If you thought about getting the Priceline Rewards Visa which gave 2% rewards on everything but you procrastinated, now it’s too late. The 2% program is no longer offered to new applicants. Now you only get 1%.
Existing cardholders are still grandfathered in the 2% cash back program. This, and the previous experience with the Schwab Visa, show that 2% rewards on a Visa or MasterCard for every purchase with no special categories and no caps is a good deal that will not last. Next time you hear about one, jump on it right away. Use it while it lasts.
If you didn’t jump on it, Fidelity AmEx is the only one still available that gives 2% rewards on everything with no annual fee. All other 2% reward cards, including the Barclaycard Arrival Plus™ World Elite MasterCard®, Capital One Venture, and BankAmericard Privileges with Travel Rewards, follow this setup:
- An annual fee, waived in the first year
- No foreign transaction fee
- 2% rewards or more redeemable against past travel purchases
The annual fee will make sure you will use it as the primary card to make the annual fee worth it. Limiting the highest redemption percentage against past travel purchases will make sure you charge those high-dollar travel purchases to this card. The merchant fee rate is about the highest in the travel categories. High dollars times high fee rate equals high profit. If someone isn’t patient enough to wait for a travel purchase, the rewards will be redeemed at a lower rate. All these factors make this setup more sustainable than straight 2% rewards.
Fidelity AmEx is able to keep the 2% rewards because (a) Fidelity’s marketing budget supports it; and (b) the American Express network charges a higher fee to the merchants.
Of these remaining 2% rewards cards, Barclaycard Arrival Plus™ World Elite MasterCard® is the best. It offers 2.2% rewards and a much larger signup bonus ($400 vs $100) which effectively pays the annual fee for five more years after the first year.
[Photo credit: Flickr user Jason]