Charles Schwab Corp. on Oct. 1 will end its sponsorship of its two rewards credit cards for its investment clients, resulting in a $20 million pretax charge the company expects to absorb during the third quarter.
The San Francisco-based investment company recently began notifying cardholders it will no longer support the Schwab WorldPoints Visa card, introduced in 2004, and the Schwab Invest First Visa card, introduced in 2008.
The company declined to explain why it is ending its sponsorship of the cards, which imposed no annual fees and enabled cardholders to earn as much as 2% cash back on purchases.
Bank of America Corp., Schwab’s former issuing partner, is taking over management of the accounts, Schwab says. A BofA spokesperson says the company plans no immediate changes in the accounts’ terms, conditions or rewards programs.
To qualify for one of the two Schwab rewards credit cards, customers were required to open a Schwab investment account, but they were not required to maintain a specific balance, the spokesperson says.
“We’re glad that people got to enjoy these cards at Schwab for the past couple of years, and we’re sorry that we can no longer sponsor them,” the company said in a statement.
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