Finance

Everyone has heard of credit cards that earn rewards. Now Washington Mutual is introducing a debit card that earns cash rewards with every purchase.But exactly how much do you get back?

*MOUSE PRINT: “Free Gold Debit MasterCard® with Rewards—get a $.03 reward for each debit purchase transaction up to $250 per year**  **Applies to purchases made by phone, online, in person or by mail. If your account is open and in good standing on your anniversary date, you’ll receive a $.03 reward for each Debit MasterCard purchase transaction made within the last year up to a $250 reward.” [Washington Mutual website, May 16, 2006]

Thinking it must have been a typo, I read the disclosure to mean that you got back three percent (not three cents) for every purchase using their debit card. How generous!  To double-check, I called WaMu’s customer service department. They explained that with every purchase you indeed would get back three cents.

MrConsumer asked: “Now let me get this straight, if I buy a $1000 refrigerator, you are going to give me back three cents?”

Customer service representative: “Yes.”

How generous, and what a great incentive to switch to WaMu. In order to receive the advertised maximum rebate of $250 per year, one would have to make 8333 separate purchases. A snap.

American Express has a new credit card called “Clear.” The primary benefit of the card is that there are “absolutely no fees of any kind.”

*MOUSE PRINT: Buried in the terms and conditions is the additional 2% fee they tack onto transactions made in foreign currencies: “Transactions in Foreign Currencies: Transactions made in foreign currencies are subject to a conversion rate. Foreign currency conversion rate is base rate plus 2%, as described in the Cardmember Agreement.”  [AMEX website, April 13, 2006]

To their credit the list of fees they do NOT charge is impressive: late fees, annual fees, over-the-limit fees, balance transfer fees, cash advance fees, dishonored check fees, wire transfer fees, stop payment order fees, and statement copy fees.

Finally, a stock brokerage account where you don’t get charged a ton of fees or high commissions.

The claims: (1) Our commission prices start as low as $9.95  (2) Just say no to account service fees.

*MOUSE PRINT: (1) “$9.95 trade pricing is for clients who have $1 million in qualifying household assets or trade at least 30 times a quarter.”  (2) “Accounts exempt from account service fees are subject to a minimum balance charge of $30 per quarter for brokerage accounts … [if after notice] … assets remain below… $2500.” [US News, April 3, 2006]

I think Charles Schwab is just saying no to little accounts (under $1 million) with respect to the advertised commission rate, and does not consider a “minimum balance charge” to be an “account service fee.”