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Updated July 21, 2016

Fidelity Credit Card Review: 2% with No Annual Fee

Editorial Note: This content is not provided by the card issuer. Opinions expressed here are author's alone, not those of the issuer, and have not been reviewed, approved or otherwise endorsed by the issuer.

With unlimited 2% cash back on purchases, the new Fidelity Rewards Visa Signature has some real advantages and perks, but does it deserve a place in your wallet? Let's take a look at the pros and cons of this card and see if it suits your lifestyle.

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To make the credit card it offers more appealing, Fidelity recently switched from the American Express network to the Visa network, which means the new version will be more widely accepted by retailers. Tara Siegel Bernard of the New York Times said the broader acceptance "was one of the big drivers behind the change." In this way, Fidelity is encouraging cardholders to use this card as an everyday card.

So if you're one of those people who wants a card that you can use at most of the places you shop, eat, and travel - and who doesn't? - this could be the one.

Read on.

Editorial Note: Pricing information, including interest rates, rewards, benefits and fees, was obtained on February 9, 2016 from published websites and are believed to be accurate, but not guaranteed.

Want Cash Back? 7 REASONS TO GET THE CARD

© Takashi .M (CC BY 2.0) via Flickr

  1. Earn unlimited points.
    If you use your Fidelity Rewards Visa Signature card often, you can potentially earn a boatload of reward points because you're not limited to how many you can earn. And they never expire. This is a huge plus that can really garner a big payoff when your points are converted into dollars.

  2. 2% cashback on every purchase.
    Considering you'll always get 2 points on every net dollar you spend just by using this card, it's a real winner.

    Other cash back cards make you remember to "enroll" in 5% rotating category card promotions every quarter. And then you'd have to remember to spend under those categories. If you forget to enroll for the bonus or your spending doesn't match the categories, you could earn less than you would with the Fidelity card. The Fidelity Rewards Visa Signature is definitely an "ease-of-use" card if your spending is varied and you find it a hassle to keep track of changing categories.

    Bonus tip: If you're really forgetful, you can set up your account to automatically redeem your points as a deposit into your Fidelity account once you earn enough of them.

  3. You currently have a Fidelity account.
    If Fidelity and you are already tight, this card is perfect for you. Whether you have a cash management, brokerage, 529 college savings, or eligible IRA with Fidelity, you can convert your rewards and deposit it right into your account (it's smarter than turning the points into some other use, like statement credit).

  4. No annual fee.
    With its 2% cash back on every dollar spent, the Fidelity Rewards Visa Signature card potentially bests other popular "no annual fee" cards like Chase Freedom or Discover It, both of which offer 1% cash back on purchases, or 5% back on quarterly rotating categories with a $1,500 spending cap. 2% could be a higher reward rate if your spending doesn't match the categories. For a no annual fee card, this is a very decent reward rate (in general, annual fee cards may result in higher rewards over time, but you'd also have to spend more).

  5. A good bank alternative.
    If your bank charges lots of fees (and high ones, at that), and you're looking for a decent place to put your money, a Fidelity cash management account might work for you, and this credit card could serve as the excuse to open one. There's no minimum balance requirements, no monthly fees, no charge for check writing or online bill paying, and you can deposit all your checks via mobile phone - there's no need to go into a physical branch.

    So if you have the Fidelity Rewards Visa Signature card, you can just transfer your rewards cash directly into your Fidelity cash management account and use it for your banking needs.

  6. Pay by phone.
    If you prefer digital wallets to leather ones, you'll like the Fidelity Rewards Visa Signature card's options. Whether you're an Android or Apple user, you can use the card via your mobile device and keep the plastic at home. Apple Pay, Samsung Pay, and Android Pay are all part of the plan, and they're securely encrypted so the merchant won't have access to your personal information.

  7. Flexible points redemption.
    There's a number of ways you can redeem your points, whether it's for cash or retirement investment. We like that instead of the usual cash back or travel rewards, the Fidelity Rewards Visa Signature card gives you the option of investing your reward too. Your cash back rewards could potentially be worth a lot more down the road (as long as you have the patience).

Let's take a look at all the ways you can use your points.

WHAT YOU CAN DO WITH POINTS

  • Deposit in a retirement account: It's never too early to start putting a little away for retirement, and the Fidelity Rewards Visa Signature card gives you a no-brainer way to do so.

    You can use your Fidelity Rewards Signature Visa to buy plenty of awesome, fun things and still save for your retirement. Use the card to shop, travel, go out with friends, rock out at a concert - and then redeem the points you earn for cash that you simply drop into an eligible Fidelity retirement account.

    Let's say you use your card frequently, so much so that you spend at least $2,500 per month. You'll earn 5,000 points every month, which is the equivalent of $50 ($600 annually). If you're 25 now and you retire at 65, you'll have put away $24,000 into retirement just by using your card to do fun things while you're young (and that doesn't include any money you'll earn from the actual Fidelity IRA investment growth).

  • Deposit in a college fund for your kids: Kids are costly, and if you have them, there's a good chance you use a credit card to pay for the plethora of things they need. So what better way to save for their college education than to use your rewards and deposit them directly into a Fidelity 529 college fund?

    If your kids are very young, this cash can really add up and you'll have accrued a nice amount for books, incidentals, and maybe even a year of tuition for them by the time they're 18 (depending, of course, on how much you use your new Fidelity credit card).

  • Deposit into a Fidelity brokerage account: You may like this option if you're already an investor with Fidelity.

  • Transfer to a friend or family member: If you're already flush with money and don't need the rewards cash yourself, you can have it directly deposited into the eligible Fidelity account of a family member, such as your spouse, or a friend who will no doubt appreciate the goodwill.

  • Deposit into a Fidelity cash management account: Think of this like a normal checking account (without the bank fees). You can withdraw money from ATMs, write and deposit checks, pay bills, and transfer money between your Fidelity accounts. You can deposit your cash back into this account and have it available for use immediately.

  • Redeem for statement credit, gift cards, etc.: Finally, there is the option to redeem for statement credit, travel, gift cards, or merchandise, but we really wouldn't recommend doing so, as the reward rate isn't as great. The 2% rewards value is only when you redeem points for a deposit into an eligible Fidelity account.

5 REASONS TO CONSIDER ANOTHER CARD

© Kylie_Jaxxon (CC BY-SA 2.0) via Flickr

  • No introductory APR.
    This is huge if you know you won't be able to pay off the balance on your new card right away. If you're planning to make a big purchase or a bunch of them pretty soon and need some time to pay them off, this card gives you no breathing room.

    Many cards offer a 0% APR promotion, which can save new cardholders hundreds of dollars on interest during the introductory period if they carry a balance or make a balance transfer. You won't get that with the Fidelity Rewards Visa Signature, which will charge you a variable APR of 14.49% (as of 12/16/2016).

  • Limited to depositing in a Fidelity account.
    If you're perfectly happy with your bank and just want to put your cash rewards into the account you currently have, you'd do better by going with another cash rewards card. With this card, you're limited to depositing it in a Fidelity account at full value.

  • You're loyal to another brokerage firm.
    If you already have investment accounts with another brokerage firm and like your investments and banking all in one place, then the Fidelity Rewards Visa Signature might not be for you.

  • You have to accrue at least 5,000 points to redeem cash rewards.
    Some cards allow you to convert your points or cash rewards no matter how many points you've earned. If you want to make the most of your points and convert them to a dollar amount in one of your Fidelity accounts, you can't do it until you have 5,000 points (the equivalent of $50). You've got to spend $2,500 on the Fidelity Visa Signature card to get that.

    You can, however, redeem your points for a statement credit, gift cards, travel, or merchandise once you reach 2,500 points (after you spend $1,250 on your card), but remember that you won't get as much out of them, so we don't recommend it.

    If you're not a big-ticket credit card user or this isn't going to be your primary card, then this probably isn't your best bet.

  • You can't use your earned points to open a Fidelity account.
    Only current Fidelity accounts are eligible, so in order to take advantage of this cash back card, you'll have to first open an account using your own cash. But you can open a Fidelity cash management account for free with no minimal balance requirement.

HOW IT COMPARES

If you want a similar reward rate but a more straightforward cash back structure:

Intro APR for PurchasesIntro APR for Balance TransferRegular APRAnnual Fee
N/A
0%* for 18 months*
15.24% - 25.24%* (Variable)
$0*

Disclaimer: The information for the Citi® Double Cash Card has been collected independently by CreditDonkey. The card details on this page have not been reviewed or provided by the card issuer.

There's a potential to earn a similar amount of rewards with the Citi Double Cash card. One main perk could be the fact it comes with an introductory balance transfer APR. The Fidelity card does not offer a promotional APR.

The structure of the Citi Double Cash card is different - you earn 1% on purchases, then another 1% as you pay them off. And your cash back is your business with the Citi Double Cash card, as you can do whatever you want with the cash rewards you earn.

If you like the idea of 5% rotating categories for a chance to earn greater rewards:

Intro APR for PurchasesIntro APR for Balance TransferRegular APRAnnual Fee
0% for 15 months
0% for 15 months
16.74% - 25.49% Variable
$0

Disclaimer: The information for the Chase Freedom has been collected independently by CreditDonkey. The card details on this page have not been reviewed or provided by the card issuer.

Chase Freedom: Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate. Enjoy new 5% categories every 3 months. Unlimited 1% cash back on all other purchases. With its quarterly rotating categories, you could earn greater rewards with the Chase Freedom card, depending on how and when you shop. The caveat is those higher-tier categories may not match your spending, and you'll stop earning 5% once you've spent $1,500 in those categories and when the bonus period ends.

For all other purchases, you get a straight 1% back on purchases with the Chase Freedom card. So the Fidelity Rewards Visa Signature might be more beneficial if you want unlimited 2% cash back consistently. Still, you're not limited to carrying just one card, so perhaps during the rotating categories period you can take advantage of the higher cash back rewards of the Chase Freedom card, and you can use your Fidelity Rewards Visa for everything else.

Another possible deciding factor: Chase Freedom offers a 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a 16.74% - 25.49% Variable APR, based on your creditworthiness. Balance transfer fee is 5% of the amount transferred, $5 minimum. There is no introductory APR with the Fidelity Rewards Signature Visa card.

BOTTOM LINE

If you're already a Fidelity customer, there's no question that the Fidelity Rewards Visa Signature is a great option for you due to its 2% rewards per dollar spent. But if you have no intention of taking advantage of Fidelity's cash management program or its investment platforms, you'd be wise to choose another card. There's no introductory APR and you're pretty much limited to putting your rewards into an eligible Fidelity account.

Cynthia Cohen is a retail analyst at CreditDonkey, a credit card comparison and reviews website. Write to Cynthia Cohen at cynthia@creditdonkey.com. Our data-driven analysis has been recognized by major news outlets across the country and has helped consumers make savvy decisions. (read more)

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. This site may be compensated through the Advertiser's affiliate programs.

Disclaimer: The information for the Chase Freedom, Discover it® Cash Back, and Citi® Double Cash Card has been collected independently by CreditDonkey. The card details on this page have not been reviewed or provided by the card issuer.

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CreditDonkey is a credit card comparison website. We publish data-driven analysis to help you save money & make savvy decisions.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed on this page are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.

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