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Annoyed by the FIA Credit Card? Here are Other 2% Cash Back Cards

by on August 16, 2011

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When the Schwab Visa was phased out in favor of the FIA credit cards, the nation (well, maybe not) had a collective moment of silence. Those with Schwab brokerage accounts could just have “free” cash deposited on a monthly basis with no points or miles to handle.  And with industry standard reward rates hovering around 1%, this was understandably a very popular card.

In its place came the Fidelity Investment Rewards credit cards, carried by American Express. Unlike Visa credit cards (like, say, the Schwab Visa), AmEx cards have lower acceptance, especially if you travel abroad. Plus, FIA credit card statements are notoriously hard to read: they tell you the minimum payment rather than your current balance, making you more likely to draw out your payments (and thus pay more in interest).

So what’s a poor gal (or guy) to do if she wants a card that gives 2% rewards and still has the benefit of being accepted everywhere? Here’s our list of the other 2% rewards cards that don’t give us tiny, tiny headaches.

Capital One Venture Rewards

The Capital One Venture is one of our favorite credit cards, let alone ones that give 2% rewards. It earns 2 No Hassle Miles per $1 spent, redeemable for a statement credit offsetting travel expenses. It’s got fringe benefits that the Fidelity lacks (like concierge service), and has no foreign transaction fee (the Fidelity’s is 1%). Best of all, it’s a Visa, so you don’t have to carry around a second credit card for places that don’t take your AmEx. It does have a $59 annual fee (waived the first year) but we believe that the convenience, lower fees and signup bonus make up for it. If you want the full gory details, see our take on why the other 2% cards can’t hold a candle to the Capital One Venture.

Discover Escape 

The Discover Escape is like the CapOne Venture Rewards lite. It too has a 25k-mile signup bonus, but it’s paid out at a rate of 1,000 miles over 25 months, so you have to keep the card awhile. Its annual fee is nearly the same at $60, but it isn’t waived the first year. It charges a 2% foreign transaction fee, and has the acceptance of, well, a Discover card. We think it pales in comparison to the no-annual-fee Fidelity AmEx, and definitely suffers in comparison to the waived-foreign-transaction-fee-instant-gratification-bonus-no-first-year-fee Capital One Venture Rewards.

Can you do better than 2%?

If you’re a luxury traveler, you’ll get great value out of the Starwood American Express, which we believe actually gets better than 2% rewards. It earns 1 Starpoint per $1, and 2 Starpoints per $1 spent at Starwood Preferred Guest hotels. But we value Starpoints at 2.3 cents each, so your effective rewards rate is actually 2.3%. Redeem your points right, and you could get as much as 5% value on all your purchases! The Starwood AmEx comes with a host of perks, too, like the giving you a night free at the Sheraton if you spend 2 or more nights there. Its annual fee of $65 is waived the first year, and right now, it has a killer bonus of Earn up to 25,000 bonus points: 10,000 after your first purchase and another 15,000 after you spend $5,000 within the first 6 months of Cardmembership.. Did we mention the Fidelity doesn’t have a signup bonus?
While the Starwood Preferred Guest card is a great deal for travelers, it’s less useful if you don’t stay at the hotel chain. You can redeem your points for airline miles on a number of carriers, but your points will be worth 1.25 cents apiece, lowering your rewards rate below 2%. That said, if you stay at Starwood’s hotels, you can’t do better than this.

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  • Sprucedon

    Travel credit cards are not cashback credit cards. Neither are point cards. None of these cards are actual replacements, and honestly they don’t seem like good travel cards either…

  • Jimbobka

    Just a note – I got the Venture card and am very impressed. I got it during the promotional which matched my Delta miles, so it came with 110,000 points! The points are aimed to use for airline tickets, but you can get gift cards as well which really are the same as cash. Not quite as convenient as the FIA card depositing cash directly into the Schwab account, but very easy to redeem points for cash cards, so the full 2% is for real.

  • Miguel

    Why wasn’t the Fidelity card mentioned? Or the Sallie Mae?

    • http://www.nerdwallet.com/ Tim

      Hey Miguel, the Fidelity card is the first card we mention above. And the Sallie Mae card isn’t a 2% card as far as I can tell, the one offered on their site only pays 1%, plus 3% on gas and groceries (but only up to $200 in purchases a month).

  • Fexpinc

    So sad to see the Schwab card go — the replacement BoA card is no comparison. Not memtioned above is the Fidelity Signature VISA card. 1.5% cash back first $15k 2% cash back after that (annual) with no reward limit. Schwab card had no foreign transaction fees Fidelity does.

    • Vchip2321

      I use the USAA credit card when traveling. It is worth the 1%. Twice I have had trouble with a foreign transaction and both times they have had it removed. I was very impressed. Worth the 1%

  • finfife

    Two months after this article was posted, Discover announced that it would be dropping their foreign exchange fee to 0% in November 2011. It looks like that’s happened, according the their FAQ:

    Will I be charged a transaction fee when I make a purchase in a foreign currency using my Discover card?

    No, Discover does not charge a foreign currency transaction fee.

    No exception noted for any of the various Discover cards, so I suppose this change applies to all of them, including Discover Escape.

    Acceptance overseas is still rather limited. Check their map to see if their network has made inroads into where you’re headed.

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