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Fidelity’s Shift From Amex to Visa Is a Plus for Cardholders

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Fidelity Investments is switching its popular 2% cash-back credit card from American Express card to Visa — a shift that will benefit cardholders by giving them more places to use it and therefore more opportunities to earn rewards.

Fidelity announced Jan. 4 that the Fidelity® Rewards Visa Signature® Card will replace the Fidelity American Express. According to Fidelity’s announcement, the new card will be issued by Elan Financial Services, a division of US Bank. Existing cardholders will be transitioned to the new card in mid-2016, Fidelity says; new applicants will get the new card.

Here’s a rundown on what the new card offers and why the Nerds see it as an improvement on Fidelity’s previous offering.

Highlights of the new card

The rewards and fee structures for the Fidelity® Rewards Visa Signature® Card will be largely the same as for the Fidelity American Express. The new card offers 2% cash back on all purchases, which you can redeem for a cash deposit in your Fidelity account(s), a statement credit, travel, merchandise or gift cards. Keep in mind that the 2% rewards value applies only if you redeem it for a deposit in a Fidelity account, which includes brokerage accounts, the Fidelity Cash Management Account, 529 accounts and retirement accounts.

The card’s annual fee is $0, and it charges a 1% fee on foreign transactions (low compared with the industry standard of around 3%). The ongoing APR is 14.74% Variable.

The biggest benefit to cardholders comes from the shift to the Visa payment network. “The switch of the Fidelity credit card’s issuing bank affects consumers in one primary way,” says Sean McQuay, NerdWallet’s resident credit card expert. “The card will now be accepted at 38% more locations because the card will now be a Visa card, as opposed to American Express. To me, this is a big win for an already excellent card.”

On top of that, the new Fidelity® Rewards Visa Signature® Card also offers access to digital wallets, including Apple Pay, Android Pay and Samsung Pay, a feature that wasn’t available through the Fidelity American Express’s issuer, FIA Card Services, a division of Bank of America®.

Next steps

If you’re an existing Fidelity American Express cardholder, sit tight. The announcement says US Bank has agreed to acquire Fidelity’s existing credit card portfolio, which includes the Fidelity American Express. An FAQ posted on Fidelity’s website says you’ll be transitioned to the new Visa-branded card in mid-2016.

If you don’t carry the Fidelity American Express and are interested in the Fidelity® Rewards Visa Signature® Card, using the card as a way to save for retirement or your child’s education isn’t a bad idea. If you want more redemption flexibility, however, consider other cash-back cards before you make the jump.

The Fidelity® Rewards Visa Signature® Card limits its 2% redemption value to cash deposits in Fidelity accounts. While you may withdraw the cash after it’s been deposited, this is an extra step that you can avoid with another cash-back card. The Citi® Double Cash Card – 18 month BT offer, for example, offers 1% cash back on all purchases and another 1% cash back when you pay them off, and doesn’t devalue your rewards if you choose to redeem them for direct deposit, gift cards, a statement credit or a check.

As with any financial decision, consider your goals before applying for a credit card. The Fidelity® Rewards Visa Signature® Card is a good choice if you already have a Fidelity account and are fine with all your rewards going to that account. But if you might want to use your cash-back rewards for something else, you’re better off with another card.

Ben Luthi is a staff writer at NerdWallet, a personal finance website. Email: bluthi@nerdwallet.com. Twitter: @benluthi.


Image via iStock.