Fidelity Investments American Express – 2% Flat Cash Back
With Schwab out of the mix now, Fidelity Investments is the only brokerage offering 2% cash back on all purchases on their Fidelity Rewards American Express cards. There are three flavors, depending on if you want the money deposited into a Fidelity taxable account, an IRA, or a 529 college savings plan. I personally have mine deposited into a 529 although I don’t think Fidelity’s 529s are the best… only $50 to open, no annual account fees, and tax-deferred growth for the kiddos! An IRA would be too confusing for me due to the stringent contribution limit rules. (If you’ve maxed out the limit, they say that they will automatically defer the rebate until the next year. But what if you have a partially phased-out limit due to income, and your limit is reduced to $2,350? How would they know that?)
However, since Fidelity started offering $7.95 trades and free iShares ETF trades, the taxable brokerage account option might be more attractive. You need $2,500 to open a Fidelity brokerage account, but after that you can take everything out with no minimum balance requirements.
I’ve found the number of merchants accepting American Express in the US to be pretty good these days, minus some small mom&pop food shops. You accrue rewards $50 a time, which can be redeemed automatically. From the Terms and Conditions:
Customers earn 2 points for each $1 in net retail purchases. Once you reach 5,000 points, they can be redeemed automatically or on demand for cash at a 1% exchange rate into an eligible Fidelity account (i.e. 5,000 points = $50 deposit).
By Jonathan Ping | Credit Cards, Deals & Offers | 6/11/10, 12:54am
June 11th, 2010 at 4:18 am
Have this card and love it. Have it linked to mySmart Cash account – which is really a checking account with free usage of any ATMs.
Also got the Fidelity Visa version of this card that earns 1.5% back for places that don’t take Amex.
Highly recommend.
June 11th, 2010 at 7:30 am
I do the same as TJ and these are my “go to” cards, but my 1.5% card is a Fidelity MC, not Visa (I’ve had it for several years). I do the auto redemptions into my brokerage account. The only times I stray from these cards are when my “Discover More Cash Back” offers a 5% rebate on categories I use…like this month Discover is offering 5% cash back on restaurants, clothing and hardware stores.
June 11th, 2010 at 7:58 am
All of my purchases go through this card as well. I’ve run into maybe 1 or 2 restaurants in my city that don’t take AmEx. I have the rewards going into my IRA. The concern about the contribution cap is valid and I actually had an overage of a few dollars this past year because they did not cap it properly. I had to fill out an adjustment form a couple days before April 15th when I realized what had happened. Not a big deal, but a little bit of needless stress. So yes, you do have to pay attention once you’re getting up near the contribution limit.
June 11th, 2010 at 12:01 pm
Did I miss something? Why is Schwab out of the mix? Mine is still paying 2%…
June 11th, 2010 at 12:32 pm
@Dan – Schwab is not longer accepting new applications for that card. Congrats on being grandfathered in.
June 11th, 2010 at 5:20 pm
You scared me for a second thinking I was losing my 2% CB on Schwab. Good to know it’s still there!
June 11th, 2010 at 8:17 pm
The only thing is with the Fido, you have to spend $2500 before you get $50 cashback. I believe the Schwab was instant?
It would be a long while before I put $2500 on the Fido so I think after I hti that first redemption I might switch to Penfed and take the instant 1%….but I love the Fido for it’s billapy whcih lets me pay virtually everything but my mortgage (no points, but extra month, and all conveniently in one login…)
June 12th, 2010 at 3:28 pm
One thing to note – for whatever it’s worth to you – is that this isn’t really an American Express card. AmEx has licensed their brand out to FIA Card Services, which is the card servicing company owned by Bank of America. Thus, if you already have a Bank of America credit card, and you apply for (and are accepted by) this one, it will likely reduce your credit availability on your other Bank of America credit card. Take it from me – it happened. Also, your online credit card payments must be done through the FIA Card Services web site, not the American Express credit card web site. So… take it with a grain of salt. I do not expect to receive the same level of customer service that I would with my “real” American Express cards, as compared to this one, because I will never actually receive customer service from an American Express employee. Rather, the card is serviced entirely by FIA Card Services, a Bank of America company.
June 15th, 2010 at 11:48 am
@Doug A:
I applied and was accepted for the Schwab VISA right before they closed the application. My limit on my existing Fidelity VISA did not change.
While I agree American Express rocks the customer service, I’ve also received excellent customer service from FIA Card Services every time I’ve called about my Fidelity Rewards VISA. It is, however, annoying that the only way to set up automatic payment of the balance every month is to call and request a paper form to fill out and mail back. AMEX was late to the game here, too, but they’ve had an online form for this for 1.5 years.
June 15th, 2010 at 12:44 pm
I’ll chime in for Fido AmEx card as well. I have received pretty good service from FIA folks, my only two gripes are the website availability (has been down way too many times late at night when I tried to log in) and confusing payment interface on the website (twice in the last six months I apparently set it up to pay minimum amount instead of full when I was under impression that I paid it in full).
I just returned from Puerto Rico and was surprised at the number of places that did take AmEx there – there were signs pretty much everywhere saying “AmEx cards welcomed here”. I would say I had about 80% success using the card in the continental US.
One more thing to consider – Fido Visa (1.5% rebate) allows you to use ShopSafe to generate a one-time use (sort of) number to shop online, etc. You cannot do it with Fido AmEx.
June 16th, 2010 at 4:19 am
…and now I have to correct myself. FIA Card Services now has an automatic payment option for the full balance due available from the website. I’m not sure when the option was added, but it referred to as a “new service”.
June 30th, 2010 at 8:06 am
I applied for this card on your recommendation and was turned down. I have never been refused credit before in my life. I have been a Fidelity customer for over 20 years and my credit score is over 750.
August 5th, 2010 at 7:13 pm
I have had this card for awhile and i love it! I put everyone on it. I managed to save 50,000 points and got a nice check for 500 bucks. I was pretty pumped. This card is great. The fiacardservices website is very easy for making payments and if you treat this card like a debit card and pay it off before any fees accrue. Its like getting 2% off everything.
August 5th, 2010 at 7:13 pm
everything* not everyone lol
August 18th, 2010 at 6:21 am
I’ve been using the Fid Amex and depositing rewards into my Roth for about 18 months now. This is my main card and I love it. The FIA websit is great, much better than B of A website, imo. I like the fact that it’s very uncluttered on the transaction summary page and the fact that transactions post as pending with merchant name as soon as card is swiped. This is the only card site I’m aware of that does this.
My only fear is that the reward will be cut or the card discontinued. The closing to new apps for the Schwab is not a good sign. Has anyone heard anything?
November 3rd, 2010 at 11:36 am
Just got this card in the mail yesterday to replace a Bank of America AMEX that pays 1.25% cash back. Does anyone know how much the foreign transaction fee is?
December 17th, 2010 at 11:55 am
I just started using my FIA Card and have a question:
Can anyone explain in plain detail how depositing the rewards into a Roth IRA vs. a Regular IRA will affect my taxes? (I am not rich enough to have a reduced contribution limit, and can’t manage to contribute the full $5000 ($10000 if you include my wife) to either in a year) Also, please refer to where you get your information.
My confusion is: if I put it in a Roth, do I have to pay income tax now on the rewards?
Or maybe I have it wrong, and there would be no tax penalty for putting it in the Roth, but if I put it in the regular IRA, I could deduct that amount from my income?
If the 2nd case is correct, then I think getting this card is a no brainer (as long as you pay the balance in full every month). If the 1st case is correct, then it still is a good deal, but it might make more sense for me to put it into a regular IRA, so I can keep my taxes straight.
May 16th, 2011 at 9:28 am
Hello again. I reapplied for this card and was approved the second time. I finally figured out the real reason I was declined the first time. I had a block on my credit report that I had forgotten about, and FIA didn’t bother to tell me this, they just quietly declined my application.
June 2nd, 2011 at 1:17 pm
(David – the same thing happened to me re: credit freeze. At least you know that your credit freeze works!)
Doug A: Yes, when we had AmEx-branded cards (Costco + Delta Skypoints), we got good customer service from AmEx — that is, until we didn’t. When we REALLY needed AmEx dispute resolution to protect us from an ethically-challenged merchant, they didn’t. Even tho’ we appealed, AmEx said, “As this is a contract between you and the merchant, AmEx can neither nullify nor negotiate the contract on your behalf.” My magical thinking that the AmEx brand will protect me is GONE. We have swtiched to the Fidelity AmEx through FIA. The rebate is easy to dump into our Fidelity account.
July 24th, 2011 at 3:13 pm
Is the cash back in lieu of membership rewards?
July 24th, 2011 at 5:09 pm
@bill – yes.
July 31st, 2011 at 1:43 pm
Hi – I just got this card but I’m curious, how do I link mysmartcash account to the fidelity amex so that once I have 5,000 points I can turn it into $50 in my smart cash checking? Any help here would be great. I’ve searched online but found just general answers – no specific detail on how to link the accounts. Thanks!
August 2nd, 2011 at 6:38 am
Can anybody help???
January 13th, 2012 at 1:31 pm
This card is a piece of crap. Every time I travel to a different state, they block purchases. In other words, they put the burden of security on you by embarassing you in front of merchants and friends, yet charge the merchants the same fee as other cards. I would avoid this if you travel.
February 6th, 2012 at 11:39 pm
I love this card. I use it for everything, including my tuition for my schooling which helps me get my rewards that much faster. I pay this card off in full every month except this month because my interest free period expires in a few months so I am not worrying about it. I have it linked to a mySmart Cash Management account but I am considering switching it to am IRA, Roth, or a 529 since I have a long ways to go for school. I love the FIA Card Services website. Simplicity but concise platform. Any suggestions on which is best would be greatly appreciated.
Adam, I believe I did it through the fidelity page first, not on the FIA Card Services website. I could be mistaken since it was a while ago, but if it is not available as an option on the FIA Card Services website, try checking your mySmart Cash Management account’s portfolio summary. At the very bottom of mine is a Credit Cards tab which you can usually use to set up those auto transfers. If not, here is the customer service number for FIA Card Services I have used with much luck in the past.
FIA Card Services Customer Support
1-800-655-1491
June 10th, 2013 at 12:50 am
I must reinforce what earlier comments have said re: the poor customer support and terrible website for this card. American Express is typically known for good customer service, especially while traveling, but this card is for some reason different from other American Express cards. I regret bringing it as a card when I travel because the card was blocked and then I could not get through on their customer service line to get it fixed.
I have also had trouble with their online payments, for which the interface is clunky and not user-friendly at all.
This may be an ok day to day card, but don’t rely on it at all if you travel!