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.
Nov 15, 2013 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 four different cards from Fidelity. I’ve updated this review for 2013…
Fidelity Investment Rewards Visa Signature
- For annual spending up to $15,000 there is 1.5 points per dollar given.
- For annual spending which exceeds $15,000 there is 2 points per dollar given.
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 them 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.
Alternately, points can be spent through WorldPoints (Bank of America’s credit card reward program) and used for travel, merchandise, gift cards, etc. However most Fidelity Visa cardholders opt for the investment rewards, since that always gives a full cent per point.
Fidelity Investment Rewards American Express
This Fidelity credit card is similar to the Visa version, except that it doesn’t have tiered rewards:
- For all purchases 2 points per dollar is given
Like the Fidelity Visa card, the points can be redeemed in the form of a direct deposit into an eligible Fidelity account – or – spent on the WorldPoints reward network. Since this credit card gives a straight 2 points per dollar on spending, it can be thought of as a 2% cash back credit card if the points are redeemed via direct deposit.
Fidelity Retirement Rewards American Express
This is extremely similar to the last card:
- For all purchases 2 points per dollar
For every 5,000 points a $50 current year contribution can be made to the accountholder’s Fidelity IRA account. However the points can also be directly deposited into other Fidelity accounts (even those which are not IRAs) so I have yet to figure out what makes this Fidelity card different than the one above, other than the name.
*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! For this reason, it may be better to convert to WorldPoints rather than a cash deposit. But keep in mind that WouldPoints are usually worth far less than 1 cent each.
Fidelity Investments 529 College Rewards American Express
As the name implies, this credit card is geared towards those with a Fidelity 529 account.
- For all purchase 2 points per dollar
Although they call it 529 College Rewards, it doesn’t appear to be different than the last two Fidelity credit cards. Why? Because the rewards can also be deposited into Fidelity accounts that are not 529 plans. The only difference is
The Fidelity cards have some of the most generous rewards out there. The Fidelity Visa Signature card is slightly less due to the tiers, but still way above average. If you apply, obviously it makes sense to apply for the American Express versions which offer a higher rebate. The only drawback I can think of when it comes to the Fidelity credit card is that unfortunately 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% rewards then I would recommend you check out these alternatives: