One of the best true cashback cards is the American Express Fidelity Investment Rewards Credit Card which offers an unlimited 2% cash back on all purchases with no annual fee. Generally this card doesn’t offer a signup bonus (or at least one I can find on the Fidelity website) but my wife just received an email with a link to apply for this card with a 5,000 point signup bonus after spending $500 in the first 60 days.
The 5,000 point signup bonus is worth $50 and since this card rarely offers a signup bonus, this is a good opportunity to apply for this card if you want a true cashback card. In fact, if you click the link for this card on the Fidelity website it doesn’t show you this offer.
Here is the link to apply for this card with a 5,000 signup bonus.
Using this card as a baseline, you should be earning at least 2% off on every single purchase you make that can be charged to a credit card. Personally I prefer to collect miles instead of cashback but for those out there that don’t want a travel rewards credit card, this is the best cashback card I am aware of as there is no annual fee unlike some other 2% cashback cards.
You don’t get 2% off by using cash or a debit card so if you are still using cash or a debit card, STOP and switch to this card. There is literally no cost to this card (except for foreign transaction fees, so don’t use this outside the US) and all the cashback proceeds get directly deposited into your Fidelity account (which is free to signup for), and funds can easily be transferred to your bank account.
Again, I want to stress this card is great for people who want to earn cashback and don’t have any desire to collect points or miles. Using a cashback card will not help you fly internationally or in preimum cabins but could work for you if you fly cheap, domestic tickets. I’m highlighting this offer because it is rare to see a signup bonus on a 2% cashback card that has no annual fee (the new Citi Double Dip card also offers 2% cashback with no annual no fee but that has no signup bonus).
I talked about Credit Karma in my Points & Miles 101 series and how it’s a great service to get an accurate estimate of your credit score for free. Recently, they just enhanced their service by including your credit report for free with no strings attached!
Full Credit Report!
Typically, the only way to get a free credit report was to use the government’s website (www.annualcreditreport.com) which allowed you to access your credit reports from each of the three big credit reporting agencies – Equifax, Transunion and Experian – once a year. With that method, it’s important to note that you have the choice to access all three reports at once or you could spread them out over the year, for example downloading one of the reports every 4 months, so you always have a more current credit report. Thankfully Credit Karma’s credit report is available without any restrictions, it’s updated weekly with any new information and it can be viewed every time you log into your account at Credit Karma.
While the credit score Credit Karma estimates for you is not your exact credit score but rather a rough estimate of what it is based on their own proprietary algorithms, these credit reports Credit Karma is producing is your ACTUAL Transunion credit report! Let me repeat that – this is your real, live, accurate Transunion credit report – not some estimate or guess to what it is like their credit score calculator.
To check this, I downloaded my Transunion credit report for free via annualcreditreport.com and compared it to the credit report on Credit Karma. Credit Karma was reporting 32 accounts (both open and closed) which actually sounded a bit high to me. I cross checked that to my actual Transunion report and it in fact, matched perfectly! If Transunion reported an account opened or closed, Credit Karma showed the same identical information with no discrepancies. Credit Karma even notified me that on my credit report the credit limit on one of my cards was not being picked up. I sure enough checked my Transunion report and saw the credit line field for that card was blank. I intend to followup with Transunion to see what the issue is and to get that fixed. I compared a few other items and I could not find any differences between the two reports.
Snapshot of My Credit Report from Credit Karma
To summarize, Credit Karma has added an awesome benefit for FREE for its users that everyone should use. It’s smart to maintain good credit health but checking your credit score and credit reports if you are involved in the points & miles game is even more vital as you need to make sure everything is being reported to the credit agencies correctly. If not, this could impact your credit score and lead you to getting denied for huge signup bonus on credit cards that you actually are entitled to. And that means no free travel 😦
As I alluded to in my last post in Points & Miles 101, in addition to getting your free credit report, there are a few ways to get your credit score for free as well!
There are several companies out there they will provide you with an accurate representation of your credit score for free with the two most popular companies being Credit Karma and Credit Sesame. Now I want to be very upfront, the scores provided are not your FICO score but instead a CLOSE estimate to what your actual FICO score is. Now I’m sure their names sound ‘gimmicky’ to you but as a user of both services (in addition to thousands of other), I can personally vouch these companies are legitimate and 100% FREE.
Each company has developed algorithms that closely mimic the calculation FICO uses to determine your credit score. By inputting your social security number, you agree to give them access to your credit history which then allows them to run their algorithms to determine your credit score.
I’m sure I just set off a big red flag in your head since you have to provide your social security number to a company you’ll probably never heard of before this post. However, I’m here to assure you these sites are VERY secure with high level encryption software. If you think about it, if you’re comfortable giving your social security number while applying for a credit card on a bank’s website why would you not be comfortable doing this? You can read more about their security here.
Ralph’s Credit Score
Additionally, because I know this question will come up, there is absolutely NO impact to your credit score for doing this. If you were to check your FICO score, there is a very small impact to your score because an inquiry was made on your account. However, since the score provided is not your FICO score, you don’t have to worry about this.
I think every person should review their credit reports and know their credit score – this is financially responsible behavior. If your credit report is wrong, fix it. If your credit score is under 700, start taking steps to improve it. Even if you have no interest in doing these items related to points and miles, you should do it to remain financially healthy. Plain and simple, this is just good personal finance advice.
*Please note if enough people signup for Credit Sesame via the link above, I will earn a small commission. As a user of this product, I would strongly recommend it whether I was paid a commission or not. I do not earn a commission on Credit Karma.