American Express Thread II: Fidelity Ponders Dropping Amex/Bank of America as partners

scott

Fidelity Investments is shopping around for better terms for a very popular and highly rated cash-back credit card, as it considers dropping American Express (NYSE:AXP) and Bank of America (NYSE:BAC) as its partners, Bloomberg reports.Visa (NYSE:V) and MasterCard (NYSE:MA) are wooing the No. 2 mutual fund provider, hoping to replace American Express on the Fidelity Investment Rewards American Express card, which routes 2% of purchases into a variety of brokerage, cash-management and savings accounts.

http://www.bloomberg.com/news/articles/2015-08-26/fidelity-said-to-consider-dropping-amex-bofa-as-card-partners

Thought this may be of interest as some people mentioned this Fidelity Amex in the Costco Amex thread...

msf

Thanks for the link. Count me among those interested.

I've read elsewhere (old news) that while no sponsor will commit to maintaining a 2% card (e.g. Schwab dropped its 2% Visa several years ago), Fidelity has said that it does plan to keep the card going. (Even though that statement was in reference to the Fido Amex card, one could read that as a strong interest in keeping a 2% card available.)

This hunt for a partner could prove problematic for Fidelity. They already offer a 1.5% to 2% Visa card (1.5% for the first $15K), which is also through the FIA subsidiary of BofA. Drop Amex, and BofA might want to change terms on the Fidelity Visa card. And while banks offer both MC and Visa, I can't think of third parties that brand both cards. (Fidelity's branding of Visa and Amex cards seemed different; at least several years ago they weren't competing quite the way MC and Visa go head to head.)

A somewhat related question is whether this has any effect on Fidelity's Amex Gold card. Fidelity hasn't offered that card in many years, but it still maintains it for the privileged few ("membership has its privileges").

msf

Finally found the news item stating Fidelity's commitment to a 2% card. NYTimes, May 15, 2015.

" Fidelity guaranteed to me early last year that it would not change the 2 percent rebate for at least 18 months. This week, it reset that clock, so anyone who starts using that card now will be safe until November 2016, at least."

davidrmoran

>> Fidelity hasn't offered that [Gold] card in many years, but it still maintains it for the privileged few

I have one, do not use it, and always wondered what good it can possibly do me.

msf

Some Amex benefits go with every Amex card, regardless of who issues it, such as Small Business Saturday. Other benefits inure only to "real" Amex cards (though these seem to include the free cards like Amex Blue Cash Everyday).

A recently added "real" Amex card feature that seems to have some value is Shoprunner.

A unique feature of the "real" Fidelity Amex card is that when used as an ATM card (for your linked brokerage account) it is more secure than a real ATM or debit card. Unlike those cards, it does not access your account directly. Rather, a cash "withdrawal" is actually a zero-fee charge; the amount charged is paid off nightly from your account. So you get the full legal protection of a charge/credit card, as opposed to a debit card.

This feature used to have more value when ATM fees were lower. The ATM rebate is capped at $2.50/transaction.