You may have seen commercials recently for the “Fidelity Investment Rewards American Express credit card.”
I did, which is why I chose to sign up and write this credit card review.
Update: This credit card is now known as the “Fidelity Rewards Visa signature Credit Card” since being offloaded by American Express and acquired by Elan Financial Services.
Those who previously had the Amex version were automatically given a Visa replacement version of the card.
However, as far as I can tell the card benefits haven’t changed outside the Visa vs. American Express brands and their associated benefits.
You still earn 2% cash back on every purchase, which can be deposited into your associated Fidelity investment account, which is the main takeaway of this card.
2% Cash Back on All Purchases with Fidelity Investment Rewards
At first glance, it looks like a pretty solid rewards credit card, what with its 2% cash back on all purchases.
That beats the industry average of 1% cash back, which is an obvious plus. You also don’t need to worry about rotating categories that offer higher percentages of cash back, such as those seen on the Chase Freedom credit card.
So it’s a no fuss cash back credit card. But what makes the cash back even sweeter is that it can be deposited into your Fidelity account, whether it’s an IRA account, a college savings account, or a brokerage account.
For every $2,500 in purchases you make, you can set the card up to automatically deposit $50 into your designated Fidelity account(s).
If you have multiple Fidelity accounts, you can split the money up and send it to all of them (or just one or two).
This is clearly the main draw of the cash back on the Fidelity Investment Rewards American Express credit card.
Not only do you get a solid percentage of cash back, it goes toward your future (or your child’s), instead of simply offsetting your credit card purchases, or worse, being spent the minute you receive it.
Hypothetical Fidelity Investment Rewards
Fidelity has a nifty little calculator on their website that lets you calculate how much your spending with the Fidelity Investment Rewards American Express card could earn.
Using their default example of $12,000 in annual spending ($1,000 a month), you’d earn $240 in cash back rewards each year.
If the same amount was invested every year and earned a rather conservative 4% return, it would be worth $2,916 in 10 years.
So you can see how the cash back can really add up, especially with no limit on the rewards you can earn.
It’s not enough to send your kids to college, at least using their example, but you have to remember that this is “free money” on top of your regular investments.
Not a bad deal for simply using your credit card.
For the record, you can also convert your spending into WorldPoints Rewards, which can be used for things like travel, merchandise, or cash.
Let’s Talk About Rates and Fees
The Fidelity Investment Rewards American Express credit card has no annual fee, a 1% foreign transaction fee (which beats the standard 3% average), and up to a $35 late payment fee.
The credit card APR for purchases is a relatively low 14.24%, which can vary based on the Prime Rate. So expect it to climb higher in the future as the economy gets back on track.
It also comes with 0% APR on balance transfers for the first seven billing cycles, but the 4% balance transfer fee makes that option pretty unattractive.
The Fidelity Investment Rewards American Express credit card also comes with the standard bells and whistles, including zero liability fraud protection and travel and car rental insurance.
All in all, it’s a great credit card for someone looking for better-than-average cash back rewards without any hassle, the ability to build their retirement savings, and a level of customer service offered up only by American Express.
Why I Use the Fidelity Visa Card
If I actually use the credit card in question, I’ll always let you know. And the Fidelity Amex is actually my go-to credit card because of the handsome 2% cash back on ALL purchases (assuming I’m not taking advantage of a rotating 5% category).
I combine it with cash back portals and the Isis Wallet to earn even more money back. And I love the fact that the money goes straight toward my retirement, which should boost the effective rate of return I earn for my credit card spending.
Understandably, this won’t work for everyone, namely those without Fidelity accounts, or those not interested in boosting their retirement accounts.
it’s an Amex (now a Visa), meaning it isn’t accepted everywhere. So if I want to earn 2% cash back, I might opt for the Citi Double Cash card in situations where only Visa and MasterCard are accepted.
Again, this product switched from Amex to Visa, so merchant acceptance should no longer be an issue.