This site is part of an affiliate sales network and receives compensation for sending traffic to partner sites, such as CreditCards.com. This compensation may impact how and where links appear on this site. This site does not include all financial companies or all available financial offers. What is written in the article is the editor's opinion.
Sorry for the hyperbole slash clickbait-y title. I thought I was being on trend.
But seriously, I love this card. I’m close to being obsessed with it:
- Cut the Crap: The Fidelity Investment Rewards Credit Card is THE BEST cash back card!
- The 10% Plan: Save 10 Percent of Everything You Make
- One More New Credit Card: Fidelity Investment Rewards American Express
We all love our points and miles. But I’ve been reading about straight cashback cards for a sec now, and the poor Fidelity Amex always gets swept under the rug.
Well no longer. This card is a gem. It has so much going for it. And it might just be the ace in the back pocket of cashback cards, which by default makes it the best cashback card in the universe.
In This Post
- 1 Let me extoll the ways
- 1.1 It’s an American Express card not issued by Amex
- 1.2 It’s a fascinating little card
- 1.3 It doesn’t have an annual fee
- 1.4 Rewards are tax-free and can grow tax-free… forever!
- 1.5 It happens automatically
- 1.6 It has a signup bonus right now
- 1.7 It will age your credit reports
- 1.8 It has promos… sometimes
- 2 The cons
- 3 Bottom line
Let me extoll the ways
Here are a few things this card has going for it.
It’s an American Express card not issued by Amex
That’s pretty rich right there because you can use it to load up your Serve account. There are no cash advance fees and Serve reloads code as a purchase. Load up $1,000 a month and get a smooth $20 for free. After a year, that’s $240 for a few minutes of effort.
Now that REDbird is dead, take the free money!
The fact that it’s an Amex also makes it eligible for Sync offers, Small Business Saturday, and Amex purchase protection.
It’s a fascinating little card
An American Express card issued by a Bank of America subsidiary and linked up to Fidelity? What?! I’d love to know how this card was born.
I’m pretty sure that Bank of America will eventually manage this card. They have a few other Amex cards that they issue, so that’s not news. What is puzzling though is that Bank of America offers many of the same services that Fidelity does (brokerage accounts, IRAs, checking accounts). By having this card, they would essentially deflect business away from their own products, which is bizarre. I don’t claim to understand it, but I do find it fascinating.
It doesn’t have an annual fee
The Barclaycard Arrival Plus is $89 per year. It’s a fine card, has a portal whereas the Fidelity Amex no longer does, and the redemption is mad easy, which is great. But for me, not having an annual fee and being able to earn an easy $240 far outweighs the portal and the points redemption in 1 category.
I won’t even mention the Discover It cards, or the Citi Double Cash. There’s really no comparison as they are straight cashback cards whereas the Fidelity Amex has something far greater.
Rewards are tax-free and can grow tax-free… forever!
Really think about this. This really blows my mind. This is the ace in the hole right here.
You are earning free money that you never pay tax on when you contribute it to a Roth IRA, which you also never pay tax on. Roth IRAs are supposedly funded with post-tax money, meaning you’ve already paid the taxes to the government, and then you don’t pay taxes when you withdraw it.
But that’s the kicker. You never pay any sort of tax on the Fidelity Amex rewards. It’s free money, unfettered by taxes, and the rewards can be auto-swept into a Roth IRA, which will also grow tax-free for perpetuity (until you withdraw it).
That has got to be the single biggest and most valuable draw for this card.
Even if all you do is load up your Serve account, you’d have over $10,000 after 20 years @ 7% growth, which is really realistic actually.
$240 a year for 20 years is $4,800. But by investing it, you come out with nearly $11,000. That’s more than double the cash that can be withdrawn tax-free. Assuming these calculations all hold, this 2% cashback card suddenly comes a lot closer to being a 5% cashback card, which is awesome. The catch is that you have to wait 20 years. So you really have to think about Future You vs You Right Now, which is hard for some people to conceptualize.
But also consider that if you’re maxing out your Roth IRA this year, $240 for free and untaxed is a nice extra – especially if you’re funding it with mostly post-tax money.
And that’s only assuming $1,000 per month with Serve reloads. You can obviously spend more on the card and can add up to $5,500 this year to a Roth IRA.
It happens automatically
This cannot be overstated. Your rewards, once you reach 5,000 points, are auto-swept into your Roth IRA (or checking or brokerage) account. You set it up once and it just… happens. No effort on your part. You can, of course, change it at any time. But if you set it up once and forget it, it happens for you without any extra steps required. Automation is powerful.
It has a signup bonus right now
Yep, a $50 signup bonus.
It’s not huge or anything, only $50, but that’s $50 more than you usually get for opening this card.
Also, the minimum spending requirement is only $500 and you have 60 days to do it. You could knock that out with 3 days of Serve reloads and then pocket that cashback, too.
It will age your credit reports
Since it’s a no annual fee card, you can feel good about holding on to this one forever. The longer you have it, the more it will help to age your accounts and improve your credit score.
I’d recommend using this with Serve while the getting is good, but even when that goes away, you can still hold this card and it’ll help you even if you never use it again.
It has promos… sometimes
FIA, the issuer of this card, is so cute. They try to have promos and spend bonuses sometimes. They’re usually nothing to write home about, so it’s cute in the little-engine-that-could kind of way.
But who knows, one day they might run a really awesome promo… and give you more free money to invest tax-free.
Gasp! There are cons?! Well, yeah. But they’re not terrible, actually. Here’s what I’ll say. FIA makes it hard to MS. They flag everything as fraud. In the Vanilla Reload days, I got it to the point where I could go to CVS without fear of them flagging it, but it took many calls and a little time.
Also, it has a foreign transaction fee. It’s only 1% and earns 2% cashback on everything, so you get 1% back when you use it internationally. But it’s not a good prospect. There are better cards to travel with. But still, 1% is better than using a debit card.
The cashback thing might not last forever. At present, it’s been extended until early 2016 and then? Who knows. It’ll most likely be renewed, but there are no guarantees.
Still, I feel like FIA will want to maintain this product. And I’d also like to be grandfathered in if they ever change the core offering of the card in any way.
Ah, the FIA Fidelity Amex. I love this card.
When I’m not using points and miles credit cards, or the Barclaycard Arrival, meeting a minimum spend, or taking part in a promo, sure… I’ll throw a little spend on this card to earn some free money that will grow tax-free and eventually be withdrawn tax-free after taking advantage of sweet, sweet compound interest for 30 (or so) years.
And that reason alone is why this is the best cashback card in the universe.
So what do you guys think? Is this card awesome or am I drinking the Kool Aid? Does anyone else like this card as much as I do?
BEST Current Credit Card Deals
- Chase Sapphire Reserve - 50,000 Ultimate Rewards points - My review of this card.
- Discover it® Cashback Match™ Card - $50 after 1st purchase within 3 months of account opening - Why I love this card!
- Hilton Ascend Amex - 100,000 Hilton points - Why I picked up this card.
- Chase Hyatt card - 40,000 Hyatt points and a free night at a Category 1 through 4 hotel each year on your cardmember anniversary - Here are 5 great hotels to redeem your free night!