What an easy way to make $50. I just got my first payment and look forward to receiving more every two to three months.

All I have to do is use my credit card for everyday purchases, earning reward points every time. Whenever I accumulate 5,000 points, I redeem them for $50 deposited in my brokerage account. I can invest the money, or, with a click of a mouse online, transfer it to my checking account.

I use the Fidelity Investment Rewards American Express Card, the best I've found among "investment rewards" cards offered by a number of firms, including Ameriprise Financial, Edward Jones and Charles Schwab.

The Fidelity card charges no annual fee and offers unlimited reward points worth 2 percent of card charges if redeemed for deposits into a Fidelity brokerage account. Charge $2,500, for example, and you earn 5,000 points worth a $50 deposit. (With similar Fidelity cards, you can make deposits into IRAs or College 529 Plans.

[For information, click here Google Search: Fidelity Investment Rewards American Express Card]

You are not required to convert points into account deposits and you don't need a Fidelity account to get a card. You may redeem points for airline tickets, gift certificates, merchandise or other items. But you get the highest dollar value for reward points by turning them into account deposits.

Since I already had a Fidelity brokerage account, getting the card made sense after a MasterCard I have from Chase, now called Chase Sapphire, lowered cash rewards to 1 percent on all purchases from up to 3 percent on certain items.

I now use the American Express Card everywhere it is accepted, including the grocery store, drugstore and gas station. To get the most rewards -- and save time paying bills -- I have my movie rental, Internet, cable television and telephone bills automatically charged to the card.

Of course, I use the card only for purchases I would have made anyway and I pay the card bill in full automatically from my checking account every month.

I turned to a new favorite card because the Chase MasterCard no longer gave me the best deal. I'm not advocating switching cards constantly, which is time consuming and could hurt your credit standing. "Credit cards don't have a free-return policy," said Bill Hardekopf, CEO of LowCards.com, a Web site that lets you compare features among more than 1,000 credit cards. "Every time you apply for a card, it is reported on your credit score and too many applications can pull down your score." On the other hand, I do advocate matching a credit card to your habits and preferences.

If you pay the full balance each month, something I hope all my readers do, then the interest rate is not that important, Hardekopf said. (I don't know without looking it up -- or care -- what the Fidelity card charges, since I never pay interest.) Aside from wide acceptance and convenient features such as automatic electronic payments, I want cards that offer cash rewards without annual fees.

"If the card offers you more than 1 percent of what you spend, it is an above-average offer," Hardekopf said. Few cards offer cash back rewards of more than 1 percent, he noted, and the ones that do usually have a minimum spending limit, or the higher rebate rate is part of a rotating reward program with categories of eligible purchases -- such as groceries or restaurant meals, for example -- changing every month.

 

 

 

Personal Finance - 'Investment Rewards' Credit Cards Well Worth A Look

(c) 2010 Humberto Cruz