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Fidelity Rewards Visa Signature Review: Feather Your Nest With Credit Card Rewards

Oct. 20, 2016
Credit Cards, Rewards Credit Cards
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Like most financial institutions, Fidelity Investments wants to deepen its relationships with its existing customers. Have a Fidelity 401(k)? Well, they’d like to invite you to open an individual retirement account. Have a brokerage account? Why not open a 529 college savings plan for your kids?

The Fidelity® Rewards Visa Signature® Card is part of Fidelity’s plan to become your favorite financial institution. The card doesn’t cost anything to carry, since its $0, but it still gives you a great rewards rate. Now that Fidelity has ended its partnership with American Express, the company’s co-branded credit card is a more widely accepted Visa, with Visa Signature benefits to boot.

The only catch: To get the highest value for your rewards, you must have them deposited into a Fidelity account.

If you already have an investment account with Fidelity, or plan to get one in the future, it’s worth your while to check out the card’s details.

Flat rewards: No muss, no fuss

Many of us have a friend who whips out a different card depending on what kind of purchase is being made in an effort to maximize rewards. But for many people, juggling multiple credit cards with different rewards rates is too much of a hassle.

A credit card that pays the same rewards rate on all your purchases is a great way to keep things simple. The Fidelity® Rewards Visa Signature® Card pays 2% on every purchase, with no limits or caps.

How does the rewards rate stack up? Earning 2% on everything you buy is not unique. But most other cards in this range make you work a bit harder for it than the Fidelity® Rewards Visa Signature® Card does. For example:

Citi® Double Cash Card – 18 month BT offer: This card pays 1% on all your purchases, and then you earn another 1% when you pay those purchases off. This card does have an advantage over the Fidelity® Rewards Visa Signature® Card in that you can redeem your rewards for cash. There’s no requirement that they be deposited in a specific account.

Capital One® Venture® Rewards Credit CardThis card pays 2 miles per $1 spent. Miles are worth 1 cent apiece if you redeem them for travel, so the card could technically pay a flat 2% on all your spending — but only if you redeem them for travel.

Of course, the Fidelity® Rewards Visa Signature® Card does make you jump through one hoop to get the 2% rewards rate — the requirement that rewards be deposited into a Fidelity account. If you prefer to redeem rewards as gift cards, statement credits or charitable donations, the value is only equivalent to a 1% rewards rate.

Credit card rewards to build wealth

Personal finance personality Dave Ramsey famously said that nobody ever got rich from credit card rewards, but if you’re looking to build wealth, the Fidelity® Rewards Visa Signature® Card certainly doesn’t hurt. Unlike most credit cards, this one is set up to help you save your rewards rather than spend them. It’s also helpful that cardholders can choose which of their savings goals they’d like their rewards to help with. If you don’t want to choose just one, you can have your rewards deposited in up to five different Fidelity accounts — yours or someone else’s. Options include:

  • Retirement. You can put your rewards into a traditional IRA, Roth IRA, rollover IRA or SEP IRA. Although Fidelity does offer 401(k) accounts, you can’t have your Fidelity® Rewards Visa Signature® Card rewards deposited there.
  • College savings. Fidelity manages state-sponsored 529 college savings accounts for New Hampshire, Massachusetts, Delaware and Arizona. Residents in other states are also eligible to open Fidelity 529 accounts.
  • Brokerage account. Even if you don’t have an IRA or a 529, you can have your Fidelity® Rewards Visa Signature® Card rewards deposited into a regular Fidelity brokerage account.

Visa Signature benefits

Because it’s offered on the Visa Signature platform, the Fidelity® Rewards Visa Signature® Card offers a number of extra benefits. You’ll get:

  • Purchase security. Sometimes called purchase protection, this covers the things you buy with the card and reimburses you in the event of damage or theft.
  • Warranty manager service. More than just an extended warranty, this service helps you keep track of the warranties on the things you buy with the card.
  • Auto rental collision coverage. You can waive the collision coverage offered by the car rental agency as long as you pay for the rental with your Fidelity® Rewards Visa Signature® Card.
  • Emergency assistance while traveling. This benefit helps you find local emergency services while you’re on the road.
  • Lost luggage reimbursement. Up to $3,000 in coverage for lost or stolen baggage.
  • Travel accident insurance. Up to $250,000 in coverage if you’re injured while traveling.
  • Roadside dispatch. This pay-per-use service offers towing, lockout service and other emergency roadside assistance.
  • Concierge services, museum and cultural discounts. 

Is the Fidelity® Rewards Visa Signature® Card right for you?

Earning an unlimited 2% on all your spending, with a card whose $0, is a pretty great value. But if you don’t fit the profile for this card, it simply won’t be a good option.

Here are the boxes you’ll need to tick in order to be a good candidate for the Fidelity® Rewards Visa Signature® Card.

  1. You already have a Fidelity Investments account. You can’t use your credit card rewards as an initial deposit on a new Fidelity account. Rewards have to be deposited into an existing account. So if you don’t already have an account with Fidelity, you’ll have to open one up before you can apply for the card.
  2. You have excellent credit. The Fidelity® Rewards Visa Signature® Card is marketed to people with excellent credit — meaning FICO scores of 720 and up. If your credit is good but not excellent, you’ll need to build a stronger credit history before you apply.
  3. You don’t travel much, or you already have a travel credit card. Credit card fans can debate the merits of travel rewards cards versus cash-back cards all day long. But the bottom line is that frequent travelers may want some of the non-financial perks that come with a good travel credit card — priority boarding, access to airport lounges, etc. There’s no law that says you can’t have the Fidelity® Rewards Visa Signature® Card along with a travel card. Check out our favorite travel cards.
  4. You don’t want to spend your rewards. Many people look to credit card rewards to help defray the costs of everyday purchases like groceries or gas. If that’s you, you might be happier with a card that pays higher rewards on those purchases and allows you to take your rewards as a statement credit. Socking away your rewards in an investment account only makes financial sense if you can’t get better value anyplace else.
  5. You can’t get higher rewards elsewhere. There are credit cards out there that pay higher rewards, especially if you’re willing to use multiple cards to maximize your rewards in specific spending categories. But even if that’s the case, you might still be glad to have a card like the Fidelity® Rewards Visa Signature® Card that pays a high flat rate on purchases that don’t match up with your other cards’ bonus spending categories.

If you hit all or most of the five points above (particularly No. 1), the Fidelity® Rewards Visa Signature® Card is a great way to boost your retirement contributions or other long-term savings goals. And if you want to see how this card compares with other cash-back cards, refer to our list of best credit card offers.

Virginia C. McGuire is a staff writer at NerdWallet, a personal finance website. Email: [email protected] Twitter: @vcmcguire.