The Fidelity Rewards Visa Signature credit card offers more than just a flat 2% cash back; it includes additional benefits like 6% cash back on travel bookings, TSA PreCheck credits, and the potential for significant investment growth on rewards. This blog post delves into the card's features, redemption strategies, and long-term value compared to other credit card options.
The Fidelity Rewards Visa Signature credit card is often recognized for its straightforward 2% cash back on all purchases. However, this card offers much more than just a flat cash back rate. In this blog post, we will explore the card's features, the best ways to redeem rewards, and how it can potentially provide greater value through investment.
At its core, the Fidelity Visa is a simple cashback card that provides unlimited 2% cash back on all purchases. However, it also offers enhanced rewards for specific categories. Notably, cardholders can earn 6% cash back on hotel bookings and car rentals made through Fidelity's travel portal. This feature is often overlooked, making it a valuable aspect of the card for frequent travelers.
Unlike many credit cards that reduce benefits over time, Fidelity has consistently added perks to this card. Some key benefits include:
While the Fidelity Visa is primarily viewed as a 2% cash back card, there are various ways to redeem rewards, and not all methods provide equal value.
When redeeming points for cash back or depositing them into an investment account, cardholders receive the full 2% value. However, redeeming points for gift cards can significantly reduce their value. For instance, a gift card for American Eagle may only yield 0.5 cents per point, effectively halving the value of your rewards.
Purchasing physical merchandise with points is also not advisable. For example, redeeming points for an Apple computer could result in a valuation of 0.47 cents per point, which is far less than redeeming for cash.
While the travel portal offers the potential for 6% cash back, redeeming points within the portal often results in lower valuations, typically ranging from 0.75 to 1 cent per point. The best strategy remains to convert points into cash and invest them.
One of the most compelling aspects of the Fidelity Visa is the ability to invest your cash back rewards. By linking your card to a Fidelity investment account, you can turn your spending into investable money.
Cardholders can choose to automatically redeem points at the end of each month or manually redeem them once they reach a minimum balance of $25. The key is to select a Fidelity fund for the deposit, allowing your rewards to grow over time.
Investing your cash back rewards can significantly increase their value over time. For example, if a typical American spends $34,239 annually on credit card purchases, they would earn approximately $576 in cash back each month. If this amount is invested in a money market account earning 4%, it could grow substantially:
If invested in a stock market ETF with an average return of 8%, the growth would be even more impressive:
This demonstrates how the Fidelity Visa can effectively transform a simple 2% cash back card into a card that yields over 3% in value when considering investment growth.
Deciding whether the Fidelity Visa is the right card for you depends on your financial habits and preferences. Here are some considerations:
The Fidelity Rewards Visa Signature credit card is more than just a 2% cash back card. With its additional benefits, potential for investment growth, and straightforward redemption options, it can be a valuable tool for those looking to earn cash back while also investing in their future. Ultimately, the best choice depends on your individual spending habits and financial goals.
