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Earn 1.50% for College with the Fidelity 529 College Rewards American Express

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Credit Card Name and Issuer:

The Fidelity 529 College Rewards Card from American Express

Reward Amount:

1.50% of eligible purchases are deposited to any Fidelity Section 529 plan you designate.

Eligible purchases exclude balance transfers, cash advances, and business-related purchases (though Fidelity will not disclose how they measure or enforce this).

Annual Fee and Interest Rates:

The Fidelity 529 College Rewards Card has no annual fee.

The Annual Percentage Rate (APR) on new purchases ranges from 16.99% - 29.99% depending on a user's credit rating.

Pro's of the Fidelity 529 College Rewards Card:

  • 1.50% reward is slightly above average rate for reward card programs.
  • Money is deposited into a Section 529 plan for your child's future education.
  • Friends and family can also register cards and earn rewards for your child.

Con's of the Fidelity 529 College Rewards Card:

  • Double-digit interest rates on balances can quickly wipe out the value of any rewards.
  • Deposits to Section 529 plans are only made each time you rack up $5,000 in cumulative purchases.
  • $1,500 annual maximum on rewards.
  • Rewards can only be deposited into a Fidelity Section 529, even if you already use another Section 529 plan provider.

Application Information:

Visit Fidelity's website at www.Fidelity.com

Summary of Fidelity 529 College Rewards Credit Card:

At first glance, the Fidelity 529 College Rewards Card may seem enticing with its 1.50% reward rate, but its benefits are mediocre at best. The reward and lack of an annual fee are quickly offset by the high interest rates on new purchases (up to 29.99%).

Further, the Fidelity 529 College Rewards Card requires all rewards you earn to be deposited into a Fidelity Section 529 plan, which is only offered in a small number of states. Considering that over 35 states offer a state income tax deduction for using their in-state Section 529 plan, opening a Fidelity Section 529 plan won't make much sense for parents living outside of those states.

The benefits of the card's only truly unique feature, the ability for friends and family to earn rewards for your child, are also minimized by the plan's $1,500 annual reward limit.

If you are truly interested in a brokerage or banking rewards card, I'd suggest you shop around before making a decision.
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