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Friday, December 12, 2008

Fidelity Links Credit Card With Your IRA

News summary by MFWire's editors

Fidelity just came up with a way for shoppers to save for retirement when they pay with plastic. This week the Boston-based mutual fund giant unveiled the Retirement Rewards Card, an American Express credit card that returns two percent of your purchases back in the form of deposits into your Fidelity IRA.

Executive vice president Carolyn Clancy described the move as being especially appealing to consumers in light of the recession.

"We understand that Americans have multiple financial obligations, but saving for retirement must remain a priority," stated Clancy. "By combining the Fidelity Retirement Rewards Card with the tax-advantaged benefits of the Fidelity IRA, we are giving investors an easy way to continue to save for retirement in the midst of a challenging market."


Company Press Release

BOSTON, December 8, 2008 - Fidelity Investments®, the No. 1 provider of Individual Retirement Accounts (IRAs)1, today announced the launch of its new Retirement Rewards Card, which gives investors an innovative way to save for retirement while purchasing everyday necessities. With 78 percent of working Americans reporting that they are not currently saving as much as they should for retirement2, this new card gives them another way to save for this critical goal in these particularly difficult times. The card will be available starting Wednesday, December 10.

With no annual fee, caps or limits on rewards, the Fidelity® Retirement Rewards American Express® Card ("Fidelity Retirement Rewards Card") offers a 2 percent earn rate on retail purchases3 when Cardmembers redeem their cash rewards as a current year contribution into their Fidelity IRA. This product innovation further enhances Fidelity's industry leading IRA offering that features no account fees4, access to retirement representatives and free help choosing from a wide variety of investments.

"We understand that Americans have multiple financial obligations, but saving for retirement must remain a priority," said Carolyn Clancy, executive vice president, Fidelity Investments. "By combining the Fidelity Retirement Rewards Card with the tax-advantaged benefits of the Fidelity IRA, we are giving investors an easy way to continue to save for retirement in the midst of a challenging market."

Cash rewards from the Fidelity Retirement Rewards Card can be swept into several types of Fidelity IRA accounts, including Traditional IRAs, Roth IRAs and SEP IRA accounts.

"With 90 percent of Fidelity retail customers already using some form of rewards program on their primary credit card5, the new Fidelity Retirement Rewards Card allows Cardmembers to spend in a much smarter way by using their rewards to fund their retirement accounts," said Clancy. "This is one of the many ways that Fidelity is helping investors gain more control of their overall financial situation."

Using the new Fidelity Retirement Rewards Card, investors earn two points for each dollar spent on purchases. Once a Cardmember reaches a minimum of 5,000 points, or $2,500 in purchases, points can be automatically swept as a $50 current year contribution into the user's designated Fidelity IRA. If the Cardmember has maxed out their IRA contribution for that year6, they can continue to accrue points and restart automatic deposits to their IRA the next year. Investors also have the flexibility, at any time, to automatically redeem their rewards as cash into other Fidelity accounts or accumulate rewards and redeem them for travel, merchandise and other rewards.

The Fidelity Retirement Rewards Card joins the award-winning7 suite of credit cards offered by Fidelity that help investors save for key investment goals such as a new home or a child's college education. With enhancements scheduled for early 2009, the new Fidelity® Investment Rewards® American Express® Card and the Fidelity Investments 529 College Rewards® American Express® Card will be offering a new 2 percent earn rate on retail purchases.

The Fidelity Investment Rewards Card and the 529 College Rewards Card, introduced in August 2005 and January 2003 respectively, offer Cardmembers the ability to redeem points for cash back to their eligible Fidelity account or 529 account. To date, investors using these two cards have received a combined total cash reward of more than $175 million8.

Consumers can apply for a new Fidelity Retirement Rewards Card, or other Fidelity credit cards, at www.fidelity.com/retirementrewards, calling 1-800-FIDELITY9 or by picking up an application at any of the 127 Fidelity Investor Centers located across the U.S.

About Fidelity Investments

Fidelity Investments is one of the world's largest providers of financial services, with custodied assets of nearly $2.7 trillion, including managed assets of over $1.2 trillion as of October 31, 2008. Fidelity offers investment management, retirement planning, brokerage, and human resources and benefits outsourcing services to 24 million individuals and institutions as well as through 5,500 financial intermediary firms. The firm is the largest mutual fund company in the United States, the No. 1 provider of workplace retirement savings plans, the largest mutual fund supermarket and a leading online brokerage firm. For more information about Fidelity Investments, visit www.fidelity.com.

About American Express

American Express Company is a diversified worldwide travel, financial and network services company, founded in 1850. It is a world leader in charge and credit cards, Travelers Cheques, travel, and business services. Since 1996 American Express has been aggressively pursuing a strategy of opening its merchant network and card product portfolio to third party issuers around the world. By leveraging its global infrastructure and the powerful appeal of the brand, American Express has gained even broader reach for its network worldwide. American Express has now established more than 115 card-issuing partnership arrangements in 125 markets.

1Cerulli Edge - Retirement Edition Q3 2008. Based on an industry survey of firms reporting Total IRA Assets Administered for Q3 2008

2Research conducted by Richard Day Research for Fidelity Investments, September 2008

3Credits, returns, adjustments and certain transactions do not earn rewards. For information about the rates, fees, other costs, and benefits associated with the use of this credit card, visit www.fidelity.com/retirementrewards and refer to the disclosures accompanying the online credit card application, or call FIA Card Services toll-free at 1-866-598-4971. This credit card program is issued and administered by FIA Card Services, N.A., which is not an affiliate of Fidelity Investments.

4There are no brokerage account fees on Fidelity's Traditional, Roth SEP and Rollover IRAs. Fund expenses and brokerage commissions still apply.

5Research conducted by Lightspeed Research for Fidelity Investments, March 2007

62008/2009 IRA Contribution Limit: $5,000; 2008/2009 IRA Additional Age 50 Catch-Up Limit: $1,000

7SmartMoney, "Top 5 Best Credit Cards," September 1, 2006

8 Fidelity Investments data as of November 30, 2008

9Applicants also can call FIA Card Services toll-free at (866) 598-4971

American Express is a federally registered service mark of American Express and is used by issuer pursuant to a license.

Registered trademarks and service marks appearing herein are the property of FMR LLC. 

Edited by: Neil Anderson, Managing Editor


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