Following close on the heels of Schwab’s introduction of its 2% cash back card, Fidelity Investments announced the Fidelity Retirement Rewards American Express Card. The new card carries no annual fee, caps or limits on its rewards, and earns a 2% rebate on purchases when rewards are redeemed as a current year contribution into a Fidelity IRA.

More specifically, card holders earn two points for each dollar in purchases. Once at least 5,000 points have been accrued, points can be redeemed for a $50 current year contribution into a Fidelity IRA. If the current year contribution has been maxed out, points can continue to be accrued, but cannot be applied towards an IRA contribution until the following year. Alternatively, the points can be redeemed towards travel, merchandise and other rewards, though these options present less value.

This new offering joins a couple of existing Fidelity credit cards: the Fidelity Investments Rewards Visa Signature Card which currently earns a 1.5% rebate that can be deposited into a non-retirement Fidelity account, and the Fidelity Investments 529 College Rewards Amex which earns 1.5% to be deposited into a Fidelity 529 plan.

According to the WSJ, Fidelity also plans on increasing rebates on its other credit cards to 2% in early 2009. Assuming that Fidelity follows through with these plans, the Fidelity Investments Rewards Visa Signature Card becomes the most attractive of the trio, since deposits to a non-retirement account are the most generally accessible.

To apply for the new Fidelity Retirement Rewards Card, you can visit
www.fidelity.com/retirementrewards or call 1-800-FIDELITY(9).