Fidelity Rewards American Express Card Review

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Cash back cards are very attractive, for obvious reasons.   With them, you are not invested in proprietary loyalty program that can be devalued at a whim.   To the contrary, your cash rewards can earn earn interest for you over time.     For the longest time, 1% was the standard cash back reward, with higher percentages for purchases with the card’s branded affiliate.

Then, things started to get a little complicated.   Some cards offered double cash back in certain spending categories, while others required you to reach spending floors before higher rates of back rewards kicked in.   I prefer to keep things simple, most of the time, and have a cash back card with a flat rate for all purchases.    The Schwab Visa has been the benchmark among flat rate rewards cards, delivering a phenomenal 2%.    It has recently come to my attention that another card, the Fidelity Rewards American Express offers Schwab some serious competition.   Let’s see how it stacks up.

Reward Formula

With this card, you accrue 2 points for every dollar spent.   When your total equals 5,000 points, you may have the points automatically converted into a $50 credit into any of your accounts with Fidelity Investments.

Eligible Accounts

These include brokerage accounts, IRAs, and 529 college savings accounts.

Fees

There is no annual fee.    The Standard Variable APR is 13.99%.   There is a 0% APR on balance transfers for the first six months, however, there is 3% fee on balance transfers in the introductory period, that goes to 4% afterwords.   The foreign transaction fee is specified in the Cardholder Agreement, which is not posted on their website.    Other American Express cards charge a 2.7% foreign transaction fee.    I must add that if you plan on carrying a balance, you probably should not be looking at a reward card.

Other Benefits

There are some travel rewards and merchandise gift certificates that are available for purchase with your points, however, it is difficult to imagine that they are of greater value than cash.

Some Drawbacks

The terms and conditions includes language that says that you will forfeit points if the card is closed by either yourself or themselves.    Since their reward system requires that you spend $2,500 before getting $50 cash back, you are risking up to $50 of rewards at any one time.     That is probably an acceptable risk for most people, unlike cards where the reward are distributed annually.

Verdict

Simply by the fact that the card is an American Express, it has a few disadvantages when compared to the Schwab Visa card.   For one, it is accepted at fewer locations than a Visa card.    Also, the 2.7% Foreign Transaction fee means that you are getting a “negative reward” of .7% whenever you use your card to make purchases in a foreign currency, and possibly with transactions in Dollars with a foreign company.    On the other hand, most people find American Express Card Member Services to be superior in areas such as merchant disputes and car rental insurance.

Getting beyond the Visa/Amex distinctions, this card is very similar to the Schwab Visa.    The rewards are so good, that it is possible that neither company is making much money on these offerings.    These cards exist to attract people to their respective brokerage services.

While some predict that the Credit Card Bill of Rights will mean the end of reward cards, it is my firm belief that affiliate cards like these will become more popular in the future.   It is a win-win for both the cardholder and Fidelity Investments.

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7 Responses to “Fidelity Rewards American Express Card Review”

  1. shaam Says:

    IMHO the VISA card from Schwab is superior with a lower interest rate (mine is currently at 13.24% but I don’t really care as I pay the balance off), no Foreign Transaction Fee and flat 2% Cashback, which can be cashed out every month instead of waiting to reach a certain level. I visited Canada recently and this Card came in really handy. The Conversion rate they provided for Canadian Dollars was very close to the posted Bank rates.

  2. chuck Says:

    The foreign transaction fee is actually only 1%. Plus, amex is a bigger status symbol than visa, and it has superior customer service.

  3. Lyng Says:

    I called Fidelity to clear up some issues that I had:
    1. This card is issued by FIA Card Services and runs on the Amex network, and
    2. The customer service, rewards, etc is offered by FIA Card Services – not Amex.

    The only 2 parts where Amex comes into the pictures is that transactions go through their network and cardholders can use their travel locations.

  4. Bob Says:

    I’ve used Fidelity Amex for about 8 mos. and have found it to be excellent. FIA (old MBNA now owned by B of A) customer service is exceptional. Their call centers are in the United States! When I had a problem transferring reward to Fidelity account after the card was opened Fidelity and FIA reps did a three-way call with me to fix the problem (software glitch on their end).

    I did apply for and get the comparable Schwab card before I knew about Fidelity Amex. (I’ve always had Fidelity brokerage, retirement accts., etc). When I got the Schwab card I opened a Schwab account just to collect the rewards. The whole process was more trouble than I wanted to put up with. For someone with a Schwab acct. already, that card obviously is best bet. And I admit, Visa is more functional than Amex. However, I think purchase protection is better with Amex (even the FIA managed acct.) than with even Visa Signature, which is what Schawb is.

    Fidelity Amex is now my daily use card because of the 2%. I hope that doesn’t go away. I do have to carry a backup Visa for the relatively rare instances when Amex isn’t welcome.

    Finally, I think a card that is co-branded with a financial institution such as Fidelity or Schwab is likely to offer a higher level of customer service than others. I say this because FIA/B of A does not need the headache it would get from antagonizing Fidelity/Schwab customers who might think they’re dealing with Fidelity/Schwab. In other words, FIA needs to keep its business partner Fidelity/Schwab happy and, by extension, their customers.

  5. Chris Says:

    I have the Fidelity for about 6 months and another added benefit through their rewards program is cashback at 2% if you redeem for $250+. I can pretty much get my money back through a check than going through an investment account.

  6. Anita Says:

    I am a new cardholder of the Fidel Amex Rewards Card. Found out in the papers they sent that FIA is the issuer and administrator and Amex and Fidel have little to do with the card. No disclosure in their “pre-approved” letter on anything about FIA. Searched FIA on the internet and found it to be the old MBNA, which is now owned by BofA. At the same time found a lot of consumer complaints and bad services, which got me worried. Then I found this website specifically talking about Fidel Amex Rewards Card, where users seem to be very happy with the card.

  7. Not Mr Jones Says:

    @Chuck:

    “status symbol” — holy smokes. I had no idea people are still trying to keep up with the Joneses after these past two years. The ONLY people that win when you try to chase status are the banks.

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