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Cashback Charge Card?

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New Contributor

Cashback Charge Card?

Is ther any cashback charge card out there? If not, why?! 

AMEX Gold: NPSL | TD Cash: 10K | RBC Rewards: 25K | Citi Premier: 9.3K | Discover It: 3.4K | BCE: 0.5K | BHG World MC: 11K
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EX: 730 | EQ: 738 | TU: 741

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Frequent Contributor

Re: Cashback Charge Card?


@nima85 wrote:

Is ther any cashback charge card out there? If not, why?! 


Just pay the balance in full every month and it is basically a charge card. You can redeem Amex MR points for statement credits, but it offers a terrible redemption rate.

Message 2 of 4
Established Contributor

Re: Cashback Charge Card?

Any MR earning AmEx charge card can be a cashback charge card. Though as mentioned before, the rate is terrible, often not even breaking 1¢/pt. The only one I've seen people use for that purpose may be the Schwab AmEx Platinum for the increased redemption rate into Schwab accounts. 

 

As for why, I think it's probably because charge cards themselves are just not that common. Many lenders make a large proportion of their profits (and reward revenue stream) on a card product through interest charges. A charge card by definition basically rules out that lucrative revenue stream from the get go so you'd need to have some other way to make money like AFs (AmEx charge cards for instance). 

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Senior Contributor

Re: Cashback Charge Card?

My vague understanding, perhaps not totally accurate...

 

Charge cards tend to be associated (or at least once were) with customers who spend a lot, can comfortably PIF, and are willing to pay annual fees. These customers typically value strong benefits and perks over rewards, and fly enough that miles may be preferable to cash.

 

Amex Platinum only pays 1x on off-category purchases, using some of the high margin to provide benefits. Incentivizing customers to opt for miles over a poor cash redemption also keeps the cost down, since airlines sell miles to Amex quite cheaply.

 

Of course, cards have changed and many customers have adapted. I favor miles, but like to know I have a decent worst-case value for my MRs with Schwab Platinum. And with Amex offering many customers extended payment options, the distinction is certainly a bit blurred.

Most spend: CSR, CFU, BBP, Costco, BCP
Rewards/AAoA ballast: CF, Discover, ED, Arrival, Double Cash
Perks: Schwab Platinum, IHG49, Hyatt75, Brilliant, Delta Platinum, Aviator Red
Plan to close: Savor
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