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Save; Insider
- Save will soon issue the Wealth Premium credit card which will reward cardholders with stock equity instead of points or direct cashback.
- Save expects the card to offer an average of 6.04% cash back for all purchases.
- This card has a $750 annual fee.
- Read Insider’s guide to the best premium credit cards.
Lately, the credit cards market has become exploratory in the way it rewards cardholders for spending.
For example, we’ve seen the debut of many cryptocurrency credit cards. Your incentive for swiping these cards is a non-cash product that can be liquidated at rates determined by a volatile market. It may make your palms sweat a bit to think about earning crypto — but it can pay off big if things go smoothly.
Coming soon is another credit card concept with an outsized payoff potential contingent on market performance — and it’s likely more digestible (and understandable) than crypto for most of us.
Read more: The best credit cards to turn rewards or cash back from everyday spending into investments in 2022
Instead of earning airline miles, hotel points, or direct cashback, the new Save® Wealth Premium card rewards you with stock every time you swipe your card. The result for you is cash back, but your earning isn’t a flat rate as it is with other credit cards. Instead, it’s ever-changing.
“The Wealth card is designed for consumers who are looking for the potential of better economic value from their credit card in a low-interest rate environment, and with high inflation,” said Michael Nelskyla, CEO at Save.
The card is as simple or complicated as you want it to be; you can swipe mindlessly and allow Save to handle the investments (Save charges a management fee of 0.79%), or you can dictate what you want to invest in. Save estimates that you’ll net a 6.04% average return on all purchases. We’ll show you how Save arrives at this number in a minute. Also realize that you could get a much higher (or lower) return, depending on stock market performance.
The Save Wealth Premium card isn’t yet available, but you can preorder your card now. Cards are expected to ship in late February 2022.
Here’s an exclusive first look at what to expect from the Save Wealth Premium card.
Save Wealth card details
A credit card that earns investments instead of cash back or travel rewards is a novel idea. But with a $750 annual fee, is it a worthwhile concept to experiment with?
Here’s how it works. Save purchases a strategy-linked security with an investment value a little over twice the amount you spend. If you spend $100, Save will invest $217 in stocks.
“Save is a discretionary advisor, who will allocate a portfolio that matches the customer investment profile, but the customer can overrule independently as needed,” said Nelskyla. “Customers have full transparency into the investment portfolio assets and strategy.”
A lot of big words, I know. In short, Save will invest for you, or you can tell them exactly how you’d like your reward stock invested.
How it works
You’ll hear this disclaimer repeatedly: There’s no way to guarantee an exact return rate. Earning rates fluctuate depending on stock market performance. But through Save’s hypothetical back-testing procedure which views market data from 2006 to the present, the company has calculated an average growth rate of 6.04% (that’s after their mandatory 0.79% wealth management fee).
With that in mind, they’ve crafted a valuation chart to compare the Wealth Premium card to other premium rewards cards. This reflects the expected return rate based on $3,500 in monthly spending.
The “Value of rewards Year 1” includes the welcome bonus of each card.
Save
For this comparison, Save has assumed the points value of competing cards is worth 1.5% back. If you’re familiar with Insider’s points valuations, you know it’s not difficult to receive a value significantly higher than this from rewards currencies earned by the
One other important note: Your minimum return will always be 0%. You won’t lose money if the stock market takes a turn for the worse. Here’s how Save described this situation to Insider: “The customer can not invest their own funds, and any investment is generated by spend, hence there is no risk to the customer if there is no return for periods when the market underperforms.”
There is no cap on the amount of money you can earn with this card. But there is a cap on how much you can lose — and that’s a good thing.
Read more: Guide to the best travel rewards credit cards
Redemption options
While the card doesn’t earn cash back directly, it’s effectively a cash-back credit card. You can’t transfer its rewards to valuable airline and hotel partners like you can with other premium cards such as the
- For every dollar you spend, Save invests $2.17 for you
- The investments remain untouched for a little over a year
- Save deposits the returns earned by the stocks into your bank account (minus Save’s mandatory 0.79% wealth management fee)
To be clear, you will not have access to the actual investments — only the gains from those investments. For example, if you spend $100, Save will purchase $217 in stocks (chosen by either you or Save). One year after that $100 purchase, you’ll be eligible to withdraw the gains on that stock. If the stock has yielded the expected return, you’ll receive $6.04 for your $100 purchase.
In the event that you make less than 0.79%, you won’t be charged the wealth management fee.
Because the return rate from your funds isn’t available until a year after the initial investment, “you’ll have a monthly annuity of returns coming in for every month you spent in the previous year, which is a good income generator,” said Nelskyla. “At any time, you can cancel your account and we will liquidate your investments at their market value and you will receive them. But it defeats the purpose of the program, and hence your returns may be lower than typical portfolio returns, but still likely to be higher than any cashback value of other cards.”
In short, you’ll be most rewarded by letting your stocks ride instead of withdrawing every month.
Welcome bonus
Currently, there is a $10,000 investment sign-up bonus. That does not equate to $10,000 in cash — this is an investment made on your behalf. There’s no way to say for certain how much this is worth, as the market fluctuates, but a reasonable estimate is $278. Here’s why.
For every dollar you spend, Save will purchase $2.17 in investments. That means a $10,000 bonus is equivalent to spending $4,608. If you net a projected average return of 6.04% return on that spending, you’d receive $278.
Read more: The best current credit card welcome bonuses
In addition to this, both you and a friend will receive a $5,000 investment bonus when you refer to the card. Again, this is not a cash bonus. Using the above equation, this bonus should be worth $139, on average.
It’s worth restating that this dollar amount could be dramatically higher depending on the stock market. And by that same token, you could net absolutely nothing.
Credit card benefits
Earning rates
It’s been stated before, but the Save Wealth Premium card’s big selling point is its potential earning rates on everyday spending — a whopping 6.04% estimated average return. There are no limits to what you can earn. And there are also bonus categories that earn the following (again, all are estimates):
- Tesla, Peloton, SoulCycle — 18% back
- Samsung, Apple, Microsoft — 12% back
- Amazon, Whole Foods — 9% back
As you can see, the Wealth Premium credit card is designed for members with high-quality brand loyalty. You won’t find annual Walmart+ subscription credits on this card.
These categories yield higher returns because Save purchases more stock per dollar when you transact with these merchants. For example, think of Tesla as a 3x category, Samsung as a 2x category, and Amazon as a 1.5x category.
Premium Market Savings account
The card comes with access to Save’s enhanced FDIC-insured cash management tools which include:
- A Premium Market Savings account (which yields 1.5% on cash deposited)
- A high yield checking account (which yields 0.5% back on cash deposited)
There are no deposit limits except for the $250,000 maximum for eligibility for FDIC insurance provided by Save’s bank partners.
Travel benefits
The Save Wealth Premium is not a travel credit card, though it’s got some fair travel benefits that are mostly standard with Visa Signature credit cards:
- Primary rental car insurance (up to the full value of the car)
- Trip cancellation insurance
- Emergency evacuation/repatriation of remains
- Visa Luxury Hotel Collection
- Travel and emergency assistance
The card also offers premium benefits you won’t find on most other cards, such as:
- 15% Audi rental discount
- Avis Presidents Club status (normally by invitation only, and comes with perks like 50% bonus points, a guaranteed car, and double upgrades when available after booking an intermediate car or higher)
Lifestyle benefits
This card comes with access to the Visa Signature Concierge, which can help with such arrangements as travel, restaurant reservations, and tickets to entertainment events.
The Save Wealth Premium is also good for large purchases, as it offers purchase security and extended warranty benefits.
Save® Wealth Plus
If the Save Wealth Premium is a little out of your price range, you can also apply for the Save® Wealth Plus card. It works the same as its more expensive sibling. Here’s what you’ll get:
- $300 annual fee ($450 cheaper)
- Earn an average of 4.03% on all purchases (instead of 6.04%)
- $10,000 investment sign-up bonus (same as the Wealth Premium card)
- $2,500 referral investment bonus (half the size of the Wealth Premium card referral bonus)
- Visa Signature benefits (same as the Wealth Premium card)
If we assume that each card will yield the estimated return, the Wealth Plus card is only the right choice for anyone planning to spend less than $22,400 annually. After that figure, the Wealth Premium card is the better value:
- With the Save Wealth Plus card, 4.03% back will earn $902.72 after spending $22,400. Subtract the $300 annual fee, and you’re left with $602.72.
- With the Save Wealth Premium card, 6.04% back will earn $1,352.96 after spending $22,400. Subtract the $750 annual fee, and you’re left with $602.96
Bottom line
We’ve never before seen a credit card like the Save Wealth Premium credit card. The opportunity to earn stock rewards instead of direct cash back comes with uncertainty — a stock market free fall could mean you don’t earn a dime for your spending.
But Save’s hypothetical back-testing procedure suggests cardholders will receive an average of 6.04% back on all spending. Just be aware that you’ll have to wait at least one year before you see any returns from the card, as the investments generated by your spending must remain untouched for at least one year.
Depending on the success of the Save Wealth Premium card, this could be the future of credit card rewards.
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