Tuesday, February 21, 2012

The Best Rewards Card on the Market - Fidelity AMEX 2%

My favorite card by far is the American Express Fidelity Card. The card is administered by FIA Card Services which is owned by Bank Of America. The card gives you 2% back on all purchases. In many instances the card will offer rolling 5% on certain categories. The most recent that I received was 5% on all restaurants. If, and only if, you are able to manage your account so that it is paid off each month this is the best deal in town. Considering CD's are sub 1% this card is amazing. AMEX is always going to be able to offer better rewards because it has one distinct competitive advantage. They own their own network. So where Citi or Capital One is forced to pay Visa or MasterCard a transaction fee AMEX does not. They can make a card like this profitable on transaction costs alone.

I use this card for recurring services such as cell phone, cable, netflix (at least until I cancelled), and so on... Additionally, f you use this for general expenses it is easy to charge 1k per cycle. This equates to $20 per statement or $240 dollars a year. I'll take $240 a year for doing nothing out of the ordinary any day. Last year I received north of $600 into my Fidelity IRA by making this my primary card. Opening a Fidelity IRA is very easy and they allow about 25 transaction free ETF's via BlackRock's (previously BGI's) iShare brand. This means there are ETFs to purchase fee free for as little as 30 dollars.

If you can pay off the balance each month this is a true win win all around. Card Summary below More details here:

You have the choice of sweeping your rewards into your investment account, IRA or 529 college savings plan. And there's no annual fee.

Credit Rating Required
•Good to excellent (700+).

About the Fidelity Rewards American Express Card

•Generous cash-back rewards that go into your investment account or 529 account. However, if you are just looking for cash you can link this to a Roth IRA. All dollars can be withdrawn from a Roth IRA if they are not dollars that have been earned from an investment return.

•No limit on rewards earned.
•Points can also be redeemed for cash, travel, gift cards and merchandise.

•Must have excellent credit to quality. (700+)

•Two points per dollar on all purchases.

•13.99% on purchases.

•0% for first seven months on balance transfers, then the purchase rate.

•Penalty APR: none.

•No annual fee.

•Balance transfer fee: 4% of amount.

•Late payment fee: Up to $35.

•Returned payment fee: Up to $25.

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