Fidelity Drops American Express, Switches to Visa
Fidelity has ended its 12-year credit card partnership with American Express and Bank of America, and will now offer Visa-branded cards through U.S. Bank.
The company said it made the switch because it believes its Fidelity Rewards Visa Signature card will attract a wider group of people, including Millennials. Also, Visa is accepted by more merchants than American Express. The company promises customers that the benefits they have on their American Express will transfer to the Visa card.
This is another blow to American Express. Last year, the company saw its 16-year partnership with Costco dissolve.
“Customers using Fidelity’s 2% cash back credit cards have earned more than $1 billion in cash rewards since 2003, demonstrating that the opportunity to use everyday spending to help bolster contributions for longer-term savings and investment goals is too good to ignore,” said Ram Subramaniam, president of Fidelity’s retail brokerage business, in a statement.
The partnership will mean that U.S. Bank will issue the Fidelity® Rewards Visa Signature® Card and the Fidelity Investments 529 College Rewards®Visa Signature® Card. Both cards offer unlimited 2% cash back on purchases without annual fees or caps. The rewards have to be deposited into eligible Fidelity accounts to gain maximum benefits.
The new cards will have chip technology, and will work with Apple Pay, Samsung Pay and Android Pay.
“We are excited about Visa’s expanded agreement with Fidelity Investments and U.S. Bank, and how together we will bring cardmembers convenient, innovative and secure ways to pay while helping them earn rewards to help fund life’s most important milestones,” said Ryan McInerney, President Visa Inc.
“Fidelity Investments and U.S. Bank are two of the most respected brands for helping Americans achieve financial security,” said Shailesh Kotwal, vice chairman of payment services for U.S. Bank. “Together, we are able to offer a new card program that builds on our reputations, making it even easier for customers to plan and build for their financial futures.”
U.S. Bank has also acquired Fidelity’s co-brand credit card portfolio, which carries approximately $1.6 billion in balances.