A Data Point on a Charles Schwab Shutdown, "Possibly Triggered by MR Cashouts"

WeChat reader Hu Liang shared a data point today about getting shut down by Charles Schwab. Background:

Did not apply for the Debit card
Had only been using the account to cash out MR, with just three redemptions totaling $5,000
There was barely any balance in the account

I applied for the Schwab Checking and brokerage accounts. I opened them several years ago, and at the time there was a $100 bonus for opening the accounts. I opened them for the Schwab Platinum card. But after opening the accounts, I found that transferring MR to ANA was pretty useful, so I never used the account to cash out points until this year. I didn’t do anything else with it.

The Charles Schwab letter is below:

From the letter, we can see:

They gave 20 days to continue redeeming MR
They gave a 30-day grace period

Data points on full Charles Schwab shutdowns are relatively rare. If you have a new account, it may be wise to cash out MR more slowly. It may also help to apply for the Debit card and use it occasionally for purchases or ATM withdrawals, or keep some balance in the account and buy a couple of stocks from time to time.

Once you get shut down, it is usually very difficult to appeal successfully. Best to move on. That said, there’s no need to worry too much—getting out of Charles Schwab’s “black room” is relatively easy, and you can try opening an account again after some time.

As a side note, Charles Schwab’s brokerage account is actually quite easy to open. Even residents of mainland China can apply for it, including with a Chinese-language application. It’s a solid banking account. Of course, if you apply using Chinese identification, it will not be linked to your SSN (or credit history), so you will not be able to apply for the co-branded Platinum card.