Best credit cards for saving or investing your rewards

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Best credit cards for saving or investing your rewards
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When people think about credit cards, it often reminds them of debt. That may be because about half of credit card users carry debt during all or part of the year.

But there are some credit cards that can encourage responsible financial behavior.

The right credit card can channel your cash back rewards to help you save money for college, invest for retirement or pay off your mortgage or student loans.

RELATED: Clark Howard’s philosophy on credit cards

Best credit cards for saving or investing your rewards

Keep in mind that just because you can use these cards to save or invest, they’re not right for everyone. If you carry a balance on these rewards cards, you’ll be spending more on interest charges than you will be saving or investing.

Read on to learn Team Clark’s top four credit cards for investing your rewards or paying off your loans:

  1. Fidelity Rewards Visa Signature
  2. Upromise Mastercard
  3. Citi Rewards+ Card
  4. Morgan Stanley Credit Card from American Express
Fidelity Rewards Visa Signature Credit Card

Fidelity Rewards Visa Signature 

This is the card for those who want a simple way to direct cash back rewards to an investment account.
Sign-up bonus None
Rewards 2% cash back deposited into your qualifying Fidelity account
Annual fee None
Advantages
  • High rate of return on all purchases with no limit
  • No annual fee
Drawbacks
  • Must open a qualifying Fidelity account in order to earn the highest rate of cash back

Learn more: Fidelity Rewards Visa Signature Card


Upromise Mastercard

Upromise Mastercard 

This card offers numerous ways to earn cash back that you can deposit into a 529 College Savings account.
Sign-up bonus None
Rewards
  • 1.25% cash back on all purchases
  • 15% bonus on your total cash back when linked to an eligible 529 College Savings Plan
Annual fee None
Advantages
  • Earn 1.25% cash back, plus a 15% bonus, for a total of 1.4375% when linked to an eligible 529 College Savings Plan
  • Upromise Round Up lets you round up your purchases to the nearest dollar, up to $500, and deposit that money into your savings
  • Free access to your FICO credit score
  • Cash back rewards deposited into a 529 College Savings account
Drawbacks
  • 1.4375% return rate is less than some other cash back cards

Learn more: Upromise Mastercard


Citi Rewards+ Card

This card offers Citi ThankYou® Points, which can be redeemed for one cent each as loan repayments.
Sign-up bonus 15,000 bonus points after spending $1,000 in purchases within three months of account opening
Rewards
  • 2x points at supermarkets and gas stations (first $6,000 spent per year)
  • 1x points on all other purchases
  • Rounding up to the nearest 10 points for each purchase
  • 10% points back for the first 100,000 ThankYou® Points you redeem per year
Annual fee None
Advantages
  • Several ways to earn bonus points including rounding up and receiving points back
  • The ability to redeem points to repay a home mortgage or student loan
  • No annual fee
Drawbacks
  • Points can be redeemed for gift cards or travel, so you have to choose to use your rewards for loan repayments
  • 3% foreign transaction fee

Learn more: Citi Rewards+ Card


Morgan Stanley from American Express Credit Card

Morgan Stanley Credit Card from American Express 

This card offers bonus points on many purchases and points can be redeemed for deposits into your Morgan Stanley account.
Sign-up bonus 10,000 Membership Rewards points after you spend $1,000 in purchases within three months of account opening
Rewards
  • 2X points for purchases at U.S. restaurants
  • 2X points for purchases at select U.S. department stores
  • 2X points for car rentals purchased directly from select car rental companies
  • 2X points for airfare purchased directly from airlines
  • 1x points elsewhere
Annual fee None
Advantages
  • Points can be redeemed for one cent each as a deposit into a qualifying Morgan Stanley brokerage account
  • Several opportunities to earn bonus points
Drawbacks
  • Points can be redeemed for gift cards or travel, so you have to choose to redeem your rewards into your investment account

Learn more: Morgan Stanley Credit Card from American Express

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