Fidelity Visa questions

[KJinNC]

I can't decide if this is more of a credit card question or more of a personal finance question ... moderators, please move if I got the category wrong.

I have a Fidelity 401K, which includes both Roth and traditional (probably didn't word that correctly). I also have an HSA managed by Fidelity.

With this card, if I set it to deposit rewards into the HSA, what happens if that takes me above the annual max contribution?

If I set it to deposit into the 401K, does it count as Roth or traditional? Or do I pick, and if so, which is correct?

Just in general, any advice for how to handle these rewards? Thanks!

[Anonymous]

---

@KJinNC wrote:

I can't decide if this is more of a credit card question or more of a personal finance question ... moderators, please move if I got the category wrong.

I have a Fidelity 401K, which includes both Roth and traditional (probably didn't word that correctly). I also have an HSA managed by Fidelity.

With this card, if I set it to deposit rewards into the HSA, what happens if that takes me above the annual max contribution?

If I set it to deposit into the 401K, does it count as Roth or traditional? Or do I pick, and if so, which is correct?

Just in general, any advice for how to handle these rewards? Thanks!

---

I suggest opening a Cash Management account at Fidelity.  It's basically a checking account and includes many of the features you'd expect from a checking account (FDIC insurance, debit card, bill pay, ACH transfers, etc.).

https://www.fidelity.com/cash-management/fidelity-cash-management-account/video 

[iced]

---

@KJinNC wrote:

I can't decide if this is more of a credit card question or more of a personal finance question ... moderators, please move if I got the category wrong.

I have a Fidelity 401K, which includes both Roth and traditional (probably didn't word that correctly). I also have an HSA managed by Fidelity.

With this card, if I set it to deposit rewards into the HSA, what happens if that takes me above the annual max contribution?

If I set it to deposit into the 401K, does it count as Roth or traditional? Or do I pick, and if so, which is correct?

Just in general, any advice for how to handle these rewards? Thanks!

---

I don't have the card, but based upon how the various accounts work, my suspicion is the answer to where it goes is none of the above. It's post-tax money earned as a reward on CC spend, so it doesn't fit 401k or HSA (both are pre-tax), though it could possibly be Roth, but with the rules of 401ks in place (one example: can't deposit money into a 401k without income from a job, which rewards on their own can't guarantee), I also suspect they can't just put it in there.

My money is that it goes into your brokerage/taxable account.

[coldfusion]

"Eligible accounts include most nonretirement registrations as well as Traditional IRA, Roth IRA, Rollover IRA, SEP IRA, Fidelity Charitable® Giving Account®, Fidelity HSA®, and Fidelity-managed 529 College Savings Plan accounts. 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. Full details appear in the Program Guidelines new card customers receive with their card. Contributions to Fidelity Charitable® are generally eligible for a federal income tax charitable deduction. Please consult with your tax advisor. The list of eligible registration types may change without notice at Fidelity’s sole discretion. For more information about whether a particular registration is eligible, please call 1-800-FIDELITY (800-343-3548)."  (emphasis is mine)

[SouthJamaica]

---

@KJinNC wrote:

I can't decide if this is more of a credit card question or more of a personal finance question ... moderators, please move if I got the category wrong.

I have a Fidelity 401K, which includes both Roth and traditional (probably didn't word that correctly). I also have an HSA managed by Fidelity.

With this card, if I set it to deposit rewards into the HSA, what happens if that takes me above the annual max contribution?

If I set it to deposit into the 401K, does it count as Roth or traditional? Or do I pick, and if so, which is correct?

Just in general, any advice for how to handle these rewards? Thanks!

---

IMHO it should go into a checking or savings account, not a retirement account.

[KJinNC]

Thanks - is that to avoid tax compliance issues, or for another reason? Once it goes into an account, I'd manually move it into longterm savings at some point, right? Thanks.

[axlm]

I use a standard Fidelity brokerage account as my main checking account (bill pay, debit card, free checks and refunded fees at ATMs). You don't even need to open a Cash Management account, they both work virtually the same. I just set my preferred money market fund as core position and get some interest, too.

All my rewards from their credit card get deposited to that brokerage account, and from there, redistributed as I see fit.

[SouthJamaica]

---

@KJinNC wrote:

Thanks - is that to avoid tax compliance issues, or for another reason? Once it goes into an account, I'd manually move it into longterm savings at some point, right? Thanks.

---

I think it would create record keeping and possible tax problems to have it go directly into the IRA's.