Full Review of HSBC Advance Mastercard Credit Card
Competitive rewards during the first year
Unusual and modest one-time offer
Requires HSBC account, at least initially
Restrictive redemption program
- Competitive Rewards During the First Year: This card’s rewards during the first year of ownership are competitive compared to similar rewards cards. For the first 12 months after you open a card account, you’ll earn 3 points per dollar spent on dining and entertainment and 2 points per dollar on all other card charges, for the first $25,000 in purchases. With HSBC points worth 1 cent apiece for all redemptions, those rewards essentially add up to 2% or 3% of purchases. That’s a decent rate for a card that charges no annual fee to customers with qualifying accounts. (It's possible to find rewards credit cards offering higher rates on those categories, like the Capital One Savor or Amex Gold card, but they come with relatively high annual fees.)
- Cell-Phone Protection: If you use the HSBC Advance Mastercard to pay your monthly phone bill, you’ll get up to $600 in protection for your cell phone, subject to a $50 deductible. While theft is covered, an unexplained loss of the phone is not. And any eligible damage must affect the phone’s functionality, which precludes repairs for cosmetic reasons alone, or due to abuse or what’s deemed to be normal wear and tear. Finally, this is secondary coverage that kicks in after you’ve received the benefits from any coverage from your existing phone insurance policies.
- Unusual and Modest One-Time Offer: Rewards credit cards typically offer a one-time cash or points bonus, sometimes worth a few hundred dollars, that you earn after you reach a spending threshold within the first several months of opening an account. This card instead adds a bonus point to all purchases you make during your first year, which is a less desirable arrangement in several respects.First, where the 90-day offers typically require $3,000 or $5,000 in spending to earn tens of thousands of points, the HSBC Advance Mastercard requires tens of thousands of dollars in spending to earn those same typical point totals—and the same total bonus value, given that HSBC points are worth just a cent apiece. And you accumulate that value slowly over the year, rather than all at once within a few months, as with most one-time offers.
- Requires Qualifying HSBC Account, At Least Initially: To get this card, you must be an HSBC Advance or Premier customer, which requires maintaining a combined balance in personal accounts and investment balances of at least $10,000, or at least $5,000 provided you have a recurring direct deposit. After you receive the card, you may drop this account qualification (by closing an account, say, or reducing its balance). But you must then begin to pay a $45 annual fee for the card.
- Restrictive Redemption Program: Though HSBC provides several options for redeeming points, all involve redemption only through HSBC's rewards portal. Many other travel cards provide the ability to transfer points to other loyalty programs.
This Card is Best For
Resists or refuses an annual fee on principle or due to cost
Seeks to maximize points or miles earnings across spending categories
The HSBC Advance Mastercard is for those who have an HSBC Advance or Premier banking or investment account, or are willing to open one, since that’s a requirement to receive the card. Since that qualification involves maintaining a balance of at least $5,000 in the account, this is a card for those who are serious about having HSBC handle at least a significant portion of their banking or investments. After you get the HSBC Advance Mastercard, you can drop the qualifying account or reduce its balance, but you must then begin to pay $45 a year for the card.This card could also appeal to those who want to transfer a balance or make a major purchase while earning rewards, since there's a 12-month 0% APR introductory period. Be aware, though, that HSBC Advance Mastercard has a higher balance-transfer fee than most cards—4% rather than the customary 3%. That difference could significantly increase the cost of a transfer—boosting the cost of transferring $10,000 by $100, for example.
Finally, the HSBC Advance Mastercard has appeal, too, if you have no insurance on your cell phone, since it extends $600 in coverage provided you pay your cell-phone bill with the card. While there are caveats to the protection, including that it covers a total loss only when the phone is stolen, it still provides some peace of mind about the most valuable item most of us ever carry around with us.
The presence of secondary car-rental insurance coverage and absence of a foreign-transaction fee—benefits that not all no-fee cards offer—also make HSBC Advance Mastercard a decent fit for those who travel frequently and have no other card that offers these pluses.
HSBC Advance Mastercard One-Time Offer
The one-time offer with the HSBC Advance Mastercard is longer than those of most cards, lasting a full year, but also requires greater spending to get comparable benefits. A bonus point is added to all purchases you make during your first year. With points worth a cent each, by Investopedia’s valuation, you’d need to spend tens of thousands of dollars to earn the tens of thousands of points that many other cards offer for $3,000 or $5,000 in spending. Also, the offers with those other cards give you all the points in as little as one to three months, provided you meet the needed spending requirement, rather than trickling them out gradually over a year.
Rewards Earning Details
Cardholders earn 2 points per dollar on dining and entertainment and 1 point per dollar on everything else. (During the first year with the card, those rates increase to 3 points per dollar spent on dining and entertainment and 2 points per dollar on all other purchases up to $25,000 in spending.) There's no limit to the number of points you can earn in a year and points don't expire.
Vendors for purchases eligible for dining rewards include restaurants, bars, taverns, comedy clubs, nightclubs, cocktail lounges, discotheques, and fast-food outlets. Qualifying entertainment purchases include tickets and other purchases at sports and recreation facilities, amusement parks, and tourist attractions, along with tickets to theatre, concerts, and movies and purchases of recorded music and videos.
Points are available in your account within one to two billing cycles after making a purchase.
Rewards Redemption Details
HSBC offers several different options for redeeming your points through the HSBC Advance Rewards Program. Those options include:
- Merchandise from hundreds of brands
- Gift cards starting at $10 for things like travel and shopping
- Travel, including flights, hotels, car rentals, travel packages, and a TSA PreCheck statement credit
- Cash back as a statement credit or a direct deposit to an HSBC bank checking or savings account
Each HSBC Advance point is worth 1 cent, regardless of the redemption option you choose.
You can’t transfer points from your HSBC Advance Mastercard account to any other person or program.
How to Maximize Your Rewards
First and foremost, you should take advantage of enhanced rewards earnings during the first year of membership. Earning 3 points per dollar on dining and entertainment and 2 points per dollar on all other purchases increases your rewards during that period by a third or a half respectively.
Next, maintain the HSBC bank or investment account that helped you qualify for the card at a level that allows you to continue to get it without an annual fee. If you allow the account’s balance to dip below the level (of either $5,000 or $10,000) required to avoid having a $45 annual fee kick in.
Finally, if you have a balance on another credit card earning high interest, or if you're planning on making a large purchase, use the 12-month 0% introductory period on purchases and balance transfers. However, be sure to factor in the unusually high transfer fee of 4% into your calculations of the benefit of such a transfer.
To provide an example of the return you could earn with HSBC Advance Mastercard, let's assume that you use it exclusively for dining and entertainment, which earn the card’s best returns. You spend $3,500 per year at restaurants and $3,200 on entertainment at places like sports clubs, amusement parks, and tourist attractions. Such spending on dining and entertainment are close to the expenditures of the average American household, according to the Bureau of Labor Statistics.
During the first year of card membership, you'd earn 20,100 points worth $201, due to the bonus rate in effect then. If you were to spend the same amount in subsequent years, when the normal rate applies, you'd earn 13,400 points worth $134.
In addition to the spending scenario above, let's say that you also use this card for groceries, gas, apparel, and personal care products. We'll further assume your annual spending close to that of the average American household in these categories—$4,500 on groceries, $2,000 on apparel, $2,100 on gas, and $800 on personal care.
The first year of card membership, you'd earn 38,900 points valued at $389. If you were to keep the same spending habits in subsequent years, you'd earn 22,800 points valued at $228.
HSBC Advance Mastercard’s Outstanding Benefits
- Cellular wireless-phone protection
- Complimentary ShopRunner membership
- Discount on Postmates
- Discounts on Priceless Golf
- 10% off at onefinestay
- $1 million in travel-accident insurance
- Mastercard ID theft protection
- Tap & go contactless payment
- Rental car collision coverage (secondary to own policy)
HSBC earned below average scores in J.D. Power's 2019 regional credit card customer satisfaction survey. Overall, it ranked last, and performed poorly in categories like communication, rewards, and benefits and services.
HSBC's customer service department is available at 855-806-4664. Customers who need to report a lost or stolen card can call 800-462-1874 24/7. HSBC can also be reached by visiting a branch, by mail, or by tweeting questions and comments to @HSBC_US.
This card’s security standards meet the norm for the industry. Cardholders get 24/7 fraud monitoring and alerts, chip technology and zero fraud liability for unauthorized transactions. It also offers Mastercard's identity theft resolution services and contactless payment.
Fees To Watch Out For
The balance transfer fee on this card is $10 or 4% of the amount of each transfer, whichever is greater. While not the highest such fee on the market, this is still higher than the industry norm of the greater of $5 or 3% of the transferred amount.
If you’re an HSBC Advance or Premier banking or investment customer, the HSBC Advance Mastercard might be worth acquiring for its solid, though hardly exceptional, first-year bonus earnings on travel and entertainment—assuming those are big spending categories for you. The card might also be worthwhile for you if you take advantage of the 0% APR balance transfer offer to enjoy relief from interest on those balances for 12 months. It’s hard to make much of a case for this card after the first 12 months, though. From the second year onward, its rewards rates in select categories drop to little, if any, better than you could earn with a card that offers 1.5% cash back rewards on all purchases. And if you close your HSBC bank or investment account, or allow its balance to drop below the qualifying level, you’re unlikely to get enough value from this card to justify paying the $45 annual fee that will then kick in.
At most, then, HSBC customers should consider using the HSBC Advance Mastercard mostly for travel spending, and pair it with another card that earns flat rewards on other expenses. Or choose another card entirely. In both instances, the HSBC Premier World Mastercard might fit the bill. It offers 2 points per dollar spent on travel (airline hotel, and car rental purchases), a 35,000-point introductory offer, a number of travel benefits, and no annual fee. Another option for HSBC customers is the no-annual-fee HSBC Cash Rewards Mastercard that earns 1.5% unlimited cash back on all purchases and an introductory 3% cash back on all purchases during the first 12 months from account opening (up to the first $1,000 in spending).
Non-HSBC customers can likely earn higher rewards with non-branded cash-back rewards card. The Capital One Savor card, for example, earns unlimited 4% cash back on dining and entertainment, 2% at grocery stores, and 1% on all other purchases. There's a $95 annual fee, but it comes with a $300 cash bonus opportunity that can justify the cost of the card for three years.