The rumors were true. Uber’s making the leap from the smartphone in your pocket to the wallet in, well, your other pocket.
The ride-hailing company has teamed up with Barclays, the credit card division of UK-based Barclays PLC, to launch what is shaping up to be an excellent no-fee rewards credit card for millennials, urbanites and business travelers alike. The new offering, dubbed the Uber Visa Card, will be available nationwide Nov. 2.
Uber’s first branded credit card lets cardholders earn 4% back on dining, 3% on hotels and airfare, 2% on online purchases including Uber, online shopping and video and music streaming services, and 1% on most everything else. Individually, the bonus categories are similar to those of a few existing no-fee cards with special category bonuses. But the Uber Visa Card’s 4-3-2-1 cashback rewards structure makes for a leading bonus category rewards credit card.
And that 4% cashback bonus makes the Uber Visa Card a leader in dining rewards.
Heavy Uber-app users need look no further for a cashback offering. However, to get the best bang for their buck, they should pair the Uber Visa Card with a flat-rate 2% cashback card such as the Citi® Double Cash Card – 18 month BT offer (Earn 1% cash back when you buy and 1% cash back as you pay for those purchases) or PayPal Cashback Mastercard®.
Part I: Card benefits at a glance
The Uber Visa Card boasts an impressive 4-3-2-1 rewards program, as described above, in addition to other bonuses. But those aren’t the only perks this car packs. The company is clearly making a play for millennials, with unique benefits like account credits for digital subscription services (a la Netflix or Hulu) and mobile phone protection.
With its rewards package, the Uber Visa Card might could act as bait to convince some millennials to use credit more often. (Recent research shows the generation favors debit and cash for everyday purchases.)
High rewards for no fee
The Uber Visa Card grants consumers comparatively lucrative ongoing-bonus-category rewards for no annual fee, and the card charges no foreign transaction fees. That’s rare, even in a market where banks are spending more and more on credit rewards to attract consumers.
The card that comes closest to offering a similar level of bonus rewards is the Chase Sapphire Reserve®. It earns users an annual $300 travel credit, unlimited triple points on dining and travel, and 1% back on all other purchases. But it charges a hefty $450 annual fee.
If you don’t have an extra $450 in your budget but still want to earn big on dining and travel, the no-fee Uber Visa Card may be the better choice.
Chase Sapphire Reserve® altered one cardholder perk in January – the lucrative 100,000-point-bonus signup offer. After less than a year on the market, Chase cut back a 100,000-point Ultimate Rewards bonus after spending $4,000 within three months to just Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening.
An Uber spokesperson tells MagnifyMoney that the Uber Visa Card’s rewards are not temporary, and there are no plans afoot to change them.
It’s important to note the Chase Sapphire Reserve® does offer other traveler perks like up to $300 in statement credits for travel reimbursements per year, a $100 statement credit for applying for Global Entry or TSA PreCheck, and several travel protection benefits. If you use those perks, it may be worth it to you to pay the beefy annual fee for the Chase Sapphire Reserve®.
4% cash back on dining
The Uber Visa Card awards a whopping 4% unlimited cash back on dining, which includes restaurants, cafes, bars and even takeout like UberEATS. The category’s cashback rate leads the industry, beating the Chase AARP Visa and Costco Anywhere Visa® Card by Citi, which award only 3% cash back on dining.
The Uber Visa Card also beats the Chase Sapphire Reserve®‘s 3x points on dining, since 4% cash back is equivalent to earning 4 points.
As mentioned, the Uber Visa Card awards 4% on takeout, too, and millennial cardholders may enjoy this perk the most. According to a recent Bankrate report, the average millennial dines out or orders in five times a week. The average member of the avocado toast generation spends about $233 on both dine in and take out meals, compared to just $182 a month for older generations. If a cardholder spends a weekly $233 on dining, he or she will earn about $9.32 a week, or $484.64 in cash back annually.
3% cash back on hotel and airfare
Cardholders earn 3% cash back on hotel and airfare purchases made using the Uber Visa Card. Another bonus for millennials: Cash back applies to vacation home rental services, like Airbnb.
According to travel website Hipmunk, nearly three-fourths of millennial travelers have used a vacation rental service like Airbnb while traveling for work, compared to only 38% of Gen-Y and 20% of Boomers. And, about 81% of millennial travelers said they would add extra time to business trip to make some room for leisure.
While the Uber Visa Card’s 3% offer on airfare and hotels is a good offer for the average frequent flyer, consumers can find the same deal with some other no-fee cards, like the AAA Member Rewards Visa, Chase Sapphire Reserve® and Costco Anywhere Visa® Card by Citi.
Beware: Although it offers the same amount of cash back on travel, the Chase Sapphire Reserve® technically beats out the Uber Visa Card when cardholders use their points for travel rewards.
With Uber, 1 point = $0.01, but if users redeem points using the Chase Ultimate Rewards® portal 1 point = $.015, so your points go about 50% further with Chase, allowing cardholders to purchase more with the same point value. Put another way: A 50,000-point bonus is really worth $750, instead of $500.
Up to $50 streaming credit bonus
Here’s a perk you won’t find on many rewards cards these days.
If a cardholder spends $5,000 or more in a cardmembership year — the 12 consecutive months following your account’s anniversary date — he or she stands to earn up to $50 for digital streaming purchases. Cardholders can earn the subscription credit each year.
The $50 credit is automatically applied as a statement credit for eligible digital subscription services once the cardholder meets the $5,000 spending threshold. If the cardholder hasn’t made $50 worth of eligible purchases by the time he/she spends $5,000, the result is a statement credit for any new eligible digital subscription services charged to the card up to $50.
Cardholders can track their progress toward the annual spending threshold on BarclaycardUS.com.
Up to $600 worth of mobile phone insurance coverage
When cardholders use their Uber Visa Card to pay for their monthly wireless bill, they receive up to $600 for mobile phone damage or theft for each phone listed on the wireless account. Coverage begins one month after the first bill was charged to the Uber Visa Card.
Depending on the kind of coverage a cardholder currently has through a carrier, those who take advantage of this perk could save a good chunk of money. Those under one of the four major carriers could see savings of $7 to $15 a month for a single device or up to $35 a month to cover up to three devices on one account.
There is a $25 deductible to use the protection. After that is paid, the protection covers up to $600 per claim on up to two claims in a 12-month period. If the phone has to be replaced, the protection awards the suggested retail value of the replacement phone, up to the $600 maximum per claim.
2% cash back on online purchases
The Uber Visa Card pays cardholders 2% cash back on online shopping, purchases made through Uber, video and music streaming services and online services like Instacart and TaskRabbit.
The cool thing about this perk is that cardholders can earn cash back on subscription services like Netflix, Amazon Prime and Spotify. Millennials, the leaders of the cord-cutting movement, will likely benefit by simply “setting and forgetting” their Uber Visa Card to pay for their favorite streaming services.
Update: Barclays sent cardholders an email Dec. 5 saying “using a third party payment method including PayPal, Venmo, Apple Pay, Samsung Pay, and Android Pay will now earn 2% back.” Take note: Using a credit card to make a person-to-person (P2P) transfer often carries a fee of about 3% of the transaction. Be sure to review the cards terms & conditions for details.
The 2% cash back on online purchases is good, but the bonus category offer isn’t a leading rate. Consumers who don’t do all their shopping online could benefit more from cashback options that earn double points on all purchases, not just those made online, like the Citi® Double Cash Card – 18 month BT offer, Fidelity® Rewards Visa Signature® Card, or PayPal Cashback Mastercard®.
1% cashback on all other purchases
The Uber Visa Card still rewards spending if you don’t purchase in one of the bonus categories,. The card rewards cardholders 1% back on all other purchases, so it’s a good go-to card for everyday purchases, in addition to bonus-category buys. The 1% offer isn’t very competitive, as there are many existing cards that offer 2% on all purchases, but it ensures cardholders earn at least a little something on everything they buy with the Uber Visa Card.
Part II: Applying for the Uber Visa Card
The Uber Visa Card opens for applications Nov. 2. Interested applicants can apply for the unsecured rewards card online or directly through the Uber phone app and see an approval within minutes. The in-app application may be more of a win for Uber than for millennials, but it makes the application process easy for anyone who already has the Uber app, so may appeal to digital natives, too.
Once the application is approved, the card is made available for use immediately on rides and UberEATS purchases made through the Uber application on the cardholder’s mobile device. Cardholders should receive a physical card in the mail within 1 – 2 weeks of approval.
What it takes to qualify
Borrowers with higher credit scores are more likely to qualify for the lower interest rates, while those with lower scores are likely to qualify for the higher APR. At this time, there is not a way for applicants to check to see if they prequalify.
This card is best for …
The Uber Visa Card is best for the regular Uber customer who dines out often, frequently travels for work, handles most shopping and bill paying online, and pays his/her balance in full each month. The unsecured rewards credit card’s features will likely hold the most appeal for traveling business people and city-dwelling millennials.
Consumers who spend heavily on dining, travel and online purchases would have the best shot at maximizing the Uber Visa Card’s rewards offers. However, the benefit is canceled out if a user carries a balance, thanks to a high interest charge on purchases.
Uber loyalists will benefit most from Uber app-centric perks like the ability to manage and redeem point using the app, and redeem rewards for Uber Credits for Uber rides and UberEATS.
Again, millennials may reap the greatest reward here as they more likely to use ride-hailing services like Uber on a regular basis. According to Pew Research, 7% of all 18- to 29-year-olds use ride-hailing on a daily or weekly basis; that figure rises to 10% among 18- to 29-year-olds living in urban areas.
Depending on how much an Uber app user spends and how often Uber gets used.
Those who aren’t frequent users of Uber’s app may benefit from earning cash back on spending in the card’s bonus categories, but may not realize as much value in the various app-centric perks.
Part III: Redeeming rewards
Cardholders can redeem cash back via Uber credits, gift cards, statement credit or direct deposit. Cardholders can start redeeming cash back for Uber credits once their cashback balance reaches $5, or 500 points.
As long as the account is active and in good standing, points never expire. The cashback balance must reach $25 before users can access it for gift cards, statement credit or direct deposit.
Cardholders are able to redeem rewards through the Uber app, online through the cardholder portal at BarclaycardUS.com, or by calling the customer service number on the back of the card. Cashback redemption is capped daily at $500.
If there are any authorized users on the card, they can earn and redeem points for gift cards and cash back, but not for Uber credits. Each cashback point is equivalent to $0.01 (2,500 points = $25).
How to redeem rewards for Uber credits in the Uber app
Uber lets cardholders directly manage the rewards points they’ve accumulated for Uber credits, gift cards or cash back through the Uber phone application. Users must first add the Uber Visa Card as a payment method.
Once the card is added, the user will tap on the Barclays mobile app menu to see a points balance. After tapping the points balance, the user should be prompted to select the amount to be redeemed.
Uber says the redemption should happen within seconds, but may take up to 24 hours to be applied to the account. The process is demonstrated in the GIF below.
Part IV: Pros and cons
What we like about the Uber Visa Card
No annual fee
The Uber Visa Card charges no annual fee, which is unusual for a card this loaded with rewards and bonuses. Cardholders can make the most of this no-fee rewards card if they charge only items that fall into the bonus rewards categories and pay the balance in full each month.
4-3-2-1 rewards perks
The Uber Visa Card awards holders a high return on most purchases. In addition, rewards are unlimited and never expire. The card’s 4-3-2-1 cashback rewards program is appealing.
No foreign transaction fee
Cardholders can swipe to pay for items and services overseas without incurring foreign transaction fees. The lack of this fee combines with the 3% travel rewards bonus category to make the Uber Visa Card a good travel companion. Purchases made overseas also earn cashback rewards.
Apply directly in the Uber app
Uber’s 40 million active riders won’t need to rush to a computer to apply for the Uber Visa Card once the application opens Nov. 2. They can simply apply through Uber’s phone application. Uber claims users will be able to submit an application and see a decision within minutes on the app. Users can also apply for the Uber Visa Card online.
Approved applications are granted access to the funds immediately. Users can add the card as a payment option in the Uber mobile application for immediate use on rides and UberEATS orders.
Immediate access comes in handy if an applicant is in need of the funds ASAP. But it’s unclear if cardholders will be able to use the card immediately on purchases outside the Uber app, too.
Exclusive access to events and offers
Uber Visa Card users will get exclusive invites to events and offers in select U.S. cities. Uber app users may already be familiar with this perk if they have checked out Uber’s Visa Locals Offers. Cardholders earn Uber credit when they visit participating stores and restaurants if they pay with a Visa card (like the Uber Visa Card). Uber’s banded credit card is a Visa, so cardholders can earn rewards — like 10% Uber rewards if you shop at Whole Foods — plus the regular purchase rewards if they use the Uber Visa Card at checkout.
What to watch out for with the Uber Visa Card
$500 daily redemption limit
Cardholders can only redeem up to $500 worth of points per day on Uber Credits and cash back for a bank deposit. This may prove problematic if one wants to use points to redeem more than $500 in cash back rewards via bank deposit. There is no daily limit for cash back as a statement credit or for gift cards.
2% cash back on online purchases
2% cashback on online purchases is good, but the bonus categories offer isn’t a leading rate in itself.
1% cashback on all other purchases
For all other purchases, 1% isn’t a very competitive offer.
No interest-free balance transfer period
The Uber Visa Card is not a good option for anyone looking to consolidate credit card debt using a balance transfer. Unlike with the Citi® Double Cash Card – 18 month BT offer, Uber Visa Card cardholders don’t pay 0% interest on balance transfers for a period. The card charges the greater of $10 or 3% of the transfer amount to transfer a balance, followed by the regular 16.24% – 24.99% variable APR the cardholder is charged on all other purchases.
Part V: Alternatives to the Uber Visa Card
Consumers who don’t use Uber, don’t dine out often, don’t travel much or don’t make most of their purchases online may not find the Uber Visa Card’s cashback offer very appealing. While they can still earn a flat 1% cash back on all purchases they won’t be able to benefit much from the card’s bonus categories. Using a flat-rate cashback card with a higher reward, or one that offers a high cashback bonus in a category they use more often, may be beneficial to those consumers.
Flat-rate cashback alternatives
A flat-rate cashback card like the leading Citi® Double Cash Card – 18 month BT offer and Paypal Cashback Mastercard® is a great option for anyone who wants to earn a reward on all purchases without thinking about bonus categories.
The Citi® Double Cash Card – 18 month BT offer is the second-highest no-fee flat-rate cashback credit card on the market. The card awards a first 1% cash back when you buy and 1% cash back as you pay for those purchases, totalling 2% cashback. It also offers an introductory 0%* for 18 months on Balance Transfers* so it’s a good choice for those seeking to consolidate debt. Borrowers with Excellent, Good credit scores may be approved for the Citi® Double Cash Card – 18 month BT offer.
Cardholders with a PayPal Cashback Mastercard® can earn an unlimited, flat 2% cashback on all eligible purchases made using the PayPal Cashback Mastercard® for no annual fee. The card charges slightly higher variable interest rates than the Uber Visa Card — 17.49% to 28.49% — based on creditworthiness. Borrowers with fair, good or excellent credit scores may qualify for the PayPal Cashback Mastercard®
Similar to the Uber Visa Card, those approved for the PayPal Cashback Mastercard® can use the card immediately to pay for purchases through PayPal’s online and mobile applications. Cash back can be redeemed to the cardholder’s PayPal balance. From there it can be sent to the user’s bank account or used to send money to peers or make purchases via PayPal.
The Fidelity® Rewards Visa Signature® card earns cardholders 2% cash back on all purchases with no annual fee. The card is best for existing Fidelity customers, since the cashback earned has to be deposited into a Fidelity account.
Only borrowers with excellent credit should apply for this card. Fidelity also bases its credit limits on the total amount of assets it is managing on a consumer’s behalf, so those approved may still be disappointed in the limit they receive if they don’t have much money with Fidelity already.
Bonus category cashback alternative
The bonus categories the Uber Visa Card offers may not appeal to everyone hoping to earn cash back on the purchases they make most, therefore bonus category cashback cards can be a good alternative.
Best for supermarkets and fuel:
3% cash back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%). 2% cash back at U.S. gas stations and at select U.S. department stores. 1% cash back on other purchases.
Regular Purchase APR
The Blue Cash Everyday® Card from American Express is a good alternative for consumers who spend more money on grocery than dining and more running around IRL on gas than making online purchases. The card offers cardholders 3% cash back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%). 2% cash back at U.S. gas stations and at select U.S. department stores. 1% cash back on other purchases.
The card has a $0 annual fee. The card also awards new cardholders a $150 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months.