Recently, a friend of mine recommended me to try out a Fidelity Rewards American Express Credit Card. If you never heard of this card before, you are not alone. I have never seen this card being advertised on television or online, and the only reason I heard of it before-hand was because I have an IRA retirement account with Fidelity. So why get some obscure card nobody ever heard of it? One simple but very important reason: 2% cash back on any purchase any time. All with no annual fee. Most likely that's double the rewards you been getting with your other credit cards. So if you are charging $20,000 (very reasonable amount) a year on your card, that's extra $200 a year in your pocket. Is there a catch? Well, not really, but there are some hoops you have to jump through in order to establish an account. However for many people those hoops might be worth itHere's how it works. First you can sign up for a credit card here. You would also need to open either a Fidelity cash management account, brokerage account or IRA retirement account. While I had an IRA account already, for most people I would recommend opening a cash management account. Basically it's just a fancy name for a bank account, since it's insured by FDIC up to $500,000. The good thing about it is that Fidelity does not have a minimum balance requirement to open or to maintain your account. That means you can put in there as much or as little money as you want. That's pretty much it, as far as the hard part goes.
After you linked both accounts (credit card and cash management) together you can start earning points. When you earn enough you can convert your points into cash and deposit it into cash management account or you can set up a monthly automatic point conversion on the credit card website. I recommend doing just that so you would not forget. Both things are fairly easy to do. To find out more about the card and the linking process you can read Fidelity Rewards FAQ here.
So if 2% cash back on any purchase is one huge PRO, what are the CONS? There are couple of things that you might want to consider before signing up.
First of all, this card is on American Express card network, not Visa or MasterCard. While it's not a big deal in the United States, if you travel a lot to other countries you will find out that AMEX is not as widely accepted everywhere else as in America. However, I wouldn't recommend using this card at foreign countries anyways due to foreign transactions fees that would you be charged when using this card. There are several other good reward cards (mostly from CapitalOne) that carry no foreign transaction fees. For some of my favorites, see my previous blog post on cash back sites and credit card rewards.
The other negative is customer service. I personally have never had a problem with this card myself but judging by some other reviews I found online, the customer service of the card issuer have been quite slow to respond to a lot of inquiries. I have also seen complains about random charge denials that happen from time to time. A friend of mine who I spoke to didn't mention any of these things as a problem, so I guess it varies from person to person.
So what's the final verdict? If you type of a person who values customer service more than anything else or travel a lot on business, this card might not be for you. For most of us, however this handy card with great 2% cash back could be our main credit card for most of our everyday purchases.
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