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This past week, TPG reader Manu sent me a message via Facebook:
“What is the advantage of the Barclaycard Arrival over the Fidelity Investment Rewards American Express Card, which also gets 2% cash back on all purchases, but (unlike the Barclaycard) has no annual fee?”
When it comes to cash back, the Fidelity American Express (which earns 2% across the board and has no annual fee) is hard to beat. Manu wants to know why anyone would bother the Barclaycard Arrival (an ostensibly similar product) when it has an $89 annual fee (waived the first year). There are a few reasons.
First, Arrival has no foreign transaction fees, so if you’re an international traveler, you don’t want to use your Fidelity Amex abroad. That difference alone could easily make up for the annual fee if you’re someone who puts a significant amount on your card outside the U.S.
Beyond that, if you’re going to redeem for travel anyway, then the Barclaycard Arrival actually gives you 2.22% back on all of your spending, since you get a 10% rebate when you redeem points for travel expenditures. Barclaycard just announced that they expanded the list of eligible travel categories and increased the redemption period from 90 days to 120 days, giving you a full four months to cover your travel expenses with points. They also just launched Chip and Pin capability, which makes the card even more useful for international travel. I just traveled to France last week and was able to easily purchase train tickets at unmanned kiosks, where other Chip and Signature cards would have floundered.
Lastly, Barclaycard Arrival has a killer signup bonus! You’ll get 40,000 points after spending $3,000 in the first three months. Again, that annual fee of $89 is waived the first year, so in the short run, the Arrival card earns a TKO against the Fidelity Amex. Still, you should do the math to determine whether the annual fee makes sense for you given the extra 0.2% earnings and the added perks. I think for international travel it absolutely makes sense, but for someone who’s only going to have one card and doesn’t want to pay any fees, Fidelity is a solid choice.