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Updated on Thursday, July 20, 2017
As of June 17, 2019, this credit card offer is no longer available. You can continue to use your card as usual, earning cash back with the same great features and services you enjoy now.
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.
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:
- 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.
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.
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.
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.
This card is best suited for current Ally Bank customers, but even people who bank with Ally Bank 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.
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 on up to $6,000 per year in purchases (then 1%), 6% Cash Back on select U.S. streaming subscriptions, 3% Cash Back at U.S. gas stations and on transit (including taxis/rideshare, parking, tolls, trains, buses and more), 1% Cash Back on other purchases. Terms apply. The Blue Cash Preferred® Card from American Express has a $0 introductory annual fee for the first year, then $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 $0 introductory annual fee for the first year, then $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 an annual fee deter you from reviewing an offer.
To see rates & fees for the Blue Cash Preferred® Card from American Express, please click here.
Alliant Cashback Visa® Signature Card
If you do most of your shopping at wholesale stores or you prefer a non-category card, the Alliant Cashback Visa® Signature Card is another option we recommend. The Alliant Cashback Visa® Signature Card gives you an unlimited 2.5% cash back on all purchases. $99 annual fee, waived the first year. If your spending is all over the map, an unlimited cash back card like the Alliant Cashback Visa® Signature Card can give you more flexibility than the Ally CashBack Credit Card.
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).