Recently, Fidelity announced the release of its new Fidelity® Rewards Visa Signature® Card. It replaces the Fidelity American Express card that had become very popular. Th new cash-back credit card option may be the flexible rewards card you’ve been looking for.
Fidelity Credit Card Review–The Basics
This easy-to-use cash back card offers unlimited 2% cash back on every purchase, every day. With no categories to worry about, this card is simple to use for racking up cash-back rewards. You’ll know exactly what you earn each time you swipe.
Plus, if you have an eligible Fidelity investment account, your cash-back rewards can be automatically deposited into the account.
Earning and Redeeming Rewards
To earn rewards, all you have to do is use this card. The 2% cash back is unlimited and won’t expire at any time. Redeeming rewards is easy too, and you’ve got a couple of options available.
Redeeming for Savings
One redemption option is to have your rewards automatically deposited into one Fidelity account, or even to divide your rewards amount up to five Fidelity accounts. Eligible accounts include a brokerage account, a Cash Management Account, a Fidelity-managed 529 College Savings Plan, or a retirement account.
You can choose ahead of time how to split up your rewards among these accounts, and you can even deposit rewards into a loved one’s account. For instance, you can put rewards into your child’s 529 College Savings Plan, your brokerage account, and your spouse’s retirement account. As long as the accounts are eligible, your rewards can be split up to five ways and automatically deposited each month.
When you contribute to an IRA or 529 plan, your contributions will count as current-year contributions. If you’ve already met your maximum contributions for the year, you’ll be liable for any additional contribution taxes. So, it’s important to keep tabs on your Fidelity investment accounts if you opt for this card.
Once you’ve maxed out your investments for the year, re-allocate your automatic 2% cash back contributions so that you’re not running into any additional taxes and fees.
If you’re worried about issues like these, you can just allow your points to accumulate throughout the year, and then take your contributions on demand. Once you’ve accrued at least 5,000 points, you can log into your online account to move the cash back funds to the appropriate Fidelity accounts.
One caveat: You can’t use your points to open a new Fidelity account. You’ll have to open the account first and meet the applicable minimum investment amount. Your points won’t transfer to an account that’s not adequately funded.
Redeeming for Points
As with many credit cards today, the Fidelity® Rewards Visa Signature® card offers points-based rewards, too. You’ll earn points at the same 2% rate. You can then redeem those points for travel, merchandise, gift cards, or statement credit.
Again, these points don’t have a cap nor do they ever expire.
One interesting new benefit that we’ll likely see more of in the future is that this card is enabled for Apple Pay, Samsung Pay, and Android Pay. This can take some of the worry out of using your credit card in stores or online, as it can protect your credit card information from merchants and hackers.
For even more security, the card automatically comes with EMV chip technology, helping to protect you from in-store fraud when you make purchases.
It also includes:
- $0 annual fee so you don’t have to worry about out-earning a fee with this card.
- Zero fraud liability so that you’re not responsible for any unauthorized purchases, so long as you report them in a timely fashion.
- Travel and shopping offers including hotel and transportation discounts, best rate guarantees, beverage credits, and special offers.
- Visa Signature Concierge which gives you access to 24-hour assistance with booking travel, booking tickets for concerts, and more.
Other Rules and Fees
As with all credit cards, this one includes certain rates and fees that apply. The fees for this card include:
- 3% cash advance fee with a minimum of $5.
- 3% convenience check fee with a $5 minimum.
- 3% balance transfer fee with a $5 minimum and a $2 minimum interest charge whenever interest is due.
- 1% foreign transaction fee for all transactions in foreign currency.
- Variable APR of 14.24%, depending on creditworthiness.
2% Cash Back
Very few cash back credit cards offer 2% back on every purchase. While the Fidelity Visa is one of them, there are many people who do not have a Fidelity account or don’t want their cash back transferred to a Fidelity account. For these folks, here are several 2% cash back alternatives:
- Citi Double Cash Card: You get 1% on every purchase + 1% when you pay for the purchase.
- Capital One Venture Rewards: You earn 2 miles on every dollar spent.
The fact that this card offers unlimited 2% cash back on all purchases makes it a good option for everyday spending. If you’re using another card to catch a higher cash-back amount on certain categories, this one could fill in on other spending categories, allowing you to earn as much cash back as possible.
Being able to invest your cash back is a great deal, too. Just be sure that you check with your tax advisor to see if your cash back contributions to investment accounts could be taxable. And be sure to stay on top of your account maximum contributions, so that you don’t have to worry about over-contributing and paying subsequent taxes.
With its balance transfer fees and foreign transaction fees, this isn’t a great card for a balance transfer nor for the frequent traveler to use overseas. But it’s a good everyday-use, domestic card.
If you’ve already got a Fidelity account that would qualify for this credit card, consider using it as your everyday use credit card. Earning 2% cash back even on utilities payments, car payments, and other everyday bills could really save you some extra money in your retirement or 529 account by the end of the year!