With the ending of the Schwab card, 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… that way I can see the growth of this rewards money. 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?)
In terms of catches, there are no only minor ones. First, to get your 2% value the money must be deposited into a Fidelity account. It appears that their new Fidelity Cash Management account has no opening minimum, but if you want to make some trades the Fidelity brokerage account you will need $2,500 to open that (no ongoing minimum balance requirement). I would open your Fidelity account first to make sure you have no issues.
Second, the rewards only come in $50 increments:
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).
So a $49 rewards balance = $0 in your pocket. It will roll over each month until the balance goes above $50, when the entire thing (i.e. $62.54) will arrive in your Fidelity account. Then the $50 hurdle kicks back in.
Finally, it is an AmEx and not a Visa/Mastercard, but I’ve found the number of merchants accepting American Express much improved since 10 years ago although there are still gaps in areas like utilities, insurance, and small mom & pop restaurants and stores. No annual fee.