Should you apply for the Fidelity credit card… or not?
Over the years we have seen quite a shake-up when it comes to brokerage credit card offers. During the Great Recession and the tough economy that followed, some were discontinued or had their rewards reduced. However the Fidelity credit card offers never went anywhere and continue to offer some pretty solid rewards.
Update: There is now a card that offers an even higher rewards than Fidelity… you can get 2.2% on all purchases. Go here to learn more about it.
There are actually two different cards from Fidelity. I’ve updated this review for 2014…
Fidelity Investment Rewards Visa Signature (no annual fee)
- For annual spending up to $15,000 you will earn 1.5 points per dollar.
- Once you’ve reached $15,000 in spending in a given year, you’ll start earning 2 points per dollar.
There is no cap on the amount of rewards that can be earned.
When it comes to redemption, the most common choice is to convert your points to cash that can be deposited into the accountholder’s eligible Fidelity account. Every 5,000 points = $50 which means it’s 1 cent per point when going this route. Fidelity accounts that are eligible for reward deposits include:
- Cash management accounts
- Brokerage accounts
- 529 accounts managed by Fidelity
- Individual retirement accounts (IRAs)
Fidelity Investment Rewards American Express (no annual fee)
This Fidelity credit card is similar to the Visa version, except that it doesn’t have tiered rewards:
- For all purchases, you’ll earn 2 points per dollar
Like the Fidelity Visa card, the points can be redeemed in the form of a direct deposit into eligible Fidelity accounts (see the list above). Since this credit card gives a straight 2 points per dollar on spending, it can be thought of as a 2 percent cash-back credit card if the points are redeemed via direct deposit. Cash management accounts essentially work like checking accounts, so you’ll have easy access to your reward money.
*Warning: If the rewards are deposited into an IRA or 401k account, than that will count towards the annual contribution limits set forth by IRS, so keep that in mind!
The Fidelity cards have some of the most generous rewards out there. The Fidelity Visa Signature card is slightly less rewarding, due to its tiered rewards structure, but it still earns you slightly elevated rewards. Still, it probably makes sense to apply for the American Express version, which offers a higher rebate (2 percent on all spending). The only drawback I can think of when it comes to the Fidelity credit card is that you will need to have a Fidelity account in order to apply.
If you do not have a Fidelity account but like the idea of getting 2 percent rewards, I would recommend you check out these alternatives:
Updated July 22, 2014