5% cashback back card where you cash back can be deposited straight into your Schwab Brokerage Account. You can then choose to either invest money or transfer the cash to another account.
Schwab Platinum Card
This has all the benefits of the standard American Express Platinum Card with two notable advantages:
- You have the ability to cash out membership rewards at a rate of 1.10 cpp [changed from initial 1.25 at inception] into the brokerage account. This is called "Invest with Rewards". There is a separate thread debating the advantages and disadvantages of doing this. You can invest the cash or transfer out of Schwab.
- There is an appreciation bonus in the form of a statement credit if you have significant assets with Schwab (essentially a discount on the annual fee). If you have $250k-$1M, you get a $100 statement credit. If you have $1M+ you get a $200 statement credit. More details are here: http://www.schwab.com/public/schwab/...r_faq_platinum
Link to Charles Schwab card information. Scroll down to read FAQ or to apply:
http://www.schwab.com/public/schwab/...s/credit_cards
American Express to Partner with Schwab. Applications online 3.21.2016.
Oct 27, 2017, 1:50 pm
#196
Join Date: Jun 2014
Location: PSC
Programs: Hilton Diamond/IHG Platinum/DL Plutononium
Posts: 1,728
Nov 1, 2017, 9:38 am
#198
Join Date: Aug 2007
Location: Truth or Consequences, NM
Programs: HH Diamond, Marriott Titanium, Hertz President's Circle, UA Silver, Mobile Passport Unobtanium
Posts: 6,192
If you don't want to pay double fees in any given year, then wait until it's almost time for your personal Plat annual fee to post before you apply for the Schwab. Then, once you're approved for the Schwab, get rid of the personal Plat at your anniversary date.
Dec 11, 2017, 8:24 am
#200
Join Date: Oct 2015
Programs: HH Dia, Marriott Titanium, AA Gold, UA Silver
Posts: 192
Question: Is the $100/$250 bonus credit for a certain amount w/Schwab only given at renewal? Not at account opening?
I called to ask about it & that's what I was told--I've never received any bonus (account opened this May 2017), & I met the Schwab amount criteria--is it automatic? Or do I have to call in?
I called to ask about it & that's what I was told--I've never received any bonus (account opened this May 2017), & I met the Schwab amount criteria--is it automatic? Or do I have to call in?
Dec 11, 2017, 8:47 am
#201
Join Date: Jan 2016
Location: LAX/JFK/SFO
Programs: Amex Plat, Hyatt, IHG cards
Posts: 120
Question: Is the $100/$250 bonus credit for a certain amount w/Schwab only given at renewal? Not at account opening?
I called to ask about it & that's what I was told--I've never received any bonus (account opened this May 2017), & I met the Schwab amount criteria--is it automatic? Or do I have to call in?
I called to ask about it & that's what I was told--I've never received any bonus (account opened this May 2017), & I met the Schwab amount criteria--is it automatic? Or do I have to call in?
My first-year credit posted as "Schwab Appreciation Bonus" automatically four days after approval.
Dec 13, 2017, 3:56 pm
#202
Join Date: Oct 2014
Posts: 103
Hoping that someone here has some insight into a weird situation I've noticed related to "Invest with Rewards" through the Schwab Platinum card, specifically related to MR contributions into a traditional IRA account.
I searched through this thread and other places online, but I haven't been able to find any definitive answers to my questions:
1. Do these MR -> Schwab "Invest With Rewards" contributions into a Schwab Traditional IRA (tIRA) count toward my annual contribution limit of $5,500?
2. Assuming my MAGI is below the deduction phase-out threshold for tIRA contributions, will the MR->Schwab "Invest with Rewards" contributions into a Schwab tIRA lower my taxable income by the equivalent amount invested into the tIRA?
I have some concerns and reason to believe that the answer to (at least) #1 above is "No":
Since receiving the Schwab Plat card in November 2017, I've invested 215,000 MR into my Schwab tIRA account, and my Schwab account correctly shows that I've "deposited" (their term) $2,687.50 YTD from my AmEx account.
However, the Schwab website simultaneously shows that my current YTD IRA contributions for the 2017 tax year is only $676, which is the amount of cash deposits I've made into the IRA since opening it earlier this year. It appears that the MR deposits are NOT being counted as contributions to the IRA, and are NOT affecting the $5,500 contribution limit.
A large part of my strategy with the Invest with Rewards feature of the Schwab card was to fully fund my tIRA with MR points @ 1.25 CPP, and also to reap the tax benefits of 1) Maxing my tIRA for 2017, and 2) Reducing my taxable income by the amount of my 2017 contributions (my MAGI puts me below the deduction phase out threshold). Now I'm concerned that Schwab isn't counting these MR contributions as true IRA contributions, and that I won't see the tax benefit that I intended.
Thanks for any insight into this.
I searched through this thread and other places online, but I haven't been able to find any definitive answers to my questions:
1. Do these MR -> Schwab "Invest With Rewards" contributions into a Schwab Traditional IRA (tIRA) count toward my annual contribution limit of $5,500?
2. Assuming my MAGI is below the deduction phase-out threshold for tIRA contributions, will the MR->Schwab "Invest with Rewards" contributions into a Schwab tIRA lower my taxable income by the equivalent amount invested into the tIRA?
I have some concerns and reason to believe that the answer to (at least) #1 above is "No":
Since receiving the Schwab Plat card in November 2017, I've invested 215,000 MR into my Schwab tIRA account, and my Schwab account correctly shows that I've "deposited" (their term) $2,687.50 YTD from my AmEx account.
However, the Schwab website simultaneously shows that my current YTD IRA contributions for the 2017 tax year is only $676, which is the amount of cash deposits I've made into the IRA since opening it earlier this year. It appears that the MR deposits are NOT being counted as contributions to the IRA, and are NOT affecting the $5,500 contribution limit.
A large part of my strategy with the Invest with Rewards feature of the Schwab card was to fully fund my tIRA with MR points @ 1.25 CPP, and also to reap the tax benefits of 1) Maxing my tIRA for 2017, and 2) Reducing my taxable income by the amount of my 2017 contributions (my MAGI puts me below the deduction phase out threshold). Now I'm concerned that Schwab isn't counting these MR contributions as true IRA contributions, and that I won't see the tax benefit that I intended.
Thanks for any insight into this.
Dec 13, 2017, 8:52 pm
#203
Join Date: Sep 2007
Location: stl
Programs: AA LT Plat/8.1mm now with 1350 miles left in my account and proud of it.. SPG LT Titanium.
Posts: 3,080
You are in a pretty technical area. My thoughts are that you shouldn't worry about Schwab as much as the Irs at to what counts towards the $5500 limit. If their software doesn't count it but your balance increases due to contributions in that year up to $5500 as a result of the MR points than that money should count towards your limit.
Last edited by abk; Dec 13, 2017 at 8:59 pm
Dec 14, 2017, 6:34 am
#204
Join Date: Aug 2015
Posts: 31
Like abk says, it is an IRS decision, not a decision by Schwab. There should be no difference between Amex -> (Schwab) taxable -> IRA, and Amex -> IRA. The IRS sees credit card points as "rebates" and treats them the same as coupons, so they are "worthless" to them. So you can take your rebate which is tax free to a taxable account, and then choose to do what you want with it. Since it is fungible, question #2 is irrelevant. Basically, you found a quirk of the schwab website, and while it may look okay to you and Schwab, the IRS will disagree.
Dec 14, 2017, 10:47 am
#205
Join Date: Oct 2010
Location: DFW
Posts: 684
A large part of my strategy with the Invest with Rewards feature of the Schwab card was to fully fund my tIRA with MR points @ 1.25 CPP, and also to reap the tax benefits of 1) Maxing my tIRA for 2017, and 2) Reducing my taxable income by the amount of my 2017 contributions (my MAGI puts me below the deduction phase out threshold). Now I'm concerned that Schwab isn't counting these MR contributions as true IRA contributions, and that I won't see the tax benefit that I intended.
Dec 14, 2017, 3:43 pm
#206
Join Date: Jan 2016
Location: LAX/JFK/SFO
Programs: Amex Plat, Hyatt, IHG cards
Posts: 120
I agree with the above posters. Just because a relatively obscure feature on the Schwab website allows something doesn't mean it will fly with the IRS.
IRAs are funded with cash, not points, and once the MRs reach Schwab they are clearly cash.
Background: I am an Enrolled Agent (though not your EA, and admittedly a rather junior one).
IRAs are funded with cash, not points, and once the MRs reach Schwab they are clearly cash.
Background: I am an Enrolled Agent (though not your EA, and admittedly a rather junior one).
Dec 15, 2017, 1:16 am
#207
Join Date: Oct 2014
Posts: 103
Thanks everyone. I understand the IRS has final say, just a little concerned that Schwab isn't reporting these deposits into my IRA as true contributions, and they are responsible for submitting Form 5498 to the IRS detailing my contributions. I agree that at the end of the day, the IRS will most likely not let this "loophole" / website glitch increase my annual IRA contribution cap beyond $5,500.
Dec 15, 2017, 9:08 am
#208
Join Date: Sep 2007
Location: stl
Programs: AA LT Plat/8.1mm now with 1350 miles left in my account and proud of it.. SPG LT Titanium.
Posts: 3,080
Thanks everyone. I understand the IRS has final say, just a little concerned that Schwab isn't reporting these deposits into my IRA as true contributions, and they are responsible for submitting Form 5498 to the IRS detailing my contributions. I agree that at the end of the day, the IRS will most likely not let this "loophole" / website glitch increase my annual IRA contribution cap beyond $5,500.
Jan 12, 2018, 9:13 am
#210
Join Date: Jun 2014
Location: PSC
Programs: Hilton Diamond/IHG Platinum/DL Plutononium
Posts: 1,728
Cashing out MRs
Considering opening the Schwab Amex Platinum so I can cash out MR Points for 1.25 cpp.
Is there any other avenue to cash out MR points? Will cashing them out to a Schwab brokerage account trigger a 1099?
I've been using my MR points for mainly domestic flights on Delta (don't do any international J travel) and have done the math and it makes more sense for me to be cashing out the points and buying revenue tickets (especially with the 5x MR on airfare) vs trying to get decent award tickets on Delta.
Is there any other avenue to cash out MR points? Will cashing them out to a Schwab brokerage account trigger a 1099?
I've been using my MR points for mainly domestic flights on Delta (don't do any international J travel) and have done the math and it makes more sense for me to be cashing out the points and buying revenue tickets (especially with the 5x MR on airfare) vs trying to get decent award tickets on Delta.