Correction

First lets start with a correction. Several people have wrote me to say that the Schwab rewards card, which returns two percent back, actually deposits the money in Schwab bank, which is FDIC insured. My appologies for the confusion.

Fidelity Investments Joins The Reward Card Club

Like Schwab, Fidelity has just created a new reward card. Like Schwab, this card returns a fantastic 2% return on your spending. This one differs from Schwab in that your rewards are placed directly into your IRA account. Furthermore, the deposits are treated as tax deductible contributions towards your retirement. On NPR’s Morning Edition today, they pointed out that some critics contend that this is the wrong way to encourage savings. The criticism is that it teaches people to shop more to save more. I think this criticism would be valid for all reward cards. Frankly, if you are tempted to spend more because you have a reward card, you probably shouldn’t have one.

On the other hand, 2% is a pretty minimal contribution to your retirement, although it is better than nothing. Me, I will stick with cards returning something in in 4-6% value travel rewards, and make my 401k contributions after the market bottoms out.

On The Subject Of Investment Bank Reward Cards

Merrill Lynch has a reward card that offers a whole array of benefits. The benefits are in tiers, depending on annual spending. Tier 2 has a minimum $20,000 spending, and has some interesting offerings.

The one that jumps out at me the most is 50% off of two full fare international business tickets on Delta. My quick check of Delta’s fares shows me that this is in fact a significant value. Not only is one full fare ticket less than twice the amount of two regular tickets, keep in mind that you will also get the flexibility of a full fare ticket. Granted, if you are the kind of person who goes around buying business class tickets with cash, not miles, you are probably not a reader of this blog. Just in case we do have people here who have that kind of money to throw around, this is a good deal.

They also offer 10% off American Airlines tickets and %5-%40 of off Delta tickets. The %5 is no big deal, as many credit cards offer %5 cash back on travel and there are Delta American Express cards that also give you 5% discount on Delta. They say that “The deeper discounts may apply to international and unrestricted/full-fare tickets.” Who can say what that really means, although it could be a significant discount on international trips.

You should at least look at their reward offerings here.

Delta And NorthWest Programs Inch Closer

They have finally confirmed what we all knew, that the programs will merge some time next year. They will start by offering voluntary transfers of points, likely from Worldperks to Skymiles. Perhaps now is the time to get a sign up bonus from a NorthWest credit card. I will not be shocked if the card goes away next year.

Wall Street Journal Covers Frequent Flier Point Values

Scott McCartney over at the Journal writes about how airline miles are becoming less valuable. It is an interesting read. I like Scott, he once featured me in an article about how my name got on the TSA’s watch list. I just reread it and apparently I mentioned United in a positive way, Oh my god!

This entry was posted on Wednesday, December 10th, 2008 at 23:06 and is filed under Maximize your Credit Card Rewards. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.