2010 Credit Card Guide
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credit cards
Brokerages offer big credit card rewards

Cardholders earn two rewards points for each dollar that they spend on purchases with the cards. And once a cardholder earns 5,000 rewards points, equal to $2,500 of spending on the card, a $50 contribution is made to a Fidelity-managed 529 account that's linked to the credit card account.

The twist? Friends and family members can all link their Fidelity Investments 529 College Rewards American Express cards to a single 529 account. So you could have a lot of different folks contributing cash rewards to a 529 account dedicated to your son's or daughter's college education.

"You can have grandparents, aunts, uncles and whoever else making a contribution, which is a pretty nice way to handle it," says Adam Jusko, founder of IndexCreditCards.com.

And the more folks you have charging away on Fidelity Investments 529 College Rewards cards, the more it can help to boost a young son's or daughter's future college fund.

Cold cash, too

Those looking for less altruistic and more immediate rewards may want to check out the Schwab Bank Invest First Visa Signature card. You earn unlimited 2 percent cash back on all the purchases that you make with the card. And the cash rewards are automatically deposited into a Schwab One brokerage account at the beginning of each month.

You may withdraw the cash at any time or use the cash to purchase investments such as stocks, mutual funds and certificates of deposit.

"If you prefer you can get 2 percent back into your hands," Jusko says. "It doesn't tie you to only investment accounts."

And unlike most credit cards, the Schwab Bank Invest First Visa Signature card does not charge fees for credit card transactions made in foreign currencies, which could be a real plus for people who make frequent trips overseas.

Most banks and credit card issuers charge foreign currency conversion fees, ranging from 1 percent to 3 percent, each and every time a customer makes a purchase outside the United States.

Those fees can really add up, especially for businesses and other travelers who make a great deal of card purchases in foreign countries. For these folks, traveling with a card that doesn't charge fees for foreign currency transactions would make a whole lot of sense.

Picture perfect or punished

To get the most value out of the Schwab Bank Invest First Visa Signature card, you'll need to be a picture-perfect customer.

The card comes with a variable interest rate of 13.24 percent, a penalty interest rate of 21.24 percent and late fees as high as $39.

Carry a balance and any rewards cash that you earn will be wiped out by finance charges. Pay late and you'll be charged a late fee as high as $39.

Pay late twice in any 12-month period and a penalty interest rate of 21.24 percent kicks in.

The rewards cards linked to Fidelity investment accounts also inflict some pretty serious penalties if you should fail to pay your account on time.

Pay late and late fees as high as $39 will be applied to your account. Pay late or go over your card limit twice in any 12-month period and your account will be hit with a penalty interest rate of 27.24 percent.

And there's nothing rewarding about that. So be perfect with that rewards credit card or be prepared to pay.

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Editorial Disclaimer: The editorial content is not provided or commissioned by the credit card issuers. Opinions expressed here are author’s alone, not those of the credit card issuers, and have not been reviewed, approved or otherwise endorsed by the credit card issuers.

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