Tuesday, March 3, 2009

Fidelity Amex 2% Unlimited Cashback Credit Card Vs. Charles Schwab Visa

Update: Here's a working link.

Here's a card that I missed when writing the Credit Card Rewards post the other day. I updated that post as well, so make sure to read it.

The Fidelity Investment Rewards American Express Card, a no annual fee credit card, offers 2% unlimited cashback on all purchases! The way you get the cashback is, once you spend $2,500 dollars, they will deposit $50 into a linked Fidelity account.

If you don't have a Fidelity account, then you can open the mySmart Cash Account for Fidelity to deposit the cashback money into. The account is totally free. There is no minimum opening amount and you don't need to maintain a minimum balance. This account is very similar to a checking account. They give you free checks, and postage paid envelopes if you want to make deposits. They even pay (very low) interest on money in the account! You can transfer money online back and forth to non-Fidelity bank accounts as well.

You also get a free debit card, which you can use to take out money from most ATMs anywhere in the world for free, as long as the ATM has a Visa or Plus logo. Fidelity will even automatically reimburse any fees you are charged by the other bank at the end of every day!

Now, at first I got real excited. An Amex card that gives 2% unlimited cashback?! I would jump on it! But, don't get too excited, because this card is not really an Amex card. It is an Amex branded card, but the benefits of the credit card (car rental insurance, extended warranty, disputes etc.) are not handled by Amex, so for all intents and purposes you won't be getting an Amex. You will only have the downside of Amex cards, which is that the card won't be accepted anywhere that Amex isn't accepted.

There is another card that offers 2% unlimited cashback, the Charles Schwab Visa, which I wrote about in the Credit Card Rewards post. So, if you are looking for a great credit card to use for purchases that you don't need the benefits of an Amex, then get a 2% cashback card! You will just have to decide between this card and the Charles Schwab card. Here are the benefits of both cards, so you can make a decision as to which card to get.

Both cards give you unlimited 2% cashback, which is great!
They also both reimburse any fees from other banks for withdrawing money with the debit card. And they both make you open a second account to have the money deposited into.

That being said, here are the main differences I found between the two cards:


- Opening the mySmart Cash Account does not take a second credit inquiry.
- ATM fees are reimbursed at the end of every day.
- I like the way the mySmart Cash Account looks.
- Has the problems of Amex (not accepted all over) without the benefits.
- When using the card overseas, you will be charged a foreign exchange fee (anywhere up to 3%, I'm not sure exactly how much. I will let you know when I find out)
- You get the cashback only once you spend $2,500.

Charles Schwab:
- Its a Visa, so accepted almost anywhere.
- No foreign exchange fees.
- The 2% gets automatically transferred every month, no minimum required.
- Opening the brokerage account takes an additional inquiry (besides for the inquiry for the card).
Could be an issue for credit card churners. They seem to be checking Experian.
- ATM fees are only reimbursed at the end of every month. Might be an issue for you, if you make lots of ATM withdrawals a month.

Bottom Line:
In my opinion, Charles Schwab is the better choice for most people. If you don't want the second inquiry, or you already have a Fidelity account then you might prefer the Fidelity card.


Anonymous said...

the charles schwab card you have to make a deposit of 1000$ when you open the charles one account???

Anonymous said...

actually, you only need the $1000 deposit if you don't link to the credit card. with the credit card the minimum is waived. (even with the minimum, you can withdraw it the next day)

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