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New Emigrant Direct Credit Card

This article was written by in Banking, Credit. 24 comments.


There have been rumors if this for a long time, but Emigrant Direct has finally announced their new credit card. This is a “platinum” MasterCard that offers up to 1.25 percent cash back on all purchases with no yearly limit. The rewards are deposited directly into your Emigrant Direct account twice a year.

If you have an average daily balance (for the last six months) of $10,000 in your Emigrant Direct savings account, you qualify for the 1.25 percent cash back rate. If you don’t have that average daily balance, your cash back rate is only 0.5 percent. (Thanks to fivecentnickel for pointing out this stipulation.)

I’ve had an Emigrant Direct savings account for nine months, and I have had none of the problems that some people speak about. The sign-up process was a little long, but nine months later, that is my only complaint.

Emigrant Direct does not offer the highest interest yield anymore, but the combination of the relatively high APY and the credit card rebates may be enough to win over more customers.

The credit card I use is a CitiBank Dividend Platinum Select MasterCard. To compare, the CitiBank card offers 1 percent back on all purchases and 5 percent back on purchases at supermarkets, drug stores, and gas stations. However, your cash is not automatically deposited — you have to request a rebate check every so often, so you’re missing out on (taxable) interest while the money is held by CitiBank.

February 1, 2006 Update: The CitiBank card now offers 2% cash back rather than 5%.

The Emigrant Direct card would be more worthwhile if the rewards were deposited immediately. Since they are only deposited twice a year, the bank, like CitiBank, is earning interest on your cash while you’re not.

Emigrant Direct credit card

Thanks to Neo who posted a comment here to let me know that Emigrant Direct finally unveiled what it had promised in September last year.

Updated February 6, 2012 and originally published January 20, 2006. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 12 comments… read them below or add one }

avatar fivecentnickel.com

Check that minimum balance clause… If you dip below an average daily balance for just one day during the six months prior to reward deposition, your cash back drops to 0.50% of net purchases. It’s not 1.25%. It’s UP TO 1.25%.

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avatar fivecentnickel.com

Sorry, didn’t mean the ‘for just one day’ bit… It’s averaged across the six months. Still, that’s a *big* hit to your rewards.

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avatar Luke Landes ♦127,500 (Platinum)

That is a major detriment for what would probably be most users. I updated the text above… thanks for the update!

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avatar Will Kirby

I was stoked about picking up one of these cards until you mentioned that balance minimum. This seems rather pointless for a lot of people when you can easily get a regular card that offers 1% back and then just use HSBC to get a higher savings account rate than ED. Oh well!

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avatar Caitlin

Yeah…reading the fine print totally threw cold water all over my excitement about this card. Now, I’m not interested at all.

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avatar Neo

I will be sticking with my Citibank card since it pays a higher %. If I get close to the $300/yr limit, I might consider getting another reward card. I have also already transferred my funds from ED to ING.

Neo

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avatar Anonymous

I am glad to have my ED account @4.% although ING’s 4.75 is in my near future,but for cash back my AMEX Cash Rebate and Discover Platinum cards pay well especially DPC when you can double your rewards when you spend at certain partners stores/web sites.

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avatar mike

The ED card is exactly what I needed. I was hitting the roof on my Citi card, and it’s nice not to constantly think about what defines a supermarket. The constent 1.25 makes my life easier. Plus, i’m sure ED will raise its rate if the Fed hikes rates next week.

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avatar Jeff

I think you are wrong about the (taxable) comment above – I’ve read elsewhere that credit card cash back is treated by the IRS as a “reduction of purchase cost” and not interest – this is why you don’t receive a 1099-INT from your credit card company. It isn’t considered taxable income.

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avatar Luke Landes ♦127,500 (Platinum)

I was referring to the interest gained on the cash back… which is taxable.

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avatar Will

ED card processor Jupiter Bank does not support recent version of Quicken since they only provide QIF download which Quicken does not support for credit cards.

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avatar Kathy

If you are offering a savings account associated to a credit card account does this fall under regulation DD

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