Emigrant Direct Credit Card Exposed

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Emigrant Direct Credit Card Exposed

Postby CreditCardGuru » Sat Mar 16, 2013 2:52 pm

Does the Emigrant Direct credit card really offer the best cash back? This review carefully examines the Emigrant Direct Visa application, it may surprise you…

Quick Overview: They have 2 reward cards. One gives 1.25% cash back and the other gives 1.5% cash back. But the catch is that Emigrant's 1.5% card will cost you $50 per year for its annual fee.

Best Alternatives: Whether you're after high rewards or good interest rates, you can do better with some of these other offers currently available.Full Review of the Emigrant Direct Credit Card
Over the past decade or so, Emigrant Direct seems to be best known for their high yield savings accounts. But what you may not realize is that Emigrant Savings Bank has been around long before the internet. Founded in 1850, they are actually the biggest privately owned bank in the USA and the oldest savings bank in NYC.

Meanwhile their credit card has only been around for the past few years. During that time it underwent some changes, mostly for the worst. This is how their two reward cards current work...

1st offer: Emigrant Direct Visa Signature Bonus Rewards Card

  • 1 point per dollar spent without caps.
  • 25% bonus on the number of points earned (which results in a total of 1.25 points per dollar)
  • 2,500 pts = $25 cash back (1 cent per point)
  • The signup bonus is only $25
  • No annual fee
2nd offer: Emigrant Direct Visa Signature Bonus Rewards PLUS Card

  • 1 point per dollar spent without caps.
  • 50% bonus on the number of points earned (which results in a total of 1.50 points per dollar)
  • 2,500 pts = $25 cash back (1 cent per point)
  • The signup bonus is only $50
  • $50 annual fee
If you choose to redeem points for cash back (instead of travel, merchandise, etc) then the earned rebate is deposited directly into your savings account or applied as a statement credit to your card account.

Admittedly both of these are an improvement over their processor, which was a MasterCard. Previously, you had to have an average balance in your EmigrantDirect American Dream Savings Account of $10,000+ in order to earn 1.4%. Balances less than that amount only results in 1/2% cash back. To make matters worse, the awards were only awarded on a semi-annual basis.

Interest Rate
When I looked at the Emigrant Direct credit card application, the interest rate on both purchases and balance transfers was 9.99% to 20.99%. The rate given is “based on your credit worthiness.”

However given that this is marketed to people with savings accounts, it’s safe to say that most who are contemplating this card are doing so because of the rewards. Therefore, this probably isn’t an issue for most people, since they don’t carry a balance anyway.

Criticisms
Emigrant Direct logo parody
From what I have gathered on the message boards and online credit card reviews, some people criticize that Emigrant Direct Bank doesn’t always have the highest interest rates on savings accounts. I checked myself to see whether or not this is true… and indeed when I looked, there were some others that had APYs of up to a full 0.45% higher than what Emigrant was giving.

So some people argue that even if the Emigrant Direct credit card gives a higher cash back rate, it doesn’t make sense if your savings account isn’t earning the most possible. Depending on the amount you charge per year and the amount you keep in your savings account, that very well could be the case.

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For certain categories of spending, there are other credit cards that give a higher cash back than the Emigrant Direct credit card.



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