Personal Capital’s potential 3% everywhere card


Ben, from Reward Yourself, sent me a survey he received from Personal Capital:

Personal Capital 3% card

Personal Capital 3% card

The survey asks for opinions about a possible new Personal Capital Visa credit card:

Personal Capital 3% card

In case the image, above, is hard to read, here is the important info:

Rewards: ​Earn up to 3% cash rewards on up to $1 million in credit card spend, provided as a statement credit or a deposit to your Personal Capital account once a quarter:

3% for advisory clients with over $1 million invested with Personal Capital
2% for clients with less than $1 million invested with Personal Capital
2% for users who aggregate $100,000 with personal Capital’s dashboard
1% for everybody else

Interest Rate: 5.99% – 19.99% interest rate depending on your credit score

Annual Fee: None

My take

At 2% cash back, this card becomes competitive with a couple of other no-fee 2% cash back cards: Fidelity Investment Amex, and Citi Double Cash MasterCard.  I could imagine some people preferring a Visa card, but at a high level the three cards seem to be roughly equivalent – rewards-wise.

At 3% cash back, across the board, this card would be pretty interesting.  The requirement to have $1 million invested with Personal Capital, though, is quite a hurdle.

Is it worth it?

Let’s assume that you’re a big spender and you have $1 million or more available to invest.  And, let’s assume that investment earnings from Personal Capital will be similar to other options available to you (Note: I do not know that to true at all – I’m just making blatant assumptions here).  And, let’s assume that your next best option is a 2% cash back card.

Given the above assumptions, here is how much you would earn above the 2% cash back rate given various spend scenarios:

Spend Scenario 2% cash back 3% cash back Difference
$50K $1K $1.5K $500
$100K $2K $3K $1,000
$200K $4K $6K $2,000
$500K $10K $15K $5,000
$1 Million $20K $30K $10,000

Obviously, as your spend increases, so do the total rewards.  If you spend $1 Million, this 3% cash back card will give you $10,000 more than a 2% cash back card.  That sounds like a lot to me, but might not sound like a lot to those who have $1 Million invested with Personal Capital.

What if Personal Capital investments are less profitable than other options?

Let’s assume that you invest exactly $1 million with Personal Capital in order to earn 3% cash back with this credit card.  And, let’s assume that you would do better with other investment options.  Is it worth it? Is it worth earning higher rewards from your credit card in exchange for smaller investment rewards?  Here’s another view of the spend scenarios:

Spend Scenario Difference between 3% and 2% (from above table) Difference as % of $1 Million investment
$50K $500 .05%
$100K $1,000 .1%
$200K $2,000 .2%
$500K $5,000 .5%
$1 Million $10,000 1%

The above table shows that if you max out the 3% rewards with $1 million spend and you keep the bare minimum required $1 million invested with Personal Capital, your profit on your investment due to spend on the 3% card vs. a 2% card is only 1%.  In other words, if you’re likely to get 1 percentage point higher returns with options other than Personal Capital, then do it.  Heck, even if you can get close to 1% additional returns through other options, you might as well do so since the above table shows only the best case scenario.  If you’re likely to spend less than $1 million on the credit card, then the advantage of Personal Capital vs. other investment options decreases proportionately and there is less and less reason to get excited about this card.

My take summarized


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