Best Credit Cards for Investing Rewards: Turn Spending Into Savings

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Did you know that you could boost your investment or savings account while making everyday purchases with your credit card?

There are credit cards on the market that will reward as much as 2{d54a1665abf9e9c0a672e4d38f9dfbddcef0b06673b320158dd31c640423e2e5} on every purchase that you make and then automatically deposit those cash back earnings into the account of your choice.

So while you’re spending, you also could be earning for your future.

Team Clark has analyzed the credit card market to spotlight some of the best options for saving and investing your rewards.

We also have talked to money expert Clark Howard to develop the optimal strategy for investing credit card rewards.

What Types of Credit Card Can You Use for Investing?

As long as you’re not required to use your credit card rewards for specific things like airline miles or hotel nights, there should be way to convert those rewards into an investable asset.

You can get a check from some cash back cards and then invest the money yourself. But there are cards out there that simplify the process for you, making automatic deposits to an account that you choose.

For the purposes of investing and saving credit card rewards, there are three different types of rewards card that are ideal candidates:

Brokerage-Branded Credit Cards

These are credit cards that carry the name of some of the biggest financial brokerage companies in the United States.

In exchange for using their branded card, you’ll receive rewards that are geared toward investing in their products or services.

For example, the Fidelity Rewards Visa Signature Card offers 2{d54a1665abf9e9c0a672e4d38f9dfbddcef0b06673b320158dd31c640423e2e5} cash back on all your spending as long as it is applied to a Fidelity investment product.

This can be an easy, passive way to turn credit card rewards into long-term investments.

We’ll focus on this type of card extensively later in this roundup.

Cash Back Credit Cards

No matter what your savings goals are, keeping a solid cash back credit card on hand can be a smart decision.

With cards such as the Citi Double Cash or the PayPal Cashback Mastercard, you can earn unlimited 2{d54a1665abf9e9c0a672e4d38f9dfbddcef0b06673b320158dd31c640423e2e5} back on everything you purchase. That percentage is better than many of the brokerage-branded cards on the market.

You can request a check or direct deposit for your cash back earnings with these cards, which would allow you to then invest your gains.

Select Local Bank or Credit Union Credit Cards

Another place to look for a credit card that will help you invest or save your rewards is your local credit union or bank.

There are often good credit card offerings on the local level, and some of those may have ties to investment products offered by that bank or credit union.

Since the options vary from community to community, we won’t spend too much time on this type of card in this article.

However, you should check with your local banks and credit unions as you’re doing your due diligence in this process. They could have a great fit for investing credit card rewards.

What Types of Investing Can You Do With Credit Card Rewards?

The concept of investing for the future, while simultaneously using a credit card in the present, may seem counterintuitive on the surface.

But with some discipline and the right rewards card, it can be done effectively.

Some of the credit cards on this list will help you invest and save efficiently by automatically depositing your rewards into investment products. Others will give you the cash value of your rewards, which you can then turn into savings or an investment on your own.

Some examples of the type of investing or saving funding you can fund with your credit card rewards include:

Retirement accounts, such as a traditional or Roth IRA
Brokerage accounts, which allow you to invest in stocks, bonds or commodities
College savings plans, such as a 529 plan
Long-term savings vehicles, such as money market accounts or CDs
Short-term savings accounts, which could help you build up your rainy day fund

Best Rewards Credit Cards for Investing and Saving

For this roundup, Team Clark has reviewed several of the top brokerage-branded credit cards as well as the top flat-rate cash back credit cards on the market.

Here’s what you need to know about each of the top options: