I have 12 credit cards, but my favorite is one of my most boring cards.
As a personal finance journalist who has a healthy-ish obsession with credit cards, most of my cards have a specific role to play in my spending strategy. I’ve got cards for dining out, a card for rotating cash back categories, and cards for regular retail purchases.
But not all of my purchases perfectly track to a given credit card in my wallet. And that is where my current favorite credit card comes into play. I’m talking about my Fidelity® Rewards Visa Signature® Credit Card*.
My Fidelity card isn’t the flashiest card. It doesn’t earn travel rewards that pay for cool vacations. It doesn’t get me lounge access at airports. It’s plastic, so unlike the cool metal cards it doesn’t make a satisfying sound when you drop it on a table.
It doesn’t do any of those fun credit card things people talk about on TikTok, but I still love it dearly. Because what it does do is even more important to me.
Why I love the Fidelity Rewards card
The Fidelity Rewards card earns a flat 2 percent cash back on every purchase, which is as simple a cash back structure as you can get. It has no annual fee, the points never expire, and there are no cash back caps or category restrictions.
Credit card pros will tell you how important it is to make sure a credit card aligns with your existing everyday spending. That’s easy with this card.
The card’s value breakdown — a staple of any good credit card advice article or review — makes the upside clear.
Imagine $2,000 in spending every month. It could be toward groceries, shopping, gas — anything you can use a credit card for. At a 2 percent rewards rate, that’s $480 per year in cash back. But it’s what happens next that’s special.
You can set up your Fidelity card to automatically transfer your cash back to a connected Fidelity investment account. I have mine paired with a traditional IRA, but you can just as easily connect it to a Roth IRA or any other kind of Fidelity account that makes sense for you and your investment strategy.
Seeing my cash back periodically going straight into my account is the best. As soon as I see the email saying cash back was deposited into my money market account, I can use those funds to purchase new shares of my favorite low-cost index fund.
And that is where compound interest does its thing. Let’s round up that $480 to a clean $500 for illustration’s purposes, earned annually over the next 5, 10, and 20 years. Here’s how much that money grows in the stock market over the long-term at an estimated 8 percent annual return (very reasonable based on the stock market’s historical average return of 10 percent).
| Annual cash back deposited | Total after 5 years | Total after 10 years | Total after 20 years |
|---|---|---|---|
| $500 | $3,168 | $7,823 | $24,711 |
This is the math that keeps drawing me back to my Fidelity card lately. Just for fun, let’s look at how much this card is worth for someone spending closer to $4,000 per month.
| Annual cash back deposited | 5 years | 10 years | 20 years |
|---|---|---|---|
| $1,000 | $6,336 | $15,645 | $49,423 |
That’s thousands of dollars in wealth generation over the years, purely from using a credit card for purchases I’d be making one way or another.
However much or little you spend, the Fidelity card has a lot of value potential. But as it is with any credit card, it’s worth noting this value hinges on paying off the balance in full and on time every month. And remember not to spend beyond what you can pay back each month, as that 8 percent stock market return won’t hold up to the compound interest you’ll be charged for balances carried on a card with a 20 percent APR.
Other Fidelity Rewards card perks
Like other popular credit cards, the Fidelity card has other offers and perks that might enhance its value even further. I haven’t personally tapped into these secondary aspects of the card, but it’s worth calling out a few:
- Special offers on travel, plus lost luggage reimbursement and travel protection
- Shopping and dining offers
- 24-hour concierge service through Visa Signature Concierge
- ID theft protection
- Emergency roadside assistance
- No foreign transaction fees
These perks are decent, but probably aren’t as good as what you can get with other cash back or travel cards. It also doesn’t have an intro APR, sign-up bonus, or a vast catalog of special cash back offers like other popular cards.
This isn’t a big concern for me — in part because I already have other cards with a variety of extra perks for when they make sense. But it’s also because I simply prioritize the Fidelity IRA contributions I get with this card.
Other credit cards that pair well with my Fidelity card
My Fidelity card is definitely my main squeeze right now, but I do have a few other cards I regularly use for specific types of purchases. The idea is simply to maximize my cash back and/or purchase discounts.
Here are the other cards I’m regularly using and how they do better than the Fidelity card for certain types of purchases:
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Before I got the Fidelity card, I was primarily using three Chase cards: the Chase Sapphire Preferred® Card, the Chase Freedom Unlimited®, and the Chase Freedom FlexⓇ*. I like the Chase Ultimate Rewards portal, and primarily use these points to pay for nice hotels on family trips that I wouldn’t typically spend cash on.
All three of these cards get 3 percent cash back on dining, plus the Flex has rotating categories throughout the year I use for 5 percent cash back on things like gas or groceries (on my first $1,500 in spending per quarter, after which I earn 1 percent back). Since the cash back rate I get with these cards on dining or other rotating categories is better than the Fidelity card’s 2 percent cash back, I still use them regularly.
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Like many people, I have a regular flow of Amazon packages coming to my home. I also occasionally shop at Whole Foods. I use my Prime Visa card because it gets 5 percent cash back on all these purchases. This cash back goes toward future Amazon purchases, so I typically save it up all year and use it around the holidays for gifts.
Pro tip: Rather than using the points for new Amazon purchases, I use them as statement credits so every purchase earns new points.
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My Citi® / AAdvantage® Platinum Select® World Elite Mastercard®* is what I use for every airfare purchase my family makes. I live in Charlotte, North Carolina, and I hate indirect flights. That means I’m pretty much always booking with American Airlines. I use this card for those purchases to support my AAdvantage status and earn miles that pay for future flights.
To be clear, this card is similar to Fidelity’s 2 percent cash back rate in that it earns 2 points per purchase. But I like using it for airfare because it helps me maintain frequent flier status and I like using award miles for flights when I stack up enough.
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I’m a typical suburban dad type with a wife and two kids, which means there is plenty of regular spending at Target and Lowe’s. Both of the co-branded cards from these stores activate an automatic 5 percent discount on purchases, so we use them exclusively for purchases at these stores and nothing else.
I also recently got the Verizon Visa® Card* because Verizon gives me an automatic $20 bill discount for using this card on autopay for the two phone lines my wife and I have there. I saw this card once when it came in the mail, but otherwise it hasn’t left my filing cabinet as the only purchases it makes are the monthly Verizon bills.
I have several other cards that are still active but which I don’t use in any regular way. Two of my oldest credit cards come out twice a year for nominal purchases just to keep them active, but otherwise live in a drawer. Since average credit account age is a credit score factor, I want to keep these old cards active even though there is nothing special about their rewards that justifies using them.
The bottom line
Credit card strategies can be as simple or complicated as you’d like them to be. What’s important is it works for you and fits with your regular budget and spending habits. There are endless combinations of credit cards you can use to maximize cash back. There are also great credit cards that can be the only one you have if that’s what fits best with your own approach.
It’s also worth pointing out that your credit card strategy can change from time to time. Mine certainly has, and I expect it will again in the future. It can be a good habit to check in on your credit cards and spending periodically to make sure your cards make sense – especially if any of them have annual fees that might no longer be as worthwhile as they have been in the past.
*The information about the Fidelity Rewards Visa Signature Credit Card, Chase Freedom Flex, Citi / AAdvantage Platinum Select World Elite Mastercard and Verizon Visa Card has been collected independently by Bankrate. The card details have not been reviewed or approved by the issuer.
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