Can the Fidelity Amex give more than a 3% value when used for travel? Yes, it can!

Just last week, I wrote about the Fidelity Amex that came with a $50 bonus.  Since then, there’s a better bonus of $75.  For a no annual fee card, it’s probably one of the very best cash back cards out there.  Although it’s a 2% cash back on everything, there is a way to extract more than 3% (with limitations or course).

With the Fidelity Amex, you earn 2 Worldpoints per dollar spent.  Those worldpoints can be redeemed once you login to the worldpoints portal through www.fiacardservices.com

So, if you spent $12,500 on the card, you would get 25,000 worldpoints which is equal to $250 when redeemed into a Fidelity account (a 2% return).  However, those 25,000 worldpoints can also be redeemed for airfare purchases.

2 different flight redemption options:

Worldpoints can be redeemed for 2 types of airfare rewards, the FlexAir award or the Premium Air Award.  The FlexAir award has no restrictions, but the redemption rate is the same as transferring the money into your Fidelity account (For 25,000 points, you can redeem any flight worth $250).  The Premium Air Award has restrictions, but presents an opportunity for arbitrage.

The Premium Air Award has interesting redemption options.  For example, you can redeem a ticket worth $400 for 25,000 points within the 48 contiguous United States.

At first glance, this looks fantastic.  You spend $12,500 on the card, get 25,000 worldpoints ($250) which can be redeemed for $400.  That’s equivalent to a 3.2% return, certainly more than the 2% if the points are deposited into Fidelity.

However, there is a $30 fee for booking a Premium Award which decreases the return.  With this fee, you are paying $280 to redeem a $400 ticket.  To have some fun with the math, I am going to say that $30 is equivalent to 3000 worldpoints which can be obtained by spending $1500 on the card.  What this means is that each award is really 3000 more points than what is listed.  For example, a $400 ticket is actually 28,000 points ($280 if redeemed into Fidelity), not 25,000 ($250).  I hope I am making sense here.

Calculating the true rate of return with the $30 booking fee taken into consideration:

Destination	$ spent on card	Points earned	Redemption value	Rate of return
Continental US	$14,000	28000	$400	2.857%
Canada, Mexico, Puerto Rico	$19,000	38000	$600	3.158%
Alaska, Hawaii, Bermuda, Bahamas, Caribbean	$24,000	48000	$600	2.5%
Europe	$31,500	63000	$800	2.54%

 

There are some key restrictions to book the Premium Air award:

• Lowest economy fare available
• 21 day advance purchase
• Saturday night stay required
• Stopovers of 4 hours or more are not allowed
• Must be roundtrip

The test

I wanted to see if I could really get a $400 ticket for the 25,000 points plus the $30 fee.  I searched on Kayak for a ticket and found the following:

I ran the same search on the Worldpoints booking engine and found the following:

You can see that Delta and United have the cheapest economy class available for the dates that I chose.  When I clicked on the Delta ticket, you can see that you really can book that ticket for 25,000 points + $30.

When you pick a ticket over $400 or one that is NOT the lowest available economy fare, the Premium Air Reward option does not appear:

How about a ticket to Canada, Mexico, or Caribbean?  According to my table above, you get greater than a 3% return if you can find a $600 ticket to those destinations.  Here’s what I found when searching for a ticket to Canada.

It works!  The terms and conditions don’t lie!  If you book this online, there are no additional fees. If you book this over the telephone, there is a $10 additional fee.

Summary:

The Fidelity Amex may be an even better card for travel than it is for cash back, if you can get passed the restrictions of the Premium Air Award.  I gave 2 successful examples above, so the restrictions are certainly not an issue.  Of course, to get the full rate of return, the ticket value for a domestic ticket has to be exactly $400 and a ticket to Canada, Mexico, or Caribbean exactly $600.  I didn’t care to evaluate other destinations as the spend requirement on the card becomes quite steep.

In addition, the flights booked with the card will earn “butt in seat miles” since it’s a paid ticket, unless you are flying Delta of course 🙂

If you enjoy credit card rewards, travel, tips and tricks, then subscribe to the blog via email, like us on facebook or follow me on twitter!