925

Mine hasn't posted yet. Could they be doing this first post manually?

themicah

I charged 28.85 GBP to my Schwab card on 2/5/09. Almost immediately an authorization showed up for $40.50 (give or take a few cents--it was definitely under $41). This morning Schwab is showing a charge for $42.97.

That's a big difference. There has also been a lot of volatility in the currency markets in the last several days. Oanda.com shows a 3% difference in the interbank GBP/USD rate between 2/5 and 2/10, so that would account for some of the difference, but not all.

So maybe there's rounding in the authorization process? If, for example, the authorization was for 28.00 instead of 28.85 GBP, that combined with the difference in exchange rates between 2/5 and 2/10 would probably account for the difference.

Has anybody else seen this?

soitgoes

Credit card transactions post at an exchange rate based on the posting date (often the close of business the day before). The authorization was probably based on close of business 2/4/09.
Oanda.com:
2/4/09-->41.17USD
2/10/09-->42.82USD

I suspect this difference is entirely the result of Fx market fluctuations.

themicah

For those interested in the foreign exchange angle, I just posted a lengthy analysis of a head-to-head comparison of Schwab credit and ATM cards against CapOne, TD and Citi offerings in another thread. And Schwab wins (with TD close behind).

wco81

So it looks like the credit card company takes advantage of a grace period.

Say you pay a $1000 balance.

They show you $20 in rewards at the FIA site but that $20 doesn't get transferred to your Schwab account until a month later.

entropy

I did get my rewards posted to the my Schwab account... took not quite to the next statement date but given that it should all happen automatically and the bennies of the card, I'm happy.

themicah

Based on posts in this thread, it seems that the cash back posts to the SchwabOne account within the first couple days of the calendar month after your statement closes. So if your statement closes on the fifth of the month, you might have to wait a full month for your cash back. But if your statement closes on the 25th of the month, you might get your cash back just a week or two later.

wco81

OK, so are people letting the money accumulate?

Not much buying of stocks these days.

You have to get the checking account to earn interest and also get an ATM card?

dw

The brokerage account itself comes with an ATM card and free checks, but only pays a minimal amount of interest (0.20%, I think).

dinosims

Why are people getting the checking account and not the savings account if they're just letting the cashback sit there and accumulate interest? It seems the interest rates for savings is 2%, while the interest rate for the checking account is only 1%.

If you just have the Schwab One brokerage account, how do you get money into/out of it? Can you initiate an ACH at another bank to do this?

themicah

You can easily transfer money out via ACH using schwab.com. You just have to send in a "Moneylink" form to link your external checking account. I don't think you can initiate the ACH transaction at the other end, though.

But the checking account is worth having anyway, as it has really great terms. Unlimited ATM fee rebates, zero foreign exchange fees (tested last week by a friend of mine--see the link above), unlimited free checkbook refills, free postage-paid deposit envelopes, free billpay, free ACH, etc.

dinosims

Don't you get all those benefits with the brokerage account?

925

Well, sort of. But all the things are different implementations.

Biggest reason? Last time I checked, interest on funds was 0.1% on brokerage checking, and 1.0% on Investor Checking account, and can go up much higher.

dinosims

Right, but if the only reason for the checking account is for the increase in interest, why not use the brokerage account for all of the 'checking' benefits, and then open a savings account where in interest is 2%?

EasternTraveler

No the ATM Card has fees on the brokerage account when used overseas. On the checking account there are no fees and any charged are rebated.