American Express has joined with Fidelity to offer three rewards cards to help cardholders save more money. Each card is designed to reward cardholders with 2% cash back deposited directly into a linked Fidelity account. Each card offers unlimited rewards with no annual fee.
Fidelity offers three cash rewards cards, depending on the type of Fidelity account cardholders want to link to the credit card. These account types are a 529 plan, a Fidelity IRA, or mySmart Cash Account® or brokerage account.
It is important to keep in mind that all IRA and 529 plan contributions resulting from the card will be considered current-year contributions. The ability to contribute to an IRA or 529 college savings plan account is subject to IRS rules and specific program policies, including those on eligibility and annual and maximum contribution limits.
One of the benefits of this Card is that you can direct your rewards points to a friend or family member’s Fidelity-managed 529 Plan account. Friends and family members can also link their 529 College Rewards Cards to your account.
To the extent that you are not eligible to make an IRA or 529 plan contribution or have already made your maximum IRA or 529 plan contribution for the year, any additional contributions can subject you to IRS excise taxes. Fidelity warns that it is the cardholder’s responsibility to ensure that any deposits to a linked Fidelity account are eligible contributions and do not violate the terms of a cardholder’s Fidelity account, applicable IRS contribution rules, or limitations or other applicable laws or regulations.
Before depositing cash rewards into a linked account, however Fidelity will check to verify whether a cardholder has reached their maximum contribution amount with Fidelity for that year. If Fidelity determines that a customer has fully contributed to his or her Fidelity IRA(s) accounts for that year or reached the maximum contribution limit on his or her Fidelity 529 account, Fidelity will not accept the points transfer, and the customer’s points will continue to accrue. Customers can continue to let points accrue until the next year, or they can redeem these points for other merchandise or travel.
How are points redeemed into a Fidelity account?
Fidelity American Express Cardmembers earn 2 points for every $1 spent in net retail purchases. Customers can choose to have their points automatically redeemed for cash into their eligible Fidelity account, or choose to accrue points and redeem them on demand at any time. Customers must earn a minimum of 5000 points to have them redeemed into a Fidelity account. Once you have reached 5000 points, they can be converted at a rate of 1% (1 point = $0.01) into the eligible Fidelity account you designate. Deposits will be sent via the Automated Clearing House (“ACH”) Network into your designated Fidelity account(s).
As an added benefit, cardholders can choose to redeem their points for travel with no blackout dates, gift certificates, brand name merchandise, or other items.