No Longer Fidèle to Chase

So, today’s post is about a new credit card offer that came for me in the mail today. I almost always throw these offers away, but this one caught my eye since I saw a post by Financial Nut about it.

It’s called the Fidelity Retirement Rewards American Express card, and it offers some promising returns. It’s fairly straightforward – you get 2% back on everything you spend.

And I mean everything.

Many credit card companies determine which things are worthy of 2, 3, 4, and even 5%, and then give you 1% on the rest of your purchases. So I really like this about the Fidelity card.

The only catch is that you have to have a Fidelity brokerage account, which my wife and I both do. So it’s a great way to contribute to our Roth IRA accounts. We have a goal to max out our Roth IRA contributions every year anyway, so it’s perfect for us.

Another thing about the card is that they only put the money in once you’ve earned $50 in rewards (or spent $2,500). The only other potential drawback is that it is an American Express card, which isn't accepted everywhere.

Now, up to this point I have been exclusively using my Chase Freedom Visa card. Although they recently changed the rewards program on this card (Thanks FreeMoneyFinance for the update), I bought it back when they were offering 3% cash back in the 3 categories where you spend the most, and 1% on everything else.

The catch with that card is that you only earn 3% on up to $600 of purchases per month. But, they also offer an incentive for letting your rewards build since they’ll award you a $50 bonus once you accumulate $200 in rewards. Naturally, I want to continue using my Chase freedom card.

I wanted to know if it would be worth it to begin using the Fidelity Freedom card alongside my Chase Freedom card. Check this out:

My average monthly expenditures:
Gas $100
Groceries $250
Department stores $150
Entertainment/Dining $100
Other $900 (rent, insurance, etc.)
TOTAL $1,500

Now, I am going to do a little math here. For the purpose of this scenario, I’m going to examine my earnings over a period of 8 months, which puts me right around $200 on the Chase card, earning me the $50 bonus.

Earnings if I use the Chase Freedom Card exclusively:
$600 x 8 months x 3% = $144 rewards
$900 x 8 months x 1% = $72 rewards
$50 bonus for reaching $200 = $50 rewards
TOTAL REWARDS AFTER 8 MONTHS: $266

Earnings if I use my Chase Freedom card for gas, groceries, department stores, entertainment, and dining, and the Fidelity Card for everything else:
$600 x 8 months x 3% = $144 rewards
$900 x 8 months x 2% = $144 rewards (deposited to IRA)
TOTAL REWARDS AFTER 8 MONTHS: $288

The Fidelity/Chase combo strategy wins by $22.

Hey, $22 is $22 and every little bit helps, so this looks like a go for me. Depending on your spending habits, and whether or not you have a Fidelity account, this could be a great option for you – especially if you use it in conjunction with the Chase Freedom card.

Even if you don’t have the Chase card, you'll be hard pressed to find any cards that offer 2% flat on everything. When offers like that do roll around, it probably won't last long. So, overall, I think this sounds like a great find and I'll let you guys know how I like it.

I’d love to hear your opinions on this, so let yourself be heard by posting a comment! Oh, and in case you're wondering about the title, fidèle means "loyal" in French. I thought it was witty. I’m out – YCC