czarandy said:9000 said:
The rewards are just a convenient way to put money in the IRA account. The money is actually coming from your taxable income. If you didn't use the rewards to put it in, you would use your taxable income, which would reduce the amount you could spend on other stuff, except that the rewards would make up for it.

Example (say 10% flat taxes):

Situation 1: $10,000 income, $5,000 spent, remaining $5,000 into IRA. $500 taxes. $100 rebate (untaxed).
Net result: $-400 taxable money, $5,000 in IRA.

Situation 2: $10,000 income. $5,000 spent, $4,900 into IRA. $510 taxes. $100 rebate also into IRA.
Net result: $-410 taxable money, $5,000 in IRA.

So, no, you are not correct.

No, this example isn't correct. In Situation No. 2, you can deduct the $100 rebate that is going into the IRA, so your taxes would decrease by $10. So, for tax purposes, both situations are the same. Also, to clear up some other confusion, the rebate is not income---conceptually, its like a mail-in rebate for a product (do you declare income for every coupon that you use? Of course not, and the IRS doesn't require that. This type of card follows the same theory---you're just paying 2% less for everything you purchase, but have to wait a bit to get that 2% back).

BUT, the two things to consider are: (1) If you can't make tax deductible contributions to an IRA (because your income is too high or because you participate in 401(k)/403(b) or other employer sponsored plan), do you want this money going into a non-tax deductible IRA? Maybe, maybe not, its something for you to decide. And, (2) If you are a student and don't have earned income, then you can't contribute to an IRA (you can only contribute to an IRA up to the maximum amount allowed by law, or to the amount of your earned income, whichever is lower), so what would happen to these rebates?

MikeR397 said:FYI people, this is an AMEX card, and AMEX no longer allows for consolidation or CL movement between exisiting cards.No, this is an FIA card.

CreditGuy,
I currently have the 1.5% Visa linked to a Roth IRA. Cash Back is deposited directly and appears on statements the same way that normal bank initiated contributions do. The only way to tell the difference is that they always appear in $75 increments. IRS reporting is limited to the annaul 5498 Form I recieve which only gives total amount contributed, does not differentiate funding source.

I love my current Fidelity 1.5% card. It will be great if they raise that to 2%. I will be keenly watching this going into next year.

The retirement AMEX card isn't as good for me as (1) Visa is accepted more than AMEX and (2) income restrictions on IRA's are no good for me.

Applied.

"Your business is appreciated and careful consideration is being given to your request, but an instant decision cannot be provided at this time.

You will receive a written response within the next 30 days."

Already have the Fidelity Visa Investment 1.5% Card with FIA. Used Roth IRA acct number.

I own and am also huge fan of the 1.5% Fido Card. I use it for 99% of my purchases and the year-end summary they send is an incredible budgeting tool for tracking seasonal spending, identifiying tax-deductions, and tracking purchases by category.

Fidelity is also planning to boost its cash-back rebate to 2% from 1.5% on its Fidelity Investment Rewards Card and the 529 College Rewards Card in early 2009.
Wonder if that means that they will convert existing accounts.... On the other hand it mentions Investment Rewards AMEX, which mine is not.

Just cashed out $75 today at the 1.5% rate.... Wonder if I should have saved up for the 2% rate.

Crazytree said:useless to those of us who max out our IRA contributions every year anyways.

why? you can always wait til the next year, cash in the points for IRA contribution and add cash to max your IRA contribution. Earn 500000 pts in a year, and that should be enough to cover your IRA contribution for '09.

beethovengirl said:Crazytree said:useless to those of us who max out our IRA contributions every year anyways.
No. Everyone needs to read bjlee's post:
"You can redeem points for deposits into an eligible Fidelity account. You are solely responsible for the accuracy of the data you provide in connection with designating a Fidelity account, for ensuring that the account can accept deposits on your behalf and that the deposits comply with applicable laws and regulations. Eligible Fidelity Accounts include all Fidelity non-retirement, Individual Retirement Accounts, and Fidelity-managed 529 Plan accounts that accept ACH deposits."

https://wwwa.applyonlinenow.com/USCCapp/Ctl/display?pageid=discl...

Nice find. I wonder why Fidelity does not make that more obvious.

I had recently messaged FIDEL CS to see if they were going to respond to the new Schwab 2% card -- and they replied "not at present". But then I just read in the WSJ that FIDO will be upgrading its Investment Rewards Visa Signature cc from 1.5% CashBack to 2% in "early 2009". No info at FIDEL Web site yet.
Cannot wait !
-- Scott