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Updated: Sep 01, 2023

How to Boost Investments With the Fidelity Rewards Credit Card

Using the Fidelity Rewards cash back credit card can generate more funds for you to invest in a Fidelity brokerage account.
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Investing wisely is a proven way to build wealth. If you’d like to expand your investments but you’re having difficulty finding the extra money to do so, the Fidelity Rewards Visa Signature Card may be the answer.

This card, issued by Fidelity Investments (the world’s second-largest provider of mutual funds and financial services), makes it possible to grow your portfolio by depositing your cash-back rewards directly into a Fidelity brokerage account.

Boosting Your Investments

The Fidelity Rewards Visa Signature Card features an easy-to-understand cash-back rewards structure. Every $1 spent in net purchases earns 2 reward points. These points are converted to cash when you deposit them into your Fidelity brokerage account. Cash-back earned with the card never expires as long as your account remains open and in good standing.

Calculate Your Rewards

There’s no limit on the amount of rewards members can earn with the Fidelity Rewards Visa Signature Card. Consider this example of how much investment capital you can generate just by using your card:

Assume you spend the following annually:

  • $6,000 for grocery purchases
  • $5,000 for travel
  • $4,000 for gas
  • $3,000 for entertainment
  • $2,000 for dining out

Your total spending would equal $20,000. That means you’d earn 40,000 points with the card. Points are valued at 1 cent each when you redeem them into a Fidelity brokerage account so, over the course of a year, you’d earn an extra $400 that you could put towards your investments.

The table below illustrates how much portfolio growth your cash-back rewards could generate in a brokerage account over time.

Fidelity Brokerage growth table

Investment Term Cash Rewards Contributions Total Investment Value
1 Year $400 $428
5 Years $400 $2,461
10 Years $400 $5,913
20 Years $400 $17,544
30 Years $400 $40,425

**These examples assume a 7% annualized rate of return, monthly credit card spending of $1667 and an annual rewards rate of 40,000 points.

The more money you spend with your Fidelity Rewards Visa Signature Card, the faster your investments will add up.

Brokerage Accounts Explained

A brokerage account is a taxable investment account that investors can use to buy and sell shares of stock, mutual funds, bonds and other securities. You pay a fee to the brokerage, which then executes trades on your behalf. Since November 4, 2019 Fidelity cut fees to $0 per transaction.

Unlike an IRA or similar qualified retirement account, there are no early withdrawal penalties or annual contribution limits. You are, however, subject to capital gains tax on your investment earnings. Fortunately, you can minimize your tax liability associated with a Fidelity brokerage account through tax-loss harvesting.

Tax-loss harvesting involves selling off assets at a loss and replacing them with similar - but not substantially identical - assets. Fidelity allows you to invest in a wide range of assets through your brokerage account, including stocks, exchange-traded funds, mutual funds, bonds, certificates of deposit and precious metals, so you have a variety of choices when shaping your investment portfolio.

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