My Money Blog

(Update November 2024: This card has added a Global Entry/TSA PreCheck credit worth up to $100 every four years. Might be handy for existing cardholders that have this as an idle card. Currently a $150 sign-up bonus for new customers as well. Updated full review below.)

Back in 2019, Fidelity condensed their rewards credit card line-up to a single card, the Fidelity® Rewards Visa Signature Card issued by Elan Financial Services (subsidiary of US Bank). There is currently a $150 bonus if you spend $1,000 in the first 90 days. It earns a flat 2% cash back when directed to an eligible Fidelity Investments account. Here are the highlights:

• Unlimited 2% cash back, when redeemed into an eligible Fidelity account. You could pick a brokerage account, IRA, or 529 plan.
• No annual fee.
• No foreign transaction fees.
• NEW: $100 credit towards Global Entry/TSA PreCheck application fees. Valid once every four years.
• BACK: Secondary Auto Rental Collision Damage Waiver. As with many other cards, this is secondary to your personal auto insurance, but will help cover the deductible if applicable.

Details on the sign-up bonus:

Receive 15,000 Bonus Points – which equals $150 cash back, when deposited into an eligible Fidelity account – after you make at least $1,000 in eligible net purchases withing the first 90 days of account opening.2 Existing or previous Fidelity Visa Signature cardmembers are not eligible for this offer if you have received a new account bonus for this product in the last five years.

Details on the Global Entry/TSA PreCheck benefit:

Receive up to 10,000 Reward Points every four years when you apply for either Global Entry® or TSA PreCheck®. That’s worth up to $100 when deposited into an eligible Fidelity® account,¹ once every four years. Be sure to pay the application fee using your card to be eligible.

Eligible Fidelity accounts. The 2% rewards value applies only to points redeemed for a deposit into the following active Fidelity accounts:

• Fidelity Cash Management Account
• Fidelity Brokerage account
• Fidelity-managed 529 account
• Fidelity Retirement account (IRA, Roth IRA, SEP-IRA, Rollover IRA)
• Fidelity Go account (robo-advisor)
• Fidelity Charitable Giving Account (donor-advised fund)
• Fidelity HSA

My favorite option is actually the 529 plan option if you have kids, because it is the perfect way to quietly grow a little college stash and not just spend your rewards away on a dinner or gadget. Contributions get to grow tax-free with minimal paperwork towards your future college expenses. The IRA option is okay, but you have to be careful to not exceed the annual contribution limits and track your rewards against your other contributions.

I also like that there is an auto-redemption option. You can enable a feature to automatically cash in your points each time it reaches $25 worth and auto-deposit into your 529 plan (or brokerage account, etc). Since the 529 plan will also auto-invest your contribution, it’s all on auto-pilot. No redemptions, no investment decisions, no wasted frequent flier miles, etc.

(Side tip: Grandparents can also set it up to direct their own credit card rewards to automatically redeem into your child’s 529 plan account as well…)

Let’s say you spend $2,000 a month on this card. 2% cash back means earning $40 a month in cash back. Let’s also say you put this into a 529 that earns 6% a year. If you started when your kid was born and waited 20 years until their senior year of college, that would amount to $18,574! I plugged it into this savings calculator.

Concerns? The only main drawback with this card is that it is actually run by Elan Financial, and whenever Fidelity partners with these third-parties, it’s not a perfect match. Elan doesn’t have the same level of customer service as Fidelity, or American Express for that matter. They will give you a harder time with merchant disputes and fraud refunds, for example. I’ve always gotten them worked out in the end, but it took more effort in my experience. I personally wouldn’t want to deal with them on any type of insurance claim.

Bottom line. I think everyone who can handle a cash back credit card (i.e. you carry no high interest credit debt) should have a 2% flat cash back card that applies to all purchases. The Fidelity® Rewards Visa Signature Card can make sense for Fidelity customers because you can set aside your rewards automatically and save money towards a Fidelity 529 college savings or retirement account. I would try to apply when there is a sign-up bonus.