Rakuten NISA: Credit or Debit

[Jemineye]

My partner wants to open up a Tsumitate NISA. He has an SBI account already but he’s attracted to Rakuten because of the points system.

I don’t know much about investing but I feel like having a credit card for his NISA would be counterproductive. To me it sounds like he’s having a bank fund his investment and then paying the bank back later. There is a debit card option as well which I feel is safer but obviously no points. He doesn’t use the Rakuten website at all so this account would be purely for investments.

For those with experience, what do you recommend?

[beanhead]

Japanese credit cards are generally paid off in full the next month (unless you use 'revolving'), so this is hardly taking on debt in order to invest.

Rakuten is reducing the points available for using their card on Rakuten Shoken. There is a thread about that somewhere.
If he wants points, Monex is currently the best option, followed by SBI.
Of course they could also change their points policy as well in the future...

[Jemineye]

Thanks for the feedback. I just felt like he’d be better off just making a debit card instead and to invest directly through that.

I not long saw that actually and I told him about it. I think he’d be better off using the SBI account that he “already” has but he seems to be really interested in the points system so he said he’ll check out Monex now.

May I ask what the benefits of these point systems might be. Again, complete novice here so I don’t know much but is it like cash back / extra money to invest? I’m not sure how it works

[beanhead]

May I ask what the benefits of these point systems might be. Again, complete novice here so I don’t know much but is it like cash back / extra money to invest? I’m not sure how it works

Here is the Monex one. 1.1% back in points that can be used on Monex to reduce some fees, or changed into T-points or other electronic money.
https://info.monex.co.jp/service/monex-card/index.html

Getting the SBI credit card is probably the simplest option, I think. I believe they do something similar to Monex.

[Tkydon]

Basically, so long as you pay your credit card off every month, and don't use the revolving credit option, the use of the credit card is interest free, so just the same as using a debit card, but the funds withdrawal is just delayed to the end of the month (card payment date)...

When you use the credit card for certain types of payments, or at certain merchants, the Credit Card Company gives Points, basically equivalent to some kind of CashBack or Discount, or Airline Miles, or whatever - Customer Loyalty Program for using the card.

This perk is provided by the Credit Card company for using the Credit Card, and not from the NISA Company (or Division), but it adds up to a deduction or cashback on your NISA contribution by the amount of the Points or other economic benefit.

[adamu]

The reasons companies do anything, is that it results in more money for them.

The reason they provide point systems is that it encourages customers to user their products/services more often compared to competitors, provides them with lots of data about your purchase patterns, and allows them to target you with marketing.

The reason they provide points for using their credit card for investing, is that they are hoping you will also use the credit card for other things as well, making them money and providing them with data. They make money on every transaction from transaction charges, and as beanhead and Tkydon said if you use their revolving payments option, they make interest on the balance, hugely outweighing the cost of any of the points they gave you.

That's the company's motivation. It doesn't mean it's not a good deal for you. You *can* make more by taking them up on their offers - just consider whether you are then fulfilling their objectives by making other decisions that are not in your best interests.

[zeroshiki]

I'm also pretty sure you can't use a debit card for tsumitate unless you mean the Rakuten Bank debit card which is basically just your bank account.

[Jemineye]

May I ask what the benefits of these point systems might be. Again, complete novice here so I don’t know much but is it like cash back / extra money to invest? I’m not sure how it works

Here is the Monex one. 1.1% back in points that can be used on Monex to reduce some fees, or changed into T-points or other electronic money.
https://info.monex.co.jp/service/monex-card/index.html

Getting the SBI credit card is probably the simplest option, I think. I believe they do something similar to Monex.

Thanks for the link. I passed it on to him but he still seems attracted to Rakuten. Says it looks easier

[Jemineye]

The reasons companies do anything, is that it results in more money for them.

The reason they provide point systems is that it encourages customers to user their products/services more often compared to competitors, provides them with lots of data about your purchase patterns, and allows them to target you with marketing.

The reason they provide points for using their credit card for investing, is that they are hoping you will also use the credit card for other things as well, making them money and providing them with data. They make money on every transaction from transaction charges, and as beanhead and Tkydon said if you use their revolving payments option, they make interest on the balance, hugely outweighing the cost of any of the points they gave you.

That's the company's motivation. It doesn't mean it's not a good deal for you. You *can* make more by taking them up on their offers - just consider whether you are then fulfilling their objectives by making other decisions that are not in your best interests.

Thank you for the explanation.
So then is it worth it if he’s not making any transactions for other things because while he is attracted to the points, he would be - or at least I believe he would be - using it as an investment account only.

[Jemineye]

I'm also pretty sure you can't use a debit card for tsumitate unless you mean the Rakuten Bank debit card which is basically just your bank account.

Oh now that’s interesting.

I myself would like to open a tsumitate as well but I only have debit cards…
I often hear that Rakuten is the easiest to get a credit card for, is that correct?