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The age of the pension has swiftly declined since the 1980s, and more Americans than ever before must invest in their own retirement. Retirement planning and investing is crucial, as it can help you get through your golden years comfortably.
When you have many other financial obligations, it can be difficult to set aside funds for retirement. But some credit cards can help by earning rewards that can be redeemed directly into an investment account.
Here are three credit cards with retirement or investing rewards.
Fidelity Rewards Visa Signature Credit Card
Rewards: Two points per dollar spent on all purchases.
Sign-Up Bonus: None
Annual Fee: $0
Annual Percentage Rate (APR): Variable 15.24% APR on purchases and balance transfers.
Why We Picked It: You can redeem your rewards directly into Fidelity retirement accounts.
For Your Retirement: Every purchase earns two rewards points on the dollar. Points can be redeemed as deposits into eligible Fidelity retirement accounts, including a Traditional IRA, Roth IRA, Rollover IRA, or SEP IRA. Every $2,500 you spend is worth a $50 rewards deposit.
Drawbacks: If you aren’t a Fidelity member, you won’t see much value from this card.
Bank Americard Cash Rewards Credit Card
Rewards: 3% cash back on gas and 2% cash back at grocery stores and wholesale clubs on up to $2,500 in purchases each quarter; 1% back on all other purchases.
Signup Bonus: $150 bonus cash if you spend $500 in the first 90 days.
Annual Fee: None
APR: 0% APR for 12 months on purchases and balance transfers, then variable 14.24% to 24.24% APR.
Why We Picked It: Merrill Lynch investors can use this card to boost their investments.
For Your Retirement: If you use a Merrill Lynch Cash Management Account to invest in your retirement, this card can help you increase your contributions. Cash back can be redeemed for an electronic deposit into an eligible Cash Management Account, and those redemption types earn an extra 10% bonus every time you redeem.
Drawbacks: If you don’t have an eligible Bank of America or Merrill Lynch account, you’ll lose out on the 10% redemption bonus.
Edward Jones World Card
Rewards: One point per dollar spent on all purchases.
Signup Bonus: $100 account deposit if you spend $500 in the first 90 days.
Annual Fee: None
APR: Variable 14.24% APR on purchases; 0% APR for 12 months on balance transfers, then variable 14.24% APR.
Why We Picked It: Edward Jones members can redeem rewards for account deposits.
For Your Retirement: Every purchase you make earns one point on the dollar. Your points can be redeemed for cash deposits into an eligible Edward Jones account, including IRAs.
Drawbacks: You can only access this card if you’re an Edward Jones customer.
Choosing a Credit Card to Help You Save for Retirement
There are many ways to save for retirement: 401(k) plans, IRAs, and more. If you aren’t saving for retirement yet (or you think you need to save more), the time to start is now. The earlier you begin, the better shot you have of reaching your retirement goals. Until you decide on the best investment strategy, credit cards should be a secondary concern at best.
When you set up an investment account, you should understand all the different ways you can contribute, and find out if credit card rewards are an option (some investment accounts are more flexible than others).
Credit cards that let you directly redeem your rewards for an investment deposit are convenient, but they’re not the only way to contribute rewards to retirement. If you have a retirement account that accepts cash contributions, you can simply redeem any credit card’s cash back rewards for a check or bank deposit, then turn around and put that money in your account.
Whether you choose a rewards card with investment redemptions or not, try to find one that fits your spending habits. If you spend the most money at one or two merchant types, you should try to find a card that rewards those purchases. If your spending is unpredictable, you should find a card with a flat rewards rate on every purchase.
What Is Required to Get a Credit Card for Retirement Investing?
The best rewards cards require good or excellent credit. Before you apply, you should check your credit score to see if you’ll make the cut. You can check your credit score for free at Credit.com.
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Note: It’s important to remember that interest rates, fees, and terms for credit cards, loans, and other financial products frequently change. As a result, rates, fees, and terms for credit cards, loans, and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees, and terms with credit card issuers, banks, or other financial institutions directly.
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