Best Credit Cards for Investing Rewards: Turn Spending Into Savings

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Did you know that you could boost your investment or savings account while making everyday purchases with your credit card?

There are credit cards on the market that will reward as much as 2% on every purchase that you make and then automatically deposit those cash back earnings into the account of your choice.

So while you’re spending, you also could be earning for your future.

Team Clark has analyzed the credit card market to spotlight some of the best options for saving and investing your rewards.

We also have talked to money expert Clark Howard to develop the optimal strategy for investing credit card rewards.



What Types of Credit Card Can You Use for Investing?

As long as you’re not required to use your credit card rewards for specific things like airline miles or hotel nights, there should be way to convert those rewards into an investable asset.

You can get a check from some cash back cards and then invest the money yourself. But there are cards out there that simplify the process for you, making automatic deposits to an account that you choose.

For the purposes of investing and saving credit card rewards, there are three different types of rewards card that are ideal candidates:

Brokerage-Branded Credit Cards

These are credit cards that carry the name of some of the biggest financial brokerage companies in the United States.

In exchange for using their branded card, you’ll receive rewards that are geared toward investing in their products or services.

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For example, the Fidelity Rewards Visa Signature Card offers 2% cash back on all your spending as long as it is applied to a Fidelity investment product.

This can be an easy, passive way to turn credit card rewards into long-term investments.

We’ll focus on this type of card extensively later in this roundup.

Cash Back Credit Cards

No matter what your savings goals are, keeping a solid cash back credit card on hand can be a smart decision.

With cards such as the Citi Double Cash or the PayPal Cashback Mastercard, you can earn unlimited 2% back on everything you purchase. That percentage is better than many of the brokerage-branded cards on the market.

You can request a check or direct deposit for your cash back earnings with these cards, which would allow you to then invest your gains.

Select Local Bank or Credit Union Credit Cards

Another place to look for a credit card that will help you invest or save your rewards is your local credit union or bank.

There are often good credit card offerings on the local level, and some of those may have ties to investment products offered by that bank or credit union.

Since the options vary from community to community, we won’t spend too much time on this type of card in this article.

However, you should check with your local banks and credit unions as you’re doing your due diligence in this process. They could have a great fit for investing credit card rewards.

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What Types of Investing Can You Do With Credit Card Rewards?

The concept of investing for the future, while simultaneously using a credit card in the present, may seem counterintuitive on the surface.

But with some discipline and the right rewards card, it can be done effectively.

Some of the credit cards on this list will help you invest and save efficiently by automatically depositing your rewards into investment products. Others will give you the cash value of your rewards, which you can then turn into savings or an investment on your own.

Some examples of the type of investing or saving funding you can fund with your credit card rewards include:

  • Retirement accounts, such as a traditional or Roth IRA
  • Brokerage accounts, which allow you to invest in stocks, bonds or commodities
  • College savings plans, such as a 529 plan
  • Long-term savings vehicles, such as money market accounts or CDs
  • Short-term savings accounts, which could help you build up your rainy day fund

Best Rewards Credit Cards for Investing and Saving

For this roundup, Team Clark has reviewed several of the top brokerage-branded credit cards as well as the top flat-rate cash back credit cards on the market.

Here’s what you need to know about each of the top options:

Fidelity Rewards Visa Signature Card

Fidelity® Rewards Visa Signature® Card

What To Know About This Card

  • Annual Fee: $0
  • Investing and Saving Rewards Highlights: An unlimited 2% cash back on all purchases can be deposited into your choice of Fidelity investment accounts, such as a brokerage or retirement account.
  • Introductory Offers: None
  • Top Perks: auto rental collision damage waiver and travel accident insurance
  • Team Clark Review

Who This Card is For: If you already have a Fidelity investment account, this card should be an easy fit into your wallet as a passive way to boost your investing. Even if you’re not a Fidelity customer, the unlimited 2% cash back makes it worth looking at opening an account there. There are free investing products available that you could fund with this card.

This card is Clark Howard’s top choice for investing your credit card rewards.


Citi Double Cash

Citi Double Cash Card

What To Know About This Card

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  • Annual Fee: $0
  • Investing and Saving Rewards Highlights: You get unlimited 2% cash back on every purchase you make: 1% when you buy and 1% when you pay your bill.
  • Introductory Offers: 0% APR on balance transfers for the first 18 months of card membership
  • Top Perks: $0 fraud liability and access to the Citi Entertainment portal
  • Team Clark Review

Who This Card Is For: This card is for everyone whether you’re saving and investing or not. It’s in Clark Howard’s wallet, and it is one of the top cards he recommends because of the unlimited 2% cash back and the lack of an annual fee. You’ll need to invest or save this cash back on your own, but it can be a great way to ensure a solid return on all of your spending.

This card is on our top rewards credit cards list, and is one of Clark’s top choices for investing and saving rewards.


Schwab Investor Card® from American Express

American Express Charles Schwab Credit Card

What To Know About This Card

  • Annual Fee: $0
  • Investing and Saving Rewards Highlights: This card offers 1.5% cash back on purchases, which can automatically be deposited into your qualified Schwab investment account.
  • Introductory Offers: 0% APR on new purchases for the first six months (After that, your APR will be a variable rate, 13.99% to 16.99%, based on your creditworthiness and other factors). You can also earn a $100 card statement credit if you spend $1,000 in the first three months
  • Top Perks: American Express’s car rental damage protection, extended warranty and purchase protection coverages (Terms and Conditions apply)

Who This Card Is For: You must be a Charles Schwab account holder in order to apply for this credit card, and that account must remain active in order to get the 1.5% cash back reward. Though it does not offer the top cash back rate available, this card is a “set it and forget it” option for Schwab investors. There is an Amex Platinum card that has better Schwab rewards, but it carries a $550 annual fee.


TD Ameritrade Client Rewards Card

TDAmeritrade Client Rewards card

What To Know About This Card

  • Annual Fee: $0
  • Investing and Saving Rewards Highlights: You get 1.5% cash back on all purchases with a 10% bonus on your cash back earnings if you have them deposited into a TD Ameritrade investment account.
  • Introductory Offers: 10,000 bonus points when you spend $500 in purchases within 90 days after account opening
  • Top Perks: no foreign transaction fees

Who This Card Is For: This card is for TD Ameritrade investors. And though it guarantees only 1.5% cash back on purchases, you can achieve a higher effective rate of return by taking advantage of the 10% cash back bonus you get for investing your rewards.


The Morgan Stanley Credit Card from American Express

Morgan Stanley Credit Card American Express

What To Know About This Card

  • Annual Fee: $0
  • Investing and Saving Rewards Highlights: Earn points in various spending categories: 2x points purchases at U.S. restaurants, U.S. department stores, U.S. airlines and U.S. car rentals; 1x points on all other purchases. You then use points for deposits by Morgan Stanley to your qualifying brokerage account at a rate of $1 per 100 points.
  • Introductory Offers: Earn 10,000 bonus points if you spend $1,000 in the first 3 months of card membership
  • Top Perks: American Express’s car rental damage protection, extended warranty and purchase protection coverages (Terms and conditions apply)

Who This Card Is For: You must have an active Morgan Stanley brokerage account to be eligible to apply for this card. While the rewards structure does give 2% on select purchases, the overwhelming majority of them will return an underwhelming 1%. That makes this card viable only for long-standing Morgan Stanley customers who want a low-hassle way to earn points. There is an Amex Platinum card that features better Morgan Stanley-related rewards, but it carries a $550 annual fee.


Bank of America Premium Rewards Credit Card for Merrill Lynch

Bank of America Premium Rewards Credit Card

What To Know About This Card

  • Annual Fee: $95
  • Investing and Saving Rewards Highlights: Earn unlimited 2 points per $1 spent on dining and travel purchases and 1.5 points per $1 spent on all other purchases. If you meet the $250,000 asset requirement for the Merrill Lynch Wealth Management program, you’ll earn 3.5 points for every $1 spent on dining and travel purchases and 2.62 points for every $1 spent on all other purchases.
  • Introductory Offers: 50,000 bonus points if you spend at least $3,000 in the first 90 days of card membership
  • Top Perks: TSA precheck credit and $100 travel incidental reimbursements

Who This Card Is For: To qualify for the rewards of this card, you must have both an open Bank of America account and an investment account with Merrill Lynch. And if you have north of $250,000 in assets invested between the two, those boosted rewards points are worth considering. If you don’t have quite that much, you still can earn a competitive 1.5 points per dollar and potentially more on dining and travel. To justify the $95 annual fee, you’ll probably need to use some of the travel perks this card offers in addition to the investment component.

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Upromise Mastercard from Barclays

upromise mastercard from barclays

What To Know About This Card

  • Annual Fee: $0
  • Investing and Saving Rewards Highlights: This card offers 1.25% cash back on all purchases with the ability to earn a 15% bonus on your cash back by linking your Upromise Program account to an eligible 529 college savings plan.
  • Introductory Offers: $100 cash back after spending $500 on purchases in the first 90 days; 0% APR on balance transfers for 15 months
  • Top Perks: no foreign transaction fees and $0 fraud liability

Who This Card Is For: This card could make sense for savers who are already committed to funding a 529 college savings account. The 1.25% cash back is pretty low compared to some other cards on this list or the best cash back cards on the market. So even with the 15% bonus offer, you may be able to do better for your cash back returns elsewhere.


Clark’s Picks and Strategy for Investing Credit Card Rewards

I sat down with money expert Clark Howard to talk about strategies for investing credit card rewards.

He responded to my first question with four words of advice for everyone:

“Fidelity, Fidelity, Fidelity and Fidelity,” Clark says.

“Get that 2%. Fidelity is a brilliantly run company. They have this ability to cut through the clutter and offer certain things that are clearly better than the competition. The 2% credit card is a perfect example.”

While the 2% cash back is a huge selling point for the card, Clark says that Fidelity’s investment menu makes the card even more enticing.

“Check out the Fidelity Zero Funds,” Clark says. “They have no commission and no ongoing expenses.”

Team Clark’s Christopher Smith has an in-depth review of all the products Fidelity has to offer here.

If you’re unwilling or unable to go the Fidelity Rewards card route, Clark says the next best idea is to get a no-annual-fee credit card that rewards 2% cash back and then make the investments yourself.

Clark recommends the Citi Double Cash for this. He carries it in his wallet.


Final Thoughts

Team Clark has long recommended that you use a credit card for most of your daily transactions thanks to the added purchase protections and benefits that you receive from most card issuers when compared to a debit card or cash.

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So it should seem like a natural progression in the process that we’d recommend getting a rewards credit card that could help you with saving for your next big purchase, education or retirement goals.

Clark recommends that you seek a 2% cash back return on your credit card purchases, and then invest those rewards into no or low fee vehicle for your desired investment goal.

But be careful!

Team Clark always advises against spending more than you should just to get the cash back returns. That can lead to carrying a balance at a high-interest rate, which will negate any benefits you may receive from the spending rewards.


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