Barclaycard Arrival Plus Vs. Fidelity American Express

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Update: This offer for the Barclaycard Arrival Plus(TM) World Elite Mastercard® is expired. Learn more about the current offer here.

UPDATE: The offers and terms of the Barclaycard Arrival & Arrival Plus have changed. You can find the best current offers here.

The Fidelity Investment Rewards American Express Card is one of the most lucrative cash back cards out there. It offers a flat 2% cash back on purchases without an annual fee. That’s a pretty darn good return for a no annual fee card, and makes it a “keeper.” The two major downsides are that the card doesn’t have a sign-up bonus and also has foreign transaction fees. So if you get it, it should definitely be with the long term value proposition in mind.

So how does it compare with the Barclaycard Arrival Plus™ World Elite Mastercard®? As a refresher, it offers:

  • 40,000 miles after spending $3,000 within first 90 days
  • Two miles per dollar spent on all purchases
  • You get a 10% refund on miles when you redeem them
  • Each mile can redeemed for one cent towards the cost of travel, meaning you’re getting a return of ~2.22 cents per dollar spent

Cash back towards travel is the same as cash back to me

A lot of people would say actual cash back is more valuable than cash back towards travel. For me that’s not the case, and I am guessing for most people reading this blog, that’s not the case either. Unless you spend less on travel than you’d earn in rewards, it’s the same thing. And that’s simply to say that the same amount of cash back would be equally valuable to me regardless of which form it came in.

The Barclaycard Arrival Plus™ World Elite Mastercard® has a better return the first year

You’re essentially earning ~2.22% cash back towards travel, while with the Fidelity Investment Rewards American Express Card you’d be earning 2% cash back. The Barclaycard Arrival Plus Card doesn’t have an annual fee the first year either, so you do come out ahead with it, by ~0.22% per dollar spent.

After the first year, the “breakeven” point is ~$40,500 of spend per year

The annual fee on the Barclaycard Arrival Plus Card is $89 after the first year. So how much do you need to spend on the Barclaycard Arrival Plus to get a better return than on the Fidelity American Express once you factor in the $89 annual fee?

Well, when you divide the $89 annual fee by the difference between the return (~0.22%), you’d need to spend ~$40,500 to get the same return. That’s a lot of spend in a non-bonused category.

There’s a lot of merit to the Fidelity American Express

The Fidelity American Express is unarguably a great card. 2% cash back with no annual fee is amazing, and makes it one of the best no annual fee cards for everyday spend. Most people won’t spend more than $40,000+ on the Barclaycard Arrival Plus in a non-bonused category, in which case the card might not be worth keeping past the first year if you can’t get some sort of retention bonus. I do think that depending on your card portfolio, there’s additional value in having the Barclaycard Arrival Plus Card, given the waived foreign transaction fees and Chip + PIN technology.

But if you’re someone that finds all these cards too confusing and just want a good return on your everyday spend, the Fidelity American Express should be a contender.

Why don’t I yet have the Fidelity American Express Card?

So why haven’t I applied for a card that’s worth keeping long term? There are two reasons:

  • I have a hard time applying for a card without a sign-up bonus
  • I achieve a better return on another card where I don’t account for the annual fee

First let me explain that I take a more conservative approach than some when it comes to applying for cards. I don’t keep applying until I’m on the verge of being denied. I live in hotels full time, and may want to buy a place at some point, so I’m not living on the “credit score edge.”

With that in mind, let me explain why I have a hard time applying for a card without a sign-up bonus. Just to give an example, I have several Alaska Airlines Visa Cards and have yet to be denied. The card frequently has a 30,000 mile sign-up bonus upon approval, and I value those miles at two cents each. So that’s $600 in “rewards” just for applying. Given my approach of not “living on the edge” when it comes to applying for cards, the direct opportunity cost to applying for the Fidelity American Express Card is $600. I’d need to spend $30,000 on a card to earn $600 in rewards, and that doesn’t account for the points I could earn by putting that spend on another card. In other words, I’d need to spend a lot of money before I recouped the lack of a sign-up bonus.

But beyond that, I also have the Starwood Preferred Guest® Credit Card from American Express. It has a reasonable $65 annual fee, and that’s a card I continue to keep for no other reason than that it offers two elite stay credits and five elite night credits towards status with Starwood annually. To me that recoups the annual fee and then some. But beyond that on everyday spend I earn one Starpoint per dollar spent, which I value at well over two cents per point.

That’s just my situation, though everyone’s situation will vary, of course.

Bottom line

The Fidelity Investment Rewards American Express Card is a great card. Unless you value the lack of foreign transaction fees, Chip + PIN technology, or spend more than $40,000 in non-bonused categories per year, the Barclaycard Arrival Plus™ World Elite Mastercard® probably isn’t worth keeping long term. But at the same time applying for a card without a sign-up bonus is pretty painful, in my opinion.

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Comments

  1. @Lucky-don’t you find it more difficult to use or recommend any American Express for an everyday spend when so many retailers turn up their noses when an American Express card is shown? Too many have flat out rejected accepting them. Maybe I need to step up my places I spend but I just don’t get rejections using a Visa or M/C.

  2. I like to have the MC when Amex isn’t accepted – which does happen pretty often to me, despite what the reviews on Amex’s website say. Also, as a travel enthusiast, it’s nice to have a built-in “savings” account toward travel. My actual savings accounts are for home or car expenses, so I wouldn’t get to travel otherwise!

  3. Hey Lucky, the 30k Alaska card link seems to be broken, or has been pulled. Do you know of any 30k offers still functioning at this point?

  4. In the course of digging through my parents junk mail, I’ve found offers for the fidelity Amex with a sign up bonus. Though I’m pretty sure those offers are only avalable for fidelity customers. (Which we are) Fidelity also has a cobranded Amex platinum with a lower (or free, I can’t remember) and an average sign up bonus too. (Around 40-50k)

  5. Lucky — I do wish at some point you’d fold the Amex Everyday into your analyses. It offers 1.5 Amex per $1 of non bonus spend if you do 30 transactions, which has proven very easy for me. I think, given your prior valuations, you value 1.5 Amex as worth a bit more than 1 SPG. So, why not the Amex Everyday instead of SPG for spend? Based on your post, I can see two reasons — first, the sign up bonus is only 15,000 points. Not great, but nothing to sneeze at, and clearly justifies the first year fee and then some. So, at that point, the question is whether it makes sense to keep the card for $95 a year. Let’s assume you’re going to keep the SPG no matter what for the night and stay credit. Accordingly, even though the spread is only $30 in the annual fee, the question is whether you should take on the full $95 extra for the Everyday. I think that’s an easy yes.

    I value 1.5 Amex around 2.35 cents. I view SPG around 2 cents. At this rate, you need to put about $27,000 on the Everyday in nonbonus spend to make up the difference. Same calculation against the Fidelity card — $27,000. That’s pretty high.

    But it’s not the end of the story. There are a few other benefits with the Everday. First, you have the opportunity to earn 4.5x on grocery spend up to $6,000 per calendar year, which is very very easy (especially if you buy plastic and not food). The best I can do with another card for groceries is 2x. (If you have the blue cash card, you’re getting 6 % on your first 6k, but then only 1 %. So you need to have $12k in grocery store spend in the year with Amex Everyday and use it for the second $6k.) So, for me, having the everyday gets me an additional 2.5x for $6,000 in groceries, or another 15k points every year. It also gets me 3x at gas stations, which beats any other card I have. For about $4,000 a year, that’s another 4,000 extra Amex. So, by holding this card, I’m easily justifying the annual fee with 19,000 extra Amex. And, once you hold the card, earning 1.5 Amex per $1 on nonbonus spend is better than any other card out there that I really know of, unless (a) one values 1.5 amex at less than 2.2 cents, or (b) one is willing to figure out and can use the 21-day advance crazy round trip flex awards bookings with the Fidelity card.

  6. Remember, the Arrival Plus has the RewardsBoost online mall (currently offering an extra 4points/$ at hotels.com, 2points/$ at apple.com, etc). This is how I plan to offset the annual fee, and then some…

  7. In my opinion, Fidelity American Express is way better. First, being an Amex card, you get access to most of Amex offers, which saves you at least $100 per year. Second, each Fidelity points is worth up to 1.6 cents when redeeming Premium Air Rewards. So it offers up to 3.2% cashback with no annual fee. You cannot really ask for more.

  8. @Larry The best blue cash card brings you 5% cash. no limits 🙂 Beats the everyday card by a mile !

  9. @chris, there is the Worldpoints mall for the Fidelity AMEX–I’ve been able to find some gems there which were shut off on other portals.
    Also, ditto what @RW said – this is a very under-advertised benefit that can get you up to a $400 domestic flight for 25k if I remember the rules correctly.

    They used to transfer to Air Canada, which was useful for me, but no more.

  10. I use Chase Mileage Plus for UA tics (3+pct + pqms, dining and groceries (2+pct), Chase Freedom for 5pct categories, Chase Hyatt for foreign, and Amex Fidelity for all else. I don’t churn so that works for me.

  11. Why do you continue to ignore the fact that 2x Fidelity points can be redeemed for (up to) 3.2% travel return? That seems a lot better than 2.22% from Arrival, particularly for someone skilled in extracting maximum value from points.. Google: The Best Travel Cash Back Card, And How to Use it by milenomics.

  12. @ David W — Shoot, it looks like the best offer is 25K for now. I’m sure the 30K will come back soon enough.

  13. Yeah… There are publicly available bonuses and you can leverage the rewards to get better than the Arrival Plus 2.2% for travel. It is difficult to say whether these facts are unknown or just being conveniently overlooked due to some affiliate link bounty ca$h.

  14. @HikerT and RW: What you both very conveniently fail to mention is that the 3.2% rate only applies if you’re:

    1) Flying between the US and Canada/Mexico
    2) Flying in Economy
    3) Limited to a ticket price of $600 or less
    4) No stopovers of >4 hours
    5) Saturday night stay required

    Restrictions 4 and 5 apply even if you fly elsewhere or in a different class. And the redemptions are categorized based on the ticket price. Want to go to Europe in Economy? That’ll be a 2.6% return on a max ticket price of $800. Want a business class ticket that goes for $2,000? Redemption plummets to under 2%

    @Harry: Which Blue are you talking about that offers unlimited 5% back? The top tier Blue Cash Preferred nets you 6% back… on the first $6,000 worth of groceries. After that it drops to 1%.

  15. Lucky, is there any way to follow comments on a post without making one? Any chance that option could be added?

  16. @ Gaurav — I’ll check if that’s possible, but don’t think it is. You’re always more than welcome to leave a one word comment if you simply want to track follow up comments.

  17. You’re math is wrong. You can’t count the 10% rebate you get on Arrival, but not count the 2% rebate you get on Fidelity. When you get 2% back, and respend it, you get 2% on that, and 2% on that rebate etc.

    If you do a true apples to apples comparison, the rebate on Fidelity is actually 2.0404040404…

    So the actual “break even” point is about $49000. And that’s not including the above mentioned comments about how you can very well get more than 1% on the Fidelity

  18. While I don’t totally agree with the analysis, thanks for the honest and insightful post Lucky. Much appreciated and apologies in the previous thread for the hyperbole.

  19. Why is the Cap One Spark 2% everyday always forgotten about? No need for Fido account. Granted, a small business card and Cap 1 pulls from all 3 credit bureaus, but it should be discussed as its one of the oddball issuers that few have in their wallet. There’s a public $300 signup offer with waived annual fee ($59 thereafter). I signed up with targeted $500 bonus with $4.5K spend in 3 months.

  20. Re Amex acceptance – a major pain point is that a lot of merchants where one may have high non-bonused spend (in my case auto mechanics, medical practicioners, veterinarians, continuing ed providers) don’t accept Amex. So, if I wanted the highest cash back on my non-bonused spend, my break-even point for Arrival would be way less than the $40,000+ consistently quoted in the blogs.

  21. @UAPhil Fidelity has a Visa version that returns 1.5% with no annual fee. The breakeven at that point would be about $12,500 in spend.

  22. Thanks, Andrew!! Now that I’ve traded my BMW in for a practical car, I probably won’t have $12,500 in non-bonused cash back spend each year. So the Fidelity Visa might make sense for me. 🙂

  23. Will interrupt the scheduled Arrival vs. Fidelity battle to vent that SPG Amex would’ve been sweeter without a foreign transaction fee. Felt weird using a Chase card to pay at Starwoood hotels overseas. At least, they could rebate fees for spend on SPG hotels *sigh*

  24. @Steven L The other thing to note about the fidelity premium air awards is that you can only approach the maximum value if you’re redeeming at or very near the maximum allowable amount. For example, the 3.2% number (actually 3.26%) only applies to a ticket to Canada, Mexico, or Puerto Rico for exactly $600. Anything over $600 is not eligible, as you note, and every dollar under $600 starts to reduce your net. For flights other than Canada, Mexico and Puerto Rico, the maximum possible return drops to under 3%.

    For example, if you find yourself in need of a $350 domestic USA ticket, you don’t get anything close to 3.2 percent. Your return would be 2.56%. Still better than Arrival, but not nearly as much of a difference, and for the minor difference you give up a lot in terms of not having to worry about round trip only, Saturday night, 21 day advance, etc.

    A credit card that gives you a certain amount of cash to spend on certain types of expenses, as opposed to straight cash back, is only as good as cash back if you have enough of those type of expenses that you can always use the points in lieu of money. As Ben has said, that should be true for most blog readers for the Arrival card, since we all tend to have out of pocket travel expenses. If you expect to spend $1500 a year on travel, then someone giving you $1500 in credits to use for travel is just as good as getting $1500. This principle only works for premium awards on the Fidelity card if you have so much travel that you frequently find yourself in need of 21-day advance Saturday stay tickets right at or near the exact price points. I think where this card may have its most value is for mileage runners. If you don’t particularly care where you go, and you can get your desired cents per mile on a variety of trips and can construct them to be at or very near the $400/$600 etc. price points, then getting 2.75 cents to 3.2 cents per dollar of nonbonus spend may indeed be an effective way to buy status.

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