Fidelity® Rewards Visa Signature® Credit Card review: The dark horse of flat-rate cash back cards?

The Wells Fargo Active Cash card offers 2 percent cash rewards on purchases without redemption limitations or other caveats that might reduce the value of your rewards. It’s in the top spot for best cash rewards credit cards and is leading the pack among 2 percent back cards.

It’s no surprise the Active Cash is so highly rated: it carries a generous cash rewards rate with flexible redemption options and valuable perks for no annual fee. However, it does charge foreign transaction fees, which makes it compare poorly to the Fidelity Rewards Visa. 

The Wells Fargo Active Cash might have a much broader appeal to people because not everyone is saving for retirement (or leveraging their credit card rewards into their savings). It also carries more value with perks and you can redeem your cash rewards in several ways without thinking too hard about the value. Put simply, there aren’t many strings attached to your cash rewards.

A key feature of any 2 percent cash back card is knowing how much you’ll earn back no matter where you use your card. They don’t demand much thinking, they keep things simple and you won’t be surprised if you don’t earn your highest cash back rate. The Fidelity card complicates the flat-rate earning and redeeming process just a tiny bit with its one caveat requiring you to redeem your cash back into an eligible Fidelity account to earn the best rate, which might turn some users away. 

The Blue Cash Everyday Card from American Express is a tiered category cash back credit card with plenty of value gained through perks, issuer exclusive offers and no annual fee. It’s one of the best cards for grocery shopping and online shopping because it offers generously boosted rewards rates in both of those categories.

If you’re more of a credit card rewards enthusiast than you are a saver, you might want to consider a tiered category rewards card. These cards can help you make the most of your purchases in key spending categories that make up a large portion of your budget. 

For instance, because the Blue Cash Everyday boosts your cash back at U.S. supermarkets to 3 percent (on up to $6,000 per year in purchases, then 1%), you’ll earn more cash back with it than you would with the Fidelity Rewards Visa. Although you’ll only earn 1 percent back in several other categories with the Blue Cash Everyday (and 2 percent back with a flat-rate rewards card) if you have a very focused spending strategy that only includes a handful of spending categories, it could pay to use a tiered rewards credit card instead of a do-it-all flat-rate card. 

Existing Fidelity customers should consider the Fidelity Rewards Visa because it’s a great card for recouping some of your spending and building your retirement account balance. Although credit card rewards might amount to just pennies against your savings in the short term, the growth rate of retirement accounts can turn as little as $300 in annual contributions (from $15,000 spent annually) into thousands of dollars by the time you’re ready to retire. 

If you’re new to retirement savings or looking for new, creative ways to save money and squirrel away a nest egg for future you, the Fidelity Rewards Visa could prompt you to open a Fidelity account and start making the most of your credit card rewards. 

The primary criteria for a rewards or cash back card’s rating is its rewards value. This includes the card’s average rewards rate, estimated annual rewards earnings, sign-up bonus value and reward redemption value.

To estimate a card’s average annual rewards earnings, we first calculate its average rewards rate based on how much it earns in different bonus categories and how closely its categories align with the average person’s spending habits, according to the Bureau of Labor Statistics (BLS).

The most recent BLS data estimates average total spending in 2022 was $72,967 per consumer. We then narrow our focus to which purchases are likely to be put on a credit card and earn rewards, subtracting expenditures like housing, vehicle purchases and education. This gives us a total “chargeable” annual spend of around $22,500.  

Some of the major spending categories that contribute towards the annual spend include:

• Groceries: $5,700
• Dining out: $3,600
• Entertainment: $2,400
• Gas: $3,100
• Apparel and services: $1,900

Using this data, we assign a weighting to each of a card’s bonus categories. For example, a card’s grocery rewards rate receives a 22 percent weighting based on how much of the average person’s budget is spent on groceries. We also estimate the redemption value of points or miles from various issuer, airline and hotel rewards programs.

This weighting and rewards valuation allows us to estimate a card’s average annual rewards earnings — how many points or miles you’d earn with a given card if your spending was about average and you used the card for all of your purchases, as well as what those points are worth. We also use point valuations to determine a card’s sign-up bonus value.

With these calculations complete, we assign each card a score based on how its average rewards earnings, sign-up bonus value, rewards rate and redemption value stack up against other rewards cards.

We also rate cards based on how much it costs to keep them in your wallet or carry a balance. 

To start, each rewards or cash back card is scored based on whether it offers an intro APR and how its ongoing APR compares to the rates available on other rewards or cash back cards. 

We also score each card based on how its annual fee influences its overall value. 

We consider a card’s annual fee in two ways — how it ranks relative to the fees you’ll find on other cards in the category and how it impacts a card’s overall rewards value. Cards with an annual fee will always be at a slight disadvantage in our scoring system since annual fees inherently cut into your rewards value, but if a card offers terrific value via its ongoing rewards and perks, it can earn a high score even if it carries a high annual fee. 

With this in mind, we rate a card based primarily on how its ongoing rewards value and ongoing perk value (such as annual credits or bonuses) stack up against other cards in the category when you subtract its annual fee.

We rate each card’s flexibility based on the restrictions it imposes on earning and redeeming rewards and factor this rating into a card’s overall score. 

Flexibility factors include whether a card only allows you to earn a high rewards rate on a small amount of spending or requires you to meet a certain earning threshold before you can redeem rewards. We also examine whether your points are worth less when you redeem for some options versus others and whether a card gives you the flexibility to transfer rewards to airline and hotel partners. 

We also score each card’s set of features – its perks and benefits — against five tiers of features to provide a rating. 

We break down these tiers as follows:

• Tier 1 has less than standard card features (an ultra-streamlined card that offers basic utility and next to nothing in the way of ancillary benefits. 
• Tier 2 includes the benefits you’d expect on standard Visa or Mastercard credit cards, such as free access to your credit score, car rental insurance and $0 liability for fraudulent charges. 
• Tier 3 includes “prime card” or better-than-average card features like cellphone insurance, lost luggage insurance, concierge services and purchase protection. 
• Tier 4 includes luxury features such as airport lounge access, elite status with an airline or hotel and credits for expedited security screening membership programs. 
• Tier 5 includes the sort of exemplary benefits you’ll find on top-tier luxury cards, such as high-value travel credits, cardholder memberships and other unique and valuabl