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Why is Fidelity Amex the only 2% cash back?

Frequent Contributor

Why is Fidelity Amex the only 2% cash back?

Actually I suspect that Fidelity is somehow reimbursing or paying FIA for this co-branded card, because it is the only 2% cashback card after the died Priceline card. Jus like their unlimited ATM reimrubrsed and no currency transaction fee no AF Debit Card, which is very rare. I'm surprised how generous Fidelity is..

Fide Amex 15K | Barclays Reward 3.5K | Citi Forward Student 5K | Discover IT 12.8K | US Cash Reward 6K | GE Paypal 5.5K | Wal Discover 6K | CapOne 3.5K | Kohl's 0.3K
Message 1 of 7
6 REPLIES
Established Contributor

Re: Why is Fidelity Amex the only 2% cash back?

I just looked on the back of my fidelity debit card for the cash management account it says its issued by PNC lol


w20031424 wrote:

Actually I suspect that Fidelity is somehow reimbursing or paying FIA for this co-branded card, because it is the only 2% cashback card after the died Priceline card. Jus like their unlimited ATM reimrubrsed and no currency transaction fee no AF Debit Card, which is very rare. I'm surprised how generous Fidelity is..


 

Capital One Quicksilver- $5,400 | Chase Freedom - $8,000 | Chase Freedom Unlimited- $13,000 | Chase Amazon -$5,000 | Priceline Visa -$10,000 | US Bank Cash+ - $18,200 | Fidelity Visa -$10,000 | Sallie Mae- $10,000  | DCU Platinum $12,000 | Discover IT - $10,000 | Amex EveryDay - $25,000  | Amex BlueCash Everyday- $9,800 | Citi DoubleCash - $18,000 | Sapphire Preferred- $13,000 Freedom Unlimited$7,000 Blispay$12,000 | Chase Sapphire Reserve- $18,000 | Consumers Credit Union Visa Sig Cash Rebate$25,000

Message 2 of 7
Highlighted
Valued Contributor

Re: Why is Fidelity Amex the only 2% cash back?

R.I.P. Priceline Rewards Visa!! Smiley Sad

Message 3 of 7
Super Contributor

Re: Why is Fidelity Amex the only 2% cash back?

The 2% card is good marketing strategy to get people to know about, or even sign up for, fidelity investments. Even if they are reimbursing FIA or whatever is their arrangement, their main purpose is to direct customers to fidelity products, which makes the lion share of the profits.

Charles Schwab used to have a card like this as well.
JPMorgan Palladium (100k), AmEx Platinum (NPSL), AmEx SPG (46k), AmEx BCP (42k), Chase Sapphire Preferred (47k), Citi Prestige (31k), Citi Thank You Preferred (27k), Citi Executive AAdvantage (25k), JPMorgan Ritz-Carlton (21k), Merrill+ (15k), US Bank Cash+ (22.5k), Wells Fargo (12k), Bloomingdale’s (12.4k), Chase Freedom (5k), Discover IT (5k).
Message 4 of 7
Blogger

Re: Why is Fidelity Amex the only 2% cash back?

I won't be surprised if BofA terminates this card by the end of the year. It is obviously not bringing in much profit, if at all.

Message 5 of 7
Frequent Contributor

Re: Why is Fidelity Amex the only 2% cash back?

no please

It's clearly our go to card when we cant use a gifts card purchased from  a 5% category card.

Sams Club Discover Advantage+ grades up to 2% after 10k.  It's $100/yr, $40 of which is SamsClub membership.  But getting $10k on that card in no longer a no brainer with all the rewards chasing we do now spreading spending over more cards now.

 

I give Fidelity plenty in trading fees. 

FICO EX 827, 2015 Feb; FICO EQ 836/900 (Citi), 2014 Dec; FICO TU08 818, 2015 Feb.

BofA Cash Rwrds Sig V 2013 10k; Fidelity Rewards AmEx /BofA 2013 15.4k; Chase Freedom Sig V 2002 24.1k; Chase Amazon Rwrds Sig V 2011 8k; Sam's Club MC 2002 10k; Dscvr It 2012 10k; Citi Dvdnd Plat Sel V 2013 8.9k; PenFed Plat Rwrds V 2013 20k; AmEx Blue Sky 2013 11.3k; AmEx BCP 2014 24.1k; Priceline Rwrds Sig V 2013 8.7k; PayPal Xtras GE Cap Plat MC 2012 5k

Message 6 of 7
Super Contributor

Re: Why is Fidelity Amex the only 2% cash back?

This may last (though it didn't for Schwab), since it's a lost leader for Fidelity.

 

Fidelity's main business is to attract AUMs where they derive a small fee for services.  A small fee for a large amount is the best of all business models, e.g. Samuel Walton, Costco, Amazon.  If the 2% attracts more sticky (limit the churners) AUMs, Fidelity can even take a loss on the rewards, which is why they're also offering 50K UA Miles for anyone who funds a new brokerage account with $100K.

 

Every business will offer something at less than cost to attract and be able to cross-sell customers other more profitable products and services.  

 

PS - Fidelity isn't the only one.  If you're in CA or Hawaii, checkout the JCB Murakai at 3% cashback which runs on the Discover network in NA.

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