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

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. It’s nice to hear there are still banks which are not owned by Wall Street!

Emigrant Direct Credit Card Review
Over the years this credit card has had a few changes, but it has remained a popular choice for cashback nonetheless. Here’s how it works…

Rewards
Without a doubt, this is the primary benefit of the Emigrant Direct credit card. Here’s what they offer:
  • 1.4% cash back on spending… if the average balance of your EmigrantDirect American Dream Savings Account is $10,000 or more.
-OR-
  • 0.5% cash back on spending… if you have an average balance of less than $10,000 in your EmigrantDirect American Dream Savings Account.
These rewards are awarded on a semi-annual basis (twice a year). The average balance is based on each 6 month reward period. So if your average balance is less than $10,000 during that 6-month period, then you will only get 0.5% cash back. If it’s $10,000 or more during that time, then you will get the 1.4%. Whatever the case, the earned rebate is deposited directly into your Emigrant Direct account. There is no cap on the amount of rewards you can earn on net retail purchases.

Interest Rate
When I looked at the Emigrant Direct credit card application, the interest rate on both purchases and balance transfers was either 14.99% or 24.99%. The rate given is “based on your credit worthiness.” I would consider this in the mid to high range, so keep that in mind if you plan on eve carrying a balance on the Emigrant Direct MasterCard.

That being said, 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
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 0.40% 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.

Jan 2012 update: The above card has been discontinued and replaced with a worse offer- it only gives you a flat 1% cash back. It's unclear whether or not all the previous cardholders have been switched to the new card but one thing is for sure, the only application available on their website is for this new version which only gives 1% cash back. Very disappointing!

Best Alternative: Get up to 6% cash back and a $100 bonus (Sponsored Offer)
For certain categories of spending, there are other credit cards that give a higher cash back than the Emigrant Direct credit card. You should check out the new Blue Cash Preferred which was launched back in 2011. It gives up to 6% cash back without caps: