Back in April, I reviewed the Charles Schwab Invest First VISA Credit Card. I’ve been using the card for 6 months now as my primary card (except for gas (PFCU) and hotels (Marriott)), and I have to say it has met all expectations. The account is everything I currently could ask for:
- 2% back on all purchases – a very solid reward
- no foreign transaction fees – Spain, no problem; London, no problem
- automatic payment so I don’t have to worry about manual payments
- excellent customer service
The one area I wasn’t as keen on was that all of my rewards were required to go into a Schwab brokerage account paying .01% on the balance and charging $12.95 commissions. This would mean the money would just sit unused and not gaining meaningful interest unless I transferred it out. And, sit it did………..until today.
Today I read online in the NY Times that Schwab was introducing its own ETF’s. Normally I wouldn’t care because I have plenty of access to great ETF’s through Ameritrade, but I read on anyway and found out that if you purchase a Schwab ETF through your Schwab account, there is no brokerage commission. That’s a pretty good deal I thought, but probably Schwab will just put their expense ratios higher than average to make up the difference. Wrong. The Schwab ETF’s expense ratios were lower than the ones for the comparable Vanguard funds. To top it off, when you make your order at Schwab, there is a simple click box to reinvest your dividends.
Sold. So, today I’m investing all my free money into free ETF’s (75% SCHF, 25% SCHB) with free dividend reinvestment. All in all, a pretty good deal.