The Cascade card is a new prepaid card that lets you earn up to 100% (or more) cash back on non-PIN transactions. You know the saying “if something seems to be good to be true, it probably is?” Let’s see if we can’t prove that saying right.
Contents
The Basics
Before we delve too far, let’s try to understand the basics of this card. For me the biggest is that the card actually isn’t available yet. If you go to “get your card” you can reserve a card.
- You must spend at least $350 per month in non-PIN transactions to receive cash back
- Account is FDIC insured
- No credit check involved
- New account fee of $6.99
- Monthly fee of $4.99
Fees
The Cascade card comes with the following fees:
Loading The Account
You can load your Cascade card with the following methods:
Earning Cash Back
Now the part everybody has been wanting for, how do I get 100% cash back on my non-PIN purchases!? You can watch this “informative” video from Cascade to get some idea of how the program works:
Basically you need to spend at least $350 per month on non-PIN transactions per month to be eligible for cash back. You’re not eligible for cash back until you’ve earned at least $350 per month for three consecutive months.
Every person you refer also becomes part of your CashBack Crowd, the people they refer also become part of your CashBack Crowd and so do the people they refer, this keeps going for a total of six levels deep. To simplify things, the more money your referrals (and their referrals) spend the more cash back you’ll eligible for.
It’s actually possible to earn more than 100% cash back by becoming a diamond member (more on this here).
You have to pay taxes
The F.A.Q states that you must pay taxes on your earnings and they’ll send out a 1099 form at the end of the tax year.
Our Verdict
This seems like a good old fashion pyramid scheme (although they say they aren’t, they also say they aren’t a MLM scheme), the more people you refer the more you receive. I’m sure they’ve structured the cash back in a way that they always turn a profit on the interchange fees. If you’re at the top of the pyramid and have a lot of referrals (and they refer a lot of people) I’m sure you can get some money out of this program, but in reality you’re really just taking money from your friends/referrals. Let me give an example:
- You refer three people and they all refer three people each, you’ll have the following amount of referrals in each tier:
- Tier One: 3
- Tier Two: 9
- Tier Three: 27
- Tier Four: 81
- Tier Five: 243
- Tier Six: 729
- That’s a total of 1,092 people spending $350 per month minimum, for a grand total of $382,200. If you put that spend on a 2% cash back card it would total $7,644. Instead you’d earn $343.98 or 98.28% cash back.
- Cascade will also earn $5,449.08 in monthly fees from your referrals
Now obviously this doesn’t take into account that people in tier two-five will also receive cash back from their referrals, but it also doesn’t take into account that some people will spend under $350 per month and thus not be considered an active referral and some people will spend well above $350 per month.
I’d recommend staying well away from this card, as always: if it’s too good to be true, it probably is! Am I missing anything? Let me know your thoughts below.
Hat tip to Maximizing Money
