Tag: Ally

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Credit Cards, Earning Cashback, Reviews

Ally CashBack Credit Card Review: Is it Worthwhile if You Don’t Bank with Ally?

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Last year, Ally Bank rolled out the Ally CashBack Credit Card with a rewards program that offers 2% cash back on gas and groceries with no cap.

In addition to the cash back you earn from spending, Ally gives you a special 10% Ally Deposit Bonus when you deposit cash back earned into an eligible Ally Bank account.

Ally CashBack Credit Card

APPLY NOW Secured

on Ally Financial’s secure website

Ally CashBack Credit Card

Annual fee
$0 For First Year
$0 Ongoing
Cashback Rate
2% on certain categories, 1% on everything else
APR
13.99%-23.99%

Variable

Credit required
excellent-credit

Excellent

The Ally CashBack Credit Card Offer

1. Earn up to 2.2% cash back at gas stations and grocery stores.

Factoring in the 10% Ally Deposit Bonus, you have the potential to earn a total of 2.2% cash back in the gas and groceries category.

You have to deposit cash back earned into a qualifying account to get the 10% bonus. Qualifying accounts include:

  • Ally Money Market accounts
  • Non-IRA Online Savings accounts
  • Interest Checking accounts

Fine print alert: Discount stores, superstores, and warehouses are not included in the groceries category. Stores like Target, Walmart, BJ’s, and Sam’s Club specifically may be off limits for 2% cash back.

Ally Bank qualifies your purchases for cash back using merchant codes. You can call up a store directly to see if it has a merchant code within one of these eligible 2% cash back categories:

  • Grocery
  • Bakery
  • Dairy
  • Service stations
  • Automated fuel dispensers
  • Fuel dealers

2. Earn up to 1.1% cash back on all other purchases.

Purchases outside of groceries and gas earn 1% cash back. You can earn a total of 1.1% if you add in the 10% Ally Deposit Bonus.

3. Earn an introductory incentive.

There’s an introductory bonus of $100 if you spend $500 within the first three months of having this card.

How to Redeem Cash Back

You can redeem cash back in two ways. As mentioned, you get the extra 10% bonus if you deposit cash back into an eligible Ally Bank account.

The second option is redeeming cash back for statement credit. You need to build a balance of at least $25 before you can redeem cash back.

What We Like About the Ally CashBack Credit Card

You guessed it — we think the most attractive feature of the Ally CashBack Credit Card is the 10% Ally Deposit Bonus. We also like that this card has no spending cap for the 2% categories.

Other benefits are that there’s no annual fee and the interest rate range is reasonable.

The card even has a 0% APR introductory deal on balance transfers, although the 4% balance transfer fee is something to consider before moving your money.

The Ally CashBack Credit Card Fine Print

One of the major drawbacks of this card is the merchant code restrictions.

Don’t get us wrong — the Ally CashBack Credit Card isn’t the only cash back rewards program that uses merchant codes to qualify purchases. Pretty much every niche category card has some fine print related to what you will and will not earn bonus cash back on.

Before shopping at a warehouse or specialty food store with this card (or any category card for that matter), double-check the merchant code to see if the purchase will be eligible for 2%.

One more spot where the Ally CashBack Credit Card has fine print is the program termination policy. If your account is canceled for any reason, by you or Ally Bank, you forfeit the cash back balance. Ally Bank also reserves the right to change terms or cancel the cash back program. If this occurs, you may give up your balance.

To avoid losing out on money, keep the card in good standing and cash out whenever you hit the $25 mark just in case Ally Bank should change terms in the future.

Who the Ally CashBack Credit Card Is For

This card is best suited for current Ally Bank customers, but even people who bank with Ally should explore other options.

For non-Ally Bank customers, the 2.2% on gas and groceries is not worth opening two new accounts (the credit card account and a qualifying savings or checking account) to earn maximum cash back.

There are too many other category cards to consider ahead of this one that can give you more than 2.2% on gas and groceries.

There are even a few cards that offer you 2%+ cash back on all spending with no pesky category restrictions to keep up with.

We’ll share two alternatives with you in the next section.

But first, here’s an example to give you an idea of how much you can earn with the Ally CashBack Credit Card:

Say you spend $4,000 per year on groceries and $2,000 on gas. You can earn up to $132 in cash back for the year. (This includes the 10% Ally Deposit Bonus.)

Keep this scenario in mind because we’ll reference it next when reviewing a competitor.

For eligibility criteria, Ally Bank doesn’t get specific about the type of credit history or score you need to get approved.

However, some applicants have reported getting declined because of too many recent inquiries or new accounts. These are factors to be mindful of that could hurt your chances of getting approved.

Cash Back Alternatives

We have a list of the top cash back cards for all categories in this post. Here are two alternative cards from that roundup to take a look at:

Blue Cash Preferred® Card from American Express

The Blue Cash Preferred® Card from American Express is one of our top picks for gas and grocery shopping rewards. This card gives you a huge 6% cash back at U.S. supermarkets (up to $6,000 in spending a year) and 3% cash back at U.S. gas stations and at select U.S. department stores. You get 1% cash back on all other purchases. The Blue Cash Preferred® Card from American Express has a $95 annual fee.

Back to our example scenario from above:

If you spend $4,000 annually at U.S. supermarkets and $2,000 annually on gas, you earn $300 in total cash back from the Blue Cash Preferred® Card from American Express. Subtract the $95 annual fee, and you still net $205 in cash back. Remember — the Ally CashBack Credit Card only gives you up to $132 in this same spending scenario. The moral of the story is, rewards cards that have an annual fee can still outperform cards with no annual fee. So don’t let a fee deter you from reviewing an offer.

Alliant Visa Signature

If you do most of your shopping at wholesale stores or you prefer a non-category card, the Alliant Visa Signature card is another option we recommend. The Alliant Visa Signature card gives you an unlimited 3% cash back for the first year with no fee. After the first year, you earn 2.5% cash back on all purchases with a $59 annual fee. If your spending is all over the map, an unlimited cash back card like the Alliant Visa Signature can give you more flexibility than the Ally CashBack Credit Card.

Rewards Cards: Frequently Asked Questions

No, Ally cash back does not expire as long as your account remains open and in good standing. There is no limit to the amount of cash back rewards that may be earned.

Anything over 1.5% cashback is a good deal. There are some cards that offer more — as much as 5 or 6% cash back on purchases. But sometimes those offers are too good to be true. Banks don’t like to lose money, and will pepper the fine print with all sorts of limitations. For example, they may offer 5% cash back on only purchases at certain types of retailers and only for certain periods of time. And those categories may change every quarter, which can make it hard to keep track.

Don’t let those cash back promises pressure you into spending more than you can afford. If you don’t pay your statement balance in full each month, you could get slapped with sky high interest charges. That would totally negate any benefit you might get from earning cash back. Cash back cards are only valuable if you can pay your bill in full and capture the entirety of your cash back rewards.

It depends on the card. Some cards allow you redeem cash back dollar for dollar as a statement credit, which can help lower your total balance. Just keep in mind that applying cash back to your card statement does not count as a monthly payment. Other cards will increase the value of your cash back if you spend on certain categories, like travel. Review your terms carefully to be sure you’re getting the most bang for your buck.

Find the card that fits your day-to-day spending needs best, beyond the flashy sign-up bonus offers and cash back promises. Pay your bill in full each month (spend only what you can afford to pay off).

Taylor Gordon
Taylor Gordon |

Taylor Gordon is a writer at MagnifyMoney. You can email Taylor at taylor@magnifymoney.com

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News

Big Changes at Ally Bank

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

MagnifyNews-02-01

Big management changes at Ally Bank continue, with Barbara Yastine, CEO of the Retail Bank, resigning. Yastine left Ally only a few months after the appointment of Jeff Brown as Chief Executive of the Group. The former CEO, Michael Carpenter, left the firm in February and had long ties with Yastine, dating back to their days at Citigroup. When Ally went public in March 2014, it opened at $27.91. It has not been a smooth ride for shareholders, and the stock closed at $21.03 on Friday, down 25% since the IPO. In its first tumultuous year as a public company, Ally has lost its exclusive leasing contract with General Motors, its CEO and now the head of its Retail Bank.

Ally has demonstrated strong profitability, generating $1.2 billion of profit in 2014 and a Return on Equity of 7.9%. The business had managed to drive down funding costs via a hugely successful online bank, which was led by Yastine. In addition, Ally had worked through the credit losses of the inherited General Motors portfolio and was heading towards double-digit returns. The big question on shareholder and customer minds: where will Ally go next?

The Opposite of The Big Banks

Its name said it all: Ally Bank wanted to be very different from traditional banks. Ally was born during the financial crisis, when General Motors was rescued and the financing business (GMAC) was separated from the auto business. The Treasury invested billions in GMAC, and had majority ownership. In 2010, the business was renamed Ally. The mission of the business reflected the mood at the time: no one trusted banks, particularly auto lending businesses targeting subprime auto financing.

What made Ally unique was that it didn’t just brand itself allies of the consumer, it actually meant it. Its savings accounts had market leading interest rates, paying close to 1%. Not only were the rates high, but there were no minimum deposits, no minimum balances, no fees and an incredibly easy account opening process. In checking accounts, Ally differentiated itself even further. Ally introduced a truly free checking account, with no monthly fee and no sneaky minimum balance or direct deposit requirements. It changed the game with its approach to ATM fees. Ally offers unlimited reimbursement of other bank ATM fees. And it really staked its claim on overdraft fees. If you link your savings account, Ally Bank will transfer funds between the savings and checking account for free, compared to the standard $10 charge levied by traditional banks. And, rather than $35 per incident, up to $140 day of NSF (non-sufficient funds) and overdraft fees, Ally capped its fees to $9 per day. Ally didn’t decide to be marginally better than the rest of the industry. Instead, it completely rewrote the rulebook.

Its checking account received an A+ Transparency Score from MagnifyMoney. An honor only two banks in the country received.

You can almost imagine a team of former bankers (which they were) making a list of the worst sins and fees, and then reversing them. Ally was refreshing, and refreshingly profitable.

To fund the generous consumer accounts, Ally did not build a branch network. It built a truly digital bank, without the overhead of its competitors. And, more importantly, it viewed its deposit accounts as enablers of its lending business, rather than as a profit-center. If you read Ally’s investor presentation, you will the bank described as a “deposit franchise.” The key metric is the cost of deposits, rather than the fee income earned from those accounts. By managing the business in this way, Ally was able to focus on deposit growth and customer satisfaction, rather than extracting an extra nickel from its depositors.

But Ally also had history on its side. The deposit franchise was a cheaper way to fund subprime auto loans than the debt market. So, the faster the deposit franchise grew, the lower the overall group funding costs. This would give positive year-over-year earnings momentum.

Ally has now reached an inflection point. Future asset growth is in question, after the loss of General Motors. With an increasingly competitive online deposit market, Ally risks becoming a victim of its own success, and online deposits may start to look comparatively more expensive.

Back To The Future?

The new CEO spent his formative years at Bank of America. The question, for shareholders and customers, is whether or not he will continue living up to the Ally brand. Ally could use its brand and low-cost funding to transform other parts of the banking sector. Credit cards, personal loans and student loan refinancing are just three asset classes that could welcome Ally’s touch.

However, a quicker and easier way to increase revenue would be to increase the fees on its existing account holders. Ally could also lower the interest rate on savings accounts, as Capital One did to ING customers after the acquisition.

At MagnifyMoney, we are big fans of the Ally retail bank built by Barbara Yastine. We hope that Ally’s next step is to revolutionize other asset classes and product types, rather than reverting to type and increasing fees and reducing rates. Only time will tell.

 

 

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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Fine Print Alert

Fine Print Alert: $500 Bonus Offer from Ally, Free FICO Scores and Overdraft Caution

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

fineprintalert-full

In our weekly Fine Print Alert we call out any good news from the financial community and shine a spotlight on any sneaky changes in the fine print. We also share our favorite reads from the week.

FINE PRINT ALERT

Thinking about rolling over an IRA…?

Ally is offering up to a $500 bonus for making a qualifying rollover or transfer from outside Ally Bank to a new or existing Ally IRA CD or IRA Online Savings Account. The bonus is a tiered structure ranging from $100 – $500 depending on the amount of qualifying deposits, which range from $25,000 to $200,000+.”

Deposits must be made before May 31, 2015 in order to be eligible for this offer.

For more details about how to take advantage of this bonus offer, read our full blog post here.

Get your free FICO (not FAKO) score…

Five more banks and a credit union will be offering customers access to a free FICO score this year. This is indeed different than the ‘FAKO’ score you get on free credit sites. These are the actual scores each bank uses when making credit decisions.

  • Citibank: You’ll get your Equifax version of your FICO score if you hold any Citibank branded card starting later this month. Non branded cards issued by Citibank like Sears and Best Buy cards won’t get the free score.
  • Bank of America: Sometime later this year. Bank of America pulls from all 3 bureaus so it’s not clear which version of the FICO score they will offer.
  • USAA: Starting in March all credit card holders will get the Experian Vantage version of their FICO score.
  • State Employees Credit Union of North Carolina: Sometime later this year all members with credit cards will get their FICO scores. They generally use the Equifax version of the score.
  • Ally: If you have an auto loan with Ally you’ll get your score by this summer. They generally use the Transunion version of the FICO score for decisions.

Read more on our blog post.

A word of caution to TD Bank customers…

Don’t go overdraft! Don’t get even close.

TD Bank loves overdraft fees so much it’s willing to pay fines.

Courthouse News Service reports New York resident John Kashgarian has filed a class action lawsuit against TD Bank claiming egregious overdraft fees.

Specifically, he’s claiming the fees TD and other banks charged since 2010 are unreasonable and manipulative, and reordering of those fees to make accounts that are in otherwise good standing go overdraft is the biggest problem.

TD’s ‘Simple Checking’ account fee schedule says you will be hit with a $35 fee for each item overdrawn, and will let up to 5 items be overdrawn each business day. That’s $175 in fees a day. The bank is also known to participate in transaction re-ordering.

Read more about TD Bank’s history with overdraft fees on our blog.

MAGNIFYMONEY IN THE NEWS

FAVORITE READS FROM AROUND THE WEB

What Your Bank Owes You: Clarity – For example, banks ought to be required to show through third-party random sample testing that when customers trigger overdraft protection, they know what it is and what fee they will be charged. Investment brokerages ought to produce data on what proportion of their retail clients know the fees they will incur on each investment, and brokerages with low numbers penalized. A great look into whether financial literacy is worth our efforts and focus in this LA Times op-ed by Lauren E. Willis and Theresa Amato.

Where are they now? The most inspiring personal finance stories of 2014Five years since the recession officially ended, more and more stories of families overcoming insurmountable financial obstacles have begun to emerge. We’ve taken a look back at 2014 and picked our top five most inspiring personal finance stories of the year. These personal finance heroes have tackled six-figure debt, redefined the idea of retirement and turned their lifestyles upside down. Mandi Woodruff shares these five stories of financial triumph on Yahoo! Finance.

Most Americans feel they are falling behind – Forget getting ahead. Most Americans say their income isn’t even keeping up with the cost of living. Some 55% say they are falling behind, according to a new Pew Research Center study. That’s the case even though most of those polled feel the economy is recovering. Tami Luhby shares the recent data on CNN Money.

My Darkest Financial Secret – I bought my first home in July 2013. I funded the renovation with a 203k loan, but went over and had to raid my savings account to finish the project. Having no savings cushion then led me to lean on my credit cards for “emergencies” in the Fall of 2013 and by NYE 2014, I was 8,432.16 in debt. L Bee shares her story of amassing debt while she was focusing on paying it down on her site, L Bee and The Money Tree.

Erin Lowry
Erin Lowry |

Erin Lowry is a writer at MagnifyMoney. You can email Erin at erin@magnifymoney.com

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Fine Print Alert

Fine Print Alert: You Can Mobile Deposit $50k per day!

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

fineprintalert-full

In our weekly Fine Print Alert we call out any good news from the financial community and shine a spotlight on any sneaky changes in the fine print. We also share our favorite reads from the week. 

FINE PRINT ALERT

Ally Bank increases mobile check deposit limit…

Ally Bank increased their eCheck deposit limit to $50,000 per day or $250,000 every 30 days. So, if grandma sends you an extra big check for your birthday this year, you can deposit it with ease into your savings, checking or money market account.

promo-checking-wide-v2

CFPB cracks down on prepaid debit card space…

Our friends at the CFPB are looking to protect prepaid debit card enthusiasts by proposing ways to protect cardholders against lost or stolen funds while simultaneously making it difficult to borrow money (go overdraft) with a prepaid card.

“We are proposing to give consumers the basic protections, including safety of the funds, they have come to expect when they pull a debit card out of their wallet or shop online with it,” said CFPB Director Richard Cordray.

MAGNIFYMONEY IN THE NEWS

FAVORITE READS FROM AROUND THE WEB

  • Textbook Arbitrage: Making Money Off Used BooksOn the most recent episode of our show, we told you the story of two guys who think they’ve found a guaranteed way to buy low and sell high. Their secret strategy — buying and selling used textbooks. – Planet Money’s David Kestenbaum interview the two men who share their money-making tactics.
  • Shark Tank’s Barbara Corcoran: ‘Failure is what I’m best at’Seven years later, Corcoran and Simon had built a business that included 14 real estate rental agencies in New York City. Then Simon came home and said he was going to marry her secretary. “I thought I would die,” she told the crowd. “And I really thought about giving up.” Instead, she took half the business and seven salespeople with her. As she walked out the door, Simon said to her, “You know you’ll never succeed without me.”CNN Money reporter Jillian Eugenios shares Corcoran’s rise to success.
  • Younger Generation Faces a Savings DeficitAfter a flirtation with thrift after the recession, young Americans have stopped saving. Adults under age 35—the so-called millennial generation—currently have a savings rate of negative 2%, meaning they are burning through their assets or going into debt, according to Moody’s Analytics. That compares with a positive savings rate of about 3% for those ages 35 to 44, 6% for those 45 to 54, and 13% for those 55 and older.Wall Street Journal reporter, and millennial, Josh Zumbrun investigates why millennials aren’t saving.

Want regular updates about the best financial products available? Then sign up for our Price Checker Newsletter. Twice a month, we’ll deliver the best-of-the-best right to your inbox. Don’t forget to follow MagnifyMoney on Twitter @Magnify_Money.

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Erin Lowry
Erin Lowry |

Erin Lowry is a writer at MagnifyMoney. You can email Erin at erin@magnifymoney.com

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