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In addition to American Express’ generic consumer Platinum card, there are two current co-branded variants: The Platinum Card from American Express Exclusively for Morgan Stanley and the American Express Platinum Card for Schwab. For a complete comparison of these cards, along with the Business Platinum card, please see: Amex Platinum Complete Guide.
One thing that sets the Schwab Platinum card apart from the others is the ability to “Invest with Rewards” at a great rate. The Schwab Platinum card allows you to convert Membership Rewards points to cash at a value of 1.25 cents per point. The Morgan Stanley card, meanwhile, only allows conversions at a value of 1 cent per point. Options for cashing out rewards with the generic Platinum card are worse.
Now, it seems that the Schwab advantage might be going away. Doctor of Credit reported: American Express Charles Schwab To Lose The 1.25¢ Cashout Option? (Maybe, Landing Page Language Removed).
No more 1.25 language
Here’s the situation in a nutshell: The landing page for the Schwab Platinum welcome offer used to advertise the “Invest with Rewards” feature with the following words: “You can use 60,000 points for a $750 deposit from Schwab into your eligible Schwab account.” Now, those words are simply gone.
The terms of the offer still explicitly state that you can Invest with Rewards, but the terms (as was the case before) do not specify the value of your points when you do so.
Possible reasons they erased the 60K to $750 language
I think that there are several plausible reasons that Schwab removed “You can use 60,000 points for a $750 deposit from Schwab into your eligible Schwab account” from their splash page:
- Simplified message. It’s possible that Schwab and/or Amex just wants to simplify the high level marketing message. Many, many other perks are not shown on the offer page but that doesn’t mean those perks are going away.
- The standard bonus will be changing soon and/or become dynamic. The current language is written the way it is because the standard bonus for the Schwab Platinum card is for 60,000 points after $5K spend. If they were aware that the bonus would soon change, they may have wanted to avoid having to make multiple changes to the splash screen to account for this text. Additionally, Amex has been dynamically changing the offer for their own Platinum card by targeting people with 75K, 100K, and even 125K offers. If there are plans to do something similar with the Schwab Platinum card, then it makes sense that they’d want to simplify things by removing the text that refers to “60,000 points”.
- The Invest with Rewards feature is going away entirely. I don’t think this is likely at all, especially since the terms still include this feature, but I’m including it to be complete.
- The value of Investing with Rewards will drop to 1 cent per point (or worse). This seems to be the outcome most people expect. It makes some sense since the Morgan Stanley Platinum card offers Investing with Rewards at a value of only 1 cent per point.
- The value of Investing with Rewards will go up. We are so used to credit cards losing valuable perks that this seems unlikely, but there’s at least a tiny bit of evidence of this. One Doctor of Credit commenter wrote: “Take this with a grain of salt, but got off the phone with someone at Schwab and they said they have an internal memo from 5/20 that says redemption rate will be 1.5%.”
- Invest with Rewards is changing to a tiered payout. One option is that they could move to a tiered option where you’ll get more value with more points. For example, maybe you would get 1 cent value when redeeming less than 100,000 points, 1.25 cents value when redeeming 100K to 500K, and 1.5 cents value when redeeming 500K or more. Another option, which is think is even more likely, is that they’ll offer a better payout if you have more money invested with Schwab. Anthony writes:
“Another possibility that I believe is plausible is a tiered reward based on your total deposits with Schwab, similar to the appreciation bonus. People that are just opening small accounts and cashing out is probably not what Schwab had in mind and are probably not profitable. So possibly total assets of $1 – $250K = 1 cent, $250 – $1M = 1.25 cents, > $1M = 1.5 cents.”
An argument in favor of 1.5%
If Amex had to completely foot the bill for the Invest with Rewards feature, I’d be 100% sure that value of points would drop. But, it seems to me that Schwab must be augmenting the deposits from Amex. Otherwise, why would Amex let Schwab cardholders get a much better feature than their own unbranded Platinum cardholders get? For example, maybe Amex gives Schwab 1 cent per point and Schwab then makes up the difference. Why would Schwab do this? Think of it as an account funding promotion. Brokerage accounts often run promotions offering cash bonuses for funding new accounts to certain tier levels. And sometimes they run promotions offering cash bonuses for adding new money to existing accounts. The Invest with Rewards feature is like the latter. Schwab may be partially funding this feature as a way of attracting new money to their accounts.
It seems possible to me that Schwab has found that Invest with Rewards customers are more profitable to them. For example, maybe they found that a number of their big customers came to Schwab because of this feature. And so maybe they figure that increasing the payout to 1.5 cents per point will attract many more big customers.
Businesses give away money only when they believe that the end result will mean making more money. That’s why banks offer big signup bonuses for new bank accounts and new credit cards. This could be the same type of thing. Just as credit card issuers have been offering bigger and bigger signup bonuses lately, maybe Schwab is planning to increase their Amex to Schwab “transfer bonus.”
Let me be clear: I’m not saying that a 1.5 cent payout is likely. All I’m saying here is that it is conceivable.
What’s your bet?
Do you think the 1.5 option is likely? Why do you think the landing page dropped the 60K to $750 language?
- Simplified message
- The standard bonus will be changing soon and/or become dynamic
- The Invest with Rewards feature is going away entirely
- The value of Investing with Rewards will drop to 1 cent per point (or worse)
- The value of Investing with Rewards will go up
- Invest with Rewards is changing to a tiered payout.
- Add your own answer: ___________________________
Please comment below.
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Does everyone think if the changes do come and the conversion rate drops, will this happen immediately or will we see some sort of grace period? I just covered 4 mil but trying to decide if I should hold off converting everything I have.
its going to be tiered similar to BOA preferred rewards
The person who wrote the comment on DOC sparking all this 1.5 nonsense posted an update today on Reddit that they called Schwab back and no one had a clue what they were talking about:
https://www.reddit.com/r/churning/comments/nrrvi5/amex_cs_platinum_change_for_the_bad/h0xr64p?utm_source=share&utm_medium=web2x&context=3
It really sounds like this rumor was caused by a miscommunication with a rep that was actually referencing the Investor card that earns 1.5% cash back.
Betting on either 1 cent for everyone or tiered 1/1.25/1.5 for <250k/250k-1m/>1m, but we’ll see.
There was another commenter from DoC claiming their contact at AMEX said the Invest with Rewards feature was going away entirely. It’s all rumor-mongering and hearsay at this point so I don’t think we can accomplish anything here. I’d err on the side of cashing out rather than waiting.
Please, for the sake of all the Schwab cardholders out there, don’t label this a prediction! We all know what will happen then!
I’d love it if they raised payouts based on account size. They’d definitely move to top of the list of the usual suspects.
My bet is either devalued or tiered. I don’t think it would go away entirely, since then it’s basically an inferior Plat with the Schwab name plastered on it, which I’m sure Schwab isn’t interested in.
I’m thinking of applying for a Schwab Platinum but wondered about whether the perks are the same as the generic Platinum. I know the sign-up bonuses vary, but do the perks like the $30 PayPal bonus apply to the Schwab platinum? If so, it seems like a good time to apply before the annual fee goes up next month.
Yes it has all of the same perks including the PayPal bonus (which expires this month), plus a couple perks of its own:
https://frequentmiler.com/amex-platinum-complete-guide/#Additional_Schwab_Perks
I think the reaction to the Schwab Platinum rumors has been interesting in that it shows how the points and miles community is so pessimistic. I’m not saying this is necessarily unjustified–I personally cashed out a bunch of MR as soon as I saw these rumors, and it did not even cross my mind that there were alternatives to a devaluation. In reality, I think our community’s collective mindset that everything always gets devalued is probably not entirely accurate. I don’t think you can look at Aeroplan, for instance, and say unequivocally that the recent changes have made things worse. The same may be true with Hyatt’s changes on July 1 (we’ll see how it’s implemented). Who knows how this will turn out, but perhaps it’s worth taking a step back and looking at whether the mindset that a lot of us collectively have is warranted.
7) Greg had nothing else to do last night, his deadline was approaching, and he was sitting around getting high and drinking Johnnie Walker Blue Label with his college student son, and they both came up with this while laughing hilariously (pinky finger in corner of mouth).
Another possibility that I believe is plausible is a tiered reward based on your total deposits with Schwab, similar to the appreciation bonus. People that are just opening small accounts and cashing out is probably not what Schwab had in mind and are probably not profitable. So possibly total assets of $1 – $250K = 1 cent, $250 – $1M = 1.25 cents, > $1M = 1.5 cents. I would be very happy if they changed to this structure.
Like a lot of this tiered bonuses, doesn’t that quickly reach the point of diminishing returns? With your example, cashing out 500k MR a year (which is probably at the highest end of MR earners), you would still be talking about only .75% of your capital/year. Great for a savings account, not so great for a brokerage, and small beans as compared to moving that money around for bank bonuses (the advantage of having 1000k vs 250k is only $1250 for those 500k MR).
In other words, would it be worth tying up 750k for $1250? Maybe for the select individual with huge capital and no desire for other bank bonuses (and yet cares enough to maximize MR usage).
Keep in mind that Schwab is much more than a bank. I have significant funds in brokerage accounts at Schwab invested in the stock market. This type of bonus system would create an incentive for investors to keep (and build) their funds at Schwab in their bank accounts, brokerage accounts, IRA accounts, etc. I’ve played with some of the bank bonuses, but that’s not money I’m taking out of the stock market, its cash I have on the sideline.
I would agree that higher redemption is very likely. Schwab just acquired TD Ameritrade and needs to compete with Robinhood, Sofi, etc in the race for customers and gathering assets. AMEX Platinum cardholders are likely a very attractive demo — once they have even a small brokerage account, why not switch over the IRA, etc. Cross-selling existing customers is much easier than getting new ones.
I also have significant funds in Schwab brokerage accounts. I think your prediction makes sense, more so than a tiered amount based on points are being redeemed. This approach would be similar to other banks like BofA or Fidelity that offer rewards based on assets with the broker. It’ll be interesting to see what happens.
Yep, I agree. That’s more likely than them offering bigger payouts with more points. I’ve updated that section with your example. Thanks!
A tiered cash-out conversion rate based on qualifying assets with Schwab would be enough incentive for me to roll over my 401(k) to Schwab when I retire, to increase the conversion rate. The situation is analogous to a mattress run that is not worth doing only for the reward, but becomes worth choosing a certain hotel if you need a hotel anyway. The hotel in this case being a low-fee brokerage with decent customer service.
With the expected annual fee increase, it may be plausible that the cash out rate increases and the Schwab appreciation bonus remains the same. I think the rate is likely to stay the same or possibly increase. I renewed my Schwab card in May but will cancel next year if there’s major adverse changes.
I’m going to be pissed if they do 1.5 cpp. I just cashed out 400k. That would be pretty shitty of them to come out with a memo on 5/20 noting the change but then change the website removing any mention of a higher cash out at all.
That would be a game changer but considering how much MR Amex has been handing out with recently promos, I really doubt we will see that. Why they don’t offer a higher value via Amex Travel is beyond me. Would be a game changer then since they often have discounted tickets even for domestic economy. Tho I think the Amex Travel processing fee is coming back at the end of this year so buyer beware.