January 20,2009
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CC ‘Reward Points' Toward Retirement, Pt.2
– What's the plan?So, what are these new credit card ‘Rewards' plans about and which one (if any) is best for you? They can vary quite a bit so, it might be worth a closer, more technical look. These can all be deposited into retirement accounts. They are:
Fidelity Retirement Rewards: Aligned with American Express, Fidelity Investments, the mutual fund giant, offers a great deal. They not only offer ‘double points' of two for every dollar spent on the credit card but, after saving 5,000 points, they will deposit fifty dollars into your Fidelity (of course) retirement account. After that, they automatically will deposit more money into your retirement account as points accumulate. To secure this credit card, you must accept the terms of a fixed 17% APR. There are plans in the works, however, to change this to a variable rate next month. As far as the types of retirement accounts, they offer either the traditional SEP-IRA or the Roth type. General IRAs are also in the plans to come next month The same contribution limits apply as would for direct contributions (as required by the IRS.
NestEggz Visa Rewards: This credit card lender (found at www.nesteggz.com) affiliates with VISA. Their deal works by the standard 1% rule. For every dollar you spend on the credit card, they will reward you with one point. You can direct the contribution proceeds into any standard retirement, or even investment package, you choose. These benefits can be secured with a credit card having a fixed rate of 14% APR.
Schwab Bank Invest First Visa Signature: Charles Schwab is in the game, too. Although their rewards are taxable, they do offer the nice ‘double points' feature. When you open a Schwab brokerage account, they will deposit 2% of all your credit card purchases into that account.