For the Capital One Quicksilver, this calculation is straightforward. You earn 1.5% on all purchases

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Cash-back rewards are often passed over by award travel enthusiasts for more glamorous airline and hotel points, but they can play an important role in your overall earning strategy. Today TPG Contributor Nick Ewen looks at one of the stronger cash-back credit card options, and discusses whether it should have a place in your wallet.
When it comes to earning points, whether through credit cards, bonuses, or actual travel, carnival cruise review TPG and I agree on one basic strategy: diversification! Building up your account balances in a variety of programs is the key to protecting against devaluation, which can happen carnival cruise review with little (or no) notice at all.
Cash-back credit carnival cruise review cards are an important part of the diversification strategy, as you (hopefully) shouldn carnival cruise review t have to worry about the Department of the Treasury carnival cruise review suddenly announcing that $1 is worth 50 cents.
Today I ll discuss a credit card that has at times been the measuring stick for all other cash-back carnival cruise review cards, but has recently become less impressive thanks to tougher competition: the Fidelity Investment Rewards American carnival cruise review Express .
For starters, it s important to realize carnival cruise review that while cash-back cards are popular and an important component of a diversified rewards portfolio, they re not an efficient way to fly in first class on the Emirates A380 or snag a room at the Conrad Maldives . Instead, they usually offer a standard rate of return on purchases in the form of statement credits or cash deposited into your bank account.
Flexibility : When you make purchases on a cash-back carnival cruise review card, you aren t earning points or miles in a specific program. carnival cruise review Your rewards can be applied to any purchase, and you aren t locked into redeeming them with a certain airline or hotel.
Simplicity : While some cash-back cards offer rotating bonus categories carnival cruise review (like the Chase Freedom and Discover It ), many others offer a standard earning rate, generally between 1-2%. This can make it easier to decide which card to use for a specific purpose (though remember that the new TPG To Go app can help with this as well!). Cash-back cards are a good place to start if you re new to the points miles game.
Inexpensive : Many cash-back credit cards don t have an annual fee; the only one in the September post with a fee is the American Express Blue Cash Preferred ($75). This is another appealing attribute if you re new to the game, as you can get started without an initial carnival cruise review expense.
The standard 2% cash-back on all purchases is actually industry-leading, though the new Citi Double Cash  offers a similar effective rate of return (with 1% earned on every purchase and 1% earned when you pay off your balance). Since TPG always recommends paying your balance off in-full every month, the cards are tied, but still ahead of numerous other cash-back cards that only offer 1 1.5% back on purchases.
Some cash-back cards may do better carnival cruise review than 2% if you can take advantage of a banking relationship  that improves your return, but since those programs carnival cruise review have additional requirements, it s not an apples to apples comparison.
The big downside of the Fidelity Amex is how you receive the 2% cash-back: it must be deposited into an eligible Fidelity account carnival cruise review . This includes cash management accounts, IRA s, or 529 plans. If you aren t a current Fidelity customer, the cash management account has no minimum requirement and no monthly carnival cruise review maintenance fees. However, you may not want to go through the hassle of opening a new account just to earn cash-back, carnival cruise review especially when there are other options out there.
No sign-up bonus The Fidelity American Express has previously offered a sign-up bonus, but right now it doesn t. While cash-back cards tend to have lower sign-up bonuses than other rewards cards, those that do offer them can bump up your earning potential. Here s a quick run-down of current offers, along with how much you would need to spend on the Fidelity Amex to make up for the lack of a sign-up bonus.
carnival cruise review Bank Americard Cash Rewards : $100 after spending $500 in the first 90 days. Since the card offers a standard 1% back on purchases, you would need to spend $10,000 or more on the Fidelity Amex in your first year to equal the cash-back you would get on this card.
CapitalOne   Quicksilver : $100 after spending $500 in the first three months. Since the card offers a standard 1.5% back on purchases, you would need to spend $20,000 or more on the Fidelity Amex in year one to equal the cash-back you would get on the Quicksilver.
Chase Freedom : $100 sign-up bonus after spending $500 in first three months, carnival cruise review plus another $25 when you add an authorized user and have him/her make a purchase in the first three months. Since the card offers standard 1% back on purchases, you would need to spend $12,500 or more on the Fidelity Amex in year one to equal the cash-back carnival cruise review you would get on the Freedom.
Category Bonuses As I mentioned above, some cash-back cards offer category bonuses that can make them more lucrative than the Fidelity Amex, depending on your typical purchase patterns in a given year. Here s an overview of cards that offer such bonuses, and how much you would need to spend on the Fidelity Amex to break even when it comes to cash-back.
Bank Americard Cash Rewards : 3% back on gas and 2% back at grocery carnival cruise review stores (up to $1500 per quarter). This card will offer better bang for your buck than the Fidelity Amex if you, 1) Typically spend more at gas stations than you do on purchases outside carnival cruise review of gas stations and grocery stores, and 2) Typically spend less than $1500 at gas stations and grocery stores every 3 months.
Chase Freedom and Discover It : 5% back on rotating categories every quarter (up to $1500 per quarter). The analysis here is a bit dicier, as future bonus categories are unpredictable (though the Discover It card does have the  2015 calendar up already). As a result, you can t be sure that you ll be able to fully maximize each bonus. However, if you assume that you can spend the full $1500 each quarter (or $6,000 carnival cruise review per year), you ll earn $180 of additional cash back in those categories ($300 on the Freedom $120 on the Fidelity Amex). Thus, in order to break even, you would need to spend $18,000 carnival cruise review in non-bonus categories every year. If you spend more than that, the Fidelity Amex comes out ahead. Anything less than that pushes the Freedom and/or Discover It in front.
Foreign Transaction Fees The Fidelity Amex only charges 1% for transactions made outside the U.S. This puts it ahead of Chase Freedom, Bank Americard Cash Rewards, and Citi Double Cash. However, both the Capital One Quicksilver and Discover It cards waive foreign transaction fees entirely. As a result, if you travel internationally and plan on using your card, you ll need to make sure that the additional rewards on the Fidelity Amex covers the fees incurred abroad.
For the Capital One Quicksilver, this calculation is straightforward. You earn 1.5% on all purchases, both within and outside the U.S. The Fidelity Amex offers 2% cash-back in the U.S., but only 1% internationally (factoring in the foreign transaction carnival cruise review fee). As a result, your break even point is when your U.S. purchases equal international purchases. If you spend more money in the U.S., the Fidelity Amex comes out ahead. If you spend more abroad, carnival cruise review the Capital One Quicksilver comes out ahead.
carnival cruise review The Discover It is a little more challenging. Since you earn a standard 1% cash-back on purchases at non-bonus categories, this is equal to the cash-back carnival cruise review earned when using the Fidelity Amex abroad. As a result, if you spend even $1 in the U.S., the Fidelity American Express offers the better return. However, this ignores the rotating quarterly bonus categories on Discover carnival cruise review It, so be sure to factor those in.
OVERALL CONCLUSION The Fidelity American Express is a solid product, and as an existing Fidelity account holder, I have been eyeing the card for a while. However, there are a few changes that would make this card much more attractive:
The third point is somewhat moot for me (and others out there who currently have an eligible Fidelity account), but it would definitely bump the Fidelity Amex to the front of the pack when it comes to cash-back credit cards. Given the new Citi Double Cash card, it s an option that Fidelity and American Express should consider!
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