Emigrant Direct Cash Back card

[Leeb]

Well, I heard that the card would be available by mid-November....it's the 22nd ...I'm not in the Emigrant club (ING \m/(-_-)\m/), but I was wondering if you all had heard anything recently regarding the card and how much cash back this card is actually going to offer when it becomes available.

[scarymary]

We're still waiting...

I was excited when I saw you post title... thought maybe YOU knew something...

{{{{{sigh}}}}}

[Polonius]

Why all this excitement and curiosity about a card that doesn't exist and for which the terms are completely unknown? There are thousands of cards out there. I don't understand...

[Leeb]

Well, it's being billed as having the "largest cash back rate in the country." I'd like to know what they're offering based on that advertisement. Also, I want to see what if it will cause Emigrant's customer base to grow significantly in the short term. Emigrant's already got 5% on ING, and I wonder if it will cause ING to step up their game even more.

[tonygoldston]

Emigrant's Interest Rate hasn't really seemed to have any effect on ING and what they are doing with rates. Emigrant is at 4% and ING is still at 3.5%.

tony

[scarymary]

I sent an E-mail to ING asking them why they weren't being competitive with the likes of Emigrant and HSBC to name a couple. I said..."Hey, you guys were first in the industry giving higher savings rates and these other companies are blowing your doors off giving even higher rates! So whaddaya got to say about that?"

I got an e-mail back that simply said that they were offering the highest rate that they could at this time... but HEY!! Check your account often as we do raise the rates when appropriate!

Yeah... k... thanks...

[hesiden]

I sent an E-mail to ING asking them why they weren't being competitive with the likes of Emigrant and HSBC to name a couple. I said..."Hey, you guys were first in the industry giving higher savings rates and these other companies are blowing your doors off giving even higher rates! So whaddaya got to say about that?"

I got an e-mail back that simply said that they were offering the highest rate that they could at this time... but HEY!! Check your account often as we do raise the rates when appropriate!

Yeah... k... thanks...

I asked the same question and got a similar reply, their interest rate is not based on the competion. Two weeks later my Emigrant account opened and I transfered everything but $1 there. Thanks for the $50 account opening bonus ING...see ya if you become competative again.

[scarymary]

Can you do a direct transfer by putting your Emigrant account as a linked account or do you need to transfer to your checking then do another transfer into Emigrant???

[hesiden]

When you open an Emigrant account you can directly link to ING by putting in the ING routing number and account number. After the Emigrant account is already open, you can't directly link them because you need to write a check. Maybe a nice CSR would do it for you over the phone. Don't know why the must have a check for $1 when you don't need it for the first account.

[scarymary]

I wonder if I could do a link on ING to Emigrant and just bypass the whole problem with writing a check... hmmm....

[diddlydudette]

I really like Emigrant, but I'm a little disappointed in that they didn't let its customers know what's going on with the credit card. It's fine if they hadn't fine tuned it yet, but surely they know we're waiting and were hoping for some word before Thanksgiving, like their e-mail out to us stated. I know I sent them an e-mail inquiring and I'm sure others have also. Why not just send a form letter out to all its customer's to let us know they are still working on, etc....just as a courtesy to let us know. I just think it would have been nice.

[Leeb]

Seems that ING went up to 3.75% today. Progress, progress. Maybe they'll tie Emigrant for that 4% sooner than I though. That's pretty shady of Emigrant to not have issued any further statements about that card .

[tonygoldston]

I have sent a couple of emails to Emigrant through their site. No reply to either looking for info on the CC.

I finally called and talked to someone. They said they didn't have any information, and it would be sometime next year.

So looks like we will be waiting some more.

tony

[HJMo]

In the mean time, you can check out Pentagon FCU's 1.25% cash back card.

[tonygoldston]

HJMo,

Do you have a link?

tony

[HJMo]

Do you have a link?

https://www.penfed.org/productsAndRates ... dCards.asp

By the way, you have to be a PenFed member to apply. However, it's not difficult to join it. In the worst case, you have to pay 1-year $20 membership to National Military Family Association to be eligible for PenFed membership. If you don't charge much to credit card, it may not worth it. Because you have to charge $8000 to recoup $20 membership fee.

[shooter]

Wouldn't you only need to spend $1600 to recoup the $20?

$8000 should give you $100 at 1.25%.

[tonygoldston]

No the $8000 is to recoup the $20 fee with the additional .25% that you would get over the 1% that you can get on most any rebate card.

tony

[shooter]

Ah, gotcha. Sorry it is finals week at school and I'm a little burned out. The old mind is working like it should.

[rain]

Looks like ED meant thanksgiving '06.

[shooter]

Of course, how silly of us to assume they meant THIS year.

[QikPass]

Pretty Good Marketing Technique IMO.
Nice way to get a nice buzz about their product going on forums like these... they just better deliver sooner rather than later or their buzz may just come back and bite them in da Ah-chew.. (excuse Me)

[QikPass]

Reply from Emmigrant Direct received.

Dear Customer,

Thank you for your inquiry.

The credit card will be launched in the middle of January 2006. No further information is available at this time.

If you have any further questions, please feel free to contact us via email at emigrantdirect@emigrant.com, or by calling 1-800-836-1997 between the hours of 8:00 am to 11:30 pm EST.

Silvia
Thank you for banking with EmigrantDirect.
Home of the American Dream Savings Account.
1800-836-1997

[Board Monitor]

Interesting. I wouldn't be surpised if it ends up being Feb. or March.

[jimmyjack]

They've posted the terms of this card. To see the terms, go to http://www.emigrantdirect.com and click on the credit card.

It's nothing to write home about. A 1.25% cash rebate, deposited into an Emigrant Direct savings account twice a year. However, the user has to have an average daily balance for the prior six months of at least $10,000 to qualify for the 1.25%. If the balance is less than $10k, the user gets a whopping 0.50% rebate for all purchases posted to the account over the previous six billing periods.

With the Citi and Chase 5%/1% cards and the Advanta small business card, an extra 0.25% on what otherwise would get a 1% rebate isn't enough to get me to apply; and that's even assuming I left $10k in the Emigrant account. Unless that rate improves, that won't happen either.

Hate to be a kill joy, but I'm beginning to think Emigrant is doing exactly what ING did when they started the online accounts - pay an above market rate to lure customers initially, let them get comfortable with the name and services, then rest on your laurels and be a bum in the market like the other 20 or 30 online savings banks. That's their prerogative, but my prerogative is to shop for a better rate. Not to sound ungrateful, by a savings account is a commodity.

[stevejk]

Hate to be a kill joy, but I'm beginning to think Emigrant is doing exactly what ING did when they started the online accounts - pay an above market rate to lure customers initially, let them get comfortable with the name and services, then rest on your laurels and be a bum in the market like the other 20 or 30 online savings banks.

I read the Emigrant CC offer and am disappointed. I had my hopes up that they would have a better offer than other banks. Granted, I had it in my mind that I thought it was going to be a debit card so you can access your Emigrant Direct funds.

I read your analysis and I concur. Emigrant used to be the market leader (or at least close to it) when it came to rate increases, surpassing ING Direct. Now it looks like HSBC Direct is now the market leader. Granted, one can find higher rates on Bankrate.com, but of the banks that advertise, HSBC looks like they are the market leader when it comes to interest rate.

I'll be sticking with my Chase and Citi 5%/1% cards.

[Polonius]

Check above. On Nov. 22 I said:

Why all this excitement and curiosity about a card that doesn't exist and for which the terms are completely unknown? There are thousands of cards out there. I don't understand...

NOW do you see my point?

[shooter]

Quite a dissapointment. I kind of gave up on it when they didn't deliver at Thanksgiving. Glad now that I did. Definitely a lesson learned.

[diddlydudette]

That's definitely nothing to write home about. I really thought it would be a great card and worth the wait, but I'm disappointed. That's ok, I still have my Chase and Citi Cash Back cards.

Thanks for updates. I too had written Emigrant a couple times asking about card but got no response to either e-mail.

[Daniel]

DUD

[Leeb]

Alright Polonius, you win . But at least I still have my trusty ING - they now have a 4.75% teaser rate going on until tax day.

[db619196]

I am waiting for Emigrant Direct to jack up their rate significantly here soon...at least that has been the trend. Of course, they seem to have been lagging longer than I expected, staying at 4.00$.

I applied for their card and got a 13,000 limit...3-4 times what I usually get. Since I will be getting the 1.25%, I figure I will use the card for my non-grocery, non-gas, non-Amazon.com, and non-restaurant purchases, since I get 3-5% back on all of those from other cards.

Yeah the card isn't what I expected, but what I expected may have been impossible to deliver

David

[Polonius]

I'm getting 1.5% cash back on my PayPal debit card for any purchases anywhere (as long as I say it's a credit card, not a debit card). It's credited right to my PayPal account as cash after each purchase. Nice deal. Best overall discount I've found, but I also use other cards for other purposes (gas, restaurants, travel, office supplies, etc.).

[Board Monitor]

Cool! I was wondering about that. Have you ever had any problems using getting the 1.5% rebate?

[Polonius]

No problems at all using it. Once when it was scanned I was asked immediately for a PIN number--that means it's going to be handled as a debit card, without the 1.5% back, so I cancelled the transaction and used a different card. So far, that's only happened at the cash register in Costco. I'm able to buy ONLINE using it at Costco Online and still get the 1.5%--plus 2% by being an Executive Member of Costco.

[db619196]

I noticed Emigrant Direct's American Dream Account is now at 4.25% APY. They must have just raised it, because Bankrate.com hasn't gotten the news yet.

[Board Monitor]

Yea!!! Thanks for sharing about the new 4.25% rate. I thought Emigrant would never catch up. Shame on me for losing faith.

[Razorshock]

Is anyone else concerned that the rebate will be counted as interest income on a 1099int since they are depositing the rebates directly into the account?

I got a slew of 1099int statements from deposit bonuses, hoping that this cash rebate won't be counted in the same way.

[stevejk]

Is anyone else concerned that the rebate will be counted as interest income on a 1099int since they are depositing the rebates directly into the account?

I'm thinking not. The cash back from the ED credit card would not be 1099'ed. The best description I heard was that the cash back from a credit card is analogous to using a coupon. It isn't income, but a reduction in the amount spent.

Update: That is, it's not income from savings or investment, which would be 1099-able. It's certainly an expense for the company but more of a promotion, ala a coupon or mail-in rebate. Where the tax issue comes in, I understand, is if one purchases an item for their business and writes it off as a business expense. If they got 1% cash back for the purchase, they can only declare 99% of the price, not the full price they paid.

[rain]

Actually I just had a thought about the issue of whether banks will send you an 1099 for these cash incentives. Disclaimer--just my opinion.

For interest expense paid out by banks, this is considered part of operating expenses, somewhat like COGS for manufacturers. You get a 1099 if they consider these incentives part of operating costs.

Or they could consider it a sales/marketing expense, and not send 1099 forms.

Banks wouldn't care whether the consumer has to pay taxes, sorry. What they do care about is what this looks like on their balance sheet. Generally people looking at financial statements prefer to see high expenses rather than high operating costs, because expenses are generally reduceble, whereas COGS is a cost of the business, affects your margin. So a bank would tend to want to list these as sales/promotion cost, imo. Thus would not send 1099 forms.

But if these are directly traceable to revenue, it is probably more accurate to send 1099 forms and consider these incentives as a cost of operating.

What I'm saying is, the bank's dilemma is probably an accounting one.

Currently, promotions for checking/savings account all seem to require tax paid on these bonus interest.

Promotions where you get points (to exchange for goodies) or cash back doesn't.

Promotions depositing directly into a savings/checking account will be a little mix of both don't you think?

Eventually, as accounting systems/tracking technology become more sophisticated, I would be surprised if everything isn't traceable, and hence, taxable. I give it 3-5 years.

Big brother's watching!