About Ally CashBack Credit Card
The Ally CashBack Credit Card is the flagship cash-rewards card offered by Ally Bank, one of the leading online banks in the country.
While Ally may not have the brick-and-mortar branches to compete with big banks like Chase and Bank of America, its CashBack card has the potential to give credit cards from any bank a run for their money.
Exactly why that is will be something that you’ll learn throughout this review. But we aren’t just going to focus on rewards; that’s short-sighted. We’re also going to analyze this credit card’s benefits and its rates and fees, things that every consumer should know before signing up for a credit card.
In the end, our goal is to help you know if this credit card is right for your particular situation. To achieve that, we’ve spent time reading through Ally’s website – fine print included – to unearth the facts that we think are most valuable to consumers just like you.
Yes, the rewards you’ll get are great. But are there certain exclusions you need to be aware of? Are there any benefits to being an Ally Bank customer while owning this card? These are the kinds of important questions we’ll answer in the next few minutes.
When it comes to the categories of spending that you can put on your credit card, the Bureau of Labor Statistics says that groceries demand the highest spend.
In other words, the average American household spends more on groceries than they do in every other category of spending that you could put on your credit card.
And here’s the good news: Ally’s CashBack card will give you 2% cash back on all your grocery purchases. That 2% extends to gas station purchases, too, making this card seem like a good fit for families who spend a lot in these categories.
But how much, exactly, are you spending on gas and groceries, Well, according to the BLS’ numbers, the average family is spending about $4,000 on groceries and $2,000 on gas. The grand total each year is $6,000, which equals $120 in cash rewards at a 2% rate.
For contrast’s sake, the Discover it Chrome gives 2% back on gas and restaurants and we estimate those yearly rewards to be about $100.
Assuming that you spend another $19,000 a year on things other than gas and groceries, you’ll earn another $190 from your 1%, bringing your total yearly rewards to about $310.
Now, there are a few things you need to keep in mind about this 2% rewards rate. First, you can pretty much eliminate any purchases you make at warehouse clubs, whether it’s gas or groceries. Those stores use a different merchant ID number than traditional grocery stores and gas stations, which is why your purchases there won’t get rewards.
Second, any grocery purchases you make that you return won’t accrue rewards. Technically, you’ll get those rewards but they’ll be returned after you return the items you bought.
The next reward you get with this card is a $100 bonus if you can spend at least $500 in the first three months of owning this card. Based on our research, hitting the $500 should be super easy since most families and individuals can put at least $500 a month on their card.
It’s important to note, though, that balance transfers and any interest payments you make won’t count toward that $500 requirement.
Also, the clock starts ticking on that three-month deadline the day you’re approved for the card and not the day you get it in the mail. So, if there’s a delay in getting your card, remember that you’ll have less time to hit the spending requirement.
According to the fine print, it will take about six to eight weeks for the $100 to show up in your account once you spend $500.
Your Ally online account will be where you go to check up on your cash rewards balance. If you want to redeem your rewards, you have to do so in increments of $25. The rewards will then be applied to your credit card balance.
Basically, you can divide this card’s benefits into two groups: the bonus for depositing to an Ally account and the Visa Signature program.
10% Bonus on Rewards Deposits
As we mentioned earlier, one of the questions you should ask is whether or not you get a bonus for depositing your rewards into an Ally account. Many banks do this – Bank of America is a good example.
Ally will give you a 10% bonus on your rewards if you choose to put them in any of the following Ally accounts:
- Interest checking
- Non-IRA savings
- Money market
It’s worth noting that these accounts don’t have any fees so you won’t be losing any money by opening them just to get the bonus. Also, you’ll earn a small bit of interest by depositing to each of these accounts.
Using the numbers we talked about in the rewards section, we think that you could earn an extra $31 a year using the 10% bonus. With all rewards and bonuses taken into account, you’re looking at around $340 in cash rewards.
That puts this card on par with the rewards you’d get from cards like the Capital One Quicksilver and Chase Freedom Unlimited, which have flat rates of 1.5% that can earn the average family around $375 in rewards each year.
Visa Signature Benefits
This Ally cash rewards card is part of the Visa Signature program, a great suite of benefits that provide everything from reimbursements on travel or items that went down in price within 90 days of buying them to complimentary car rental insurance and extended warranties.
All the details you need to know about the Visa Signature program will be included with your card when Ally sends it to you.
Remember, though, that these benefits are only available for items you purchase with your Ally card.
Rates and Fees
Whenever we review cash back cards, we try to find the various ways that the credit card issuer – in this case, a bank – tries to get money from you.
One of the notorious methods they use is penalty APR – an interest rate around 30% that kicks in when you make one late payment or have a payment returned.
Even though there’s no penalty APR, there’s an ongoing APR of 13.99%, 18.99% or 23.99% that will kick in if you don’t pay your balance in full every month. The better your credit scores, the better the interest rate you’ll get.
As far as APR’s on cash rewards cards go, Ally’s is pretty good. It’s not as low as the Discover it’s 11.99% but it’s better than the American Express Blue Cash Preferred’s 14.24% and the Chase Freedom Unlimited’s 15.99%.
Here’s a list of the other rates and fees associated with this card:
- Balance transfer fee: 3%
- Cash advance fee: 5%
- Cash advance APR: 24.24%
- Foreign transaction fee: 3%
- Late/returned payment fee: Up to $35
Public Opinion About the Ally CashBack Card
Many of the experts say that this card is a solid choice for earning cash back, mainly because there’s no cap on the rewards you can earn and because you get a 10% bonus when you deposit the rewards into an Ally account.
As far as consumers go, much of what we read from Ally customers was more about the bank than the credit card. The reviews were mixed, with one customer complaining that Ally allowed fraudulent charges to continue even though they called to notify Ally.
It’s hard to get a read on the Ally customer experience, so the usual rules of good banking apply here: Keep an eye on your recent transactions to make sure no unlawful transactions have taken place.
Unlike checking accounts, you aren’t liable for fraudulent charges made to your Ally credit card.
Pros, Cons and Who It’s Good For
The strengths of this credit card lie in its rewards. While the $100 bonus isn’t as much as competing cards that offer $150 (Freedom Unlimited, Quicksilver, B of A Cash Rewards) the 10% bonus you get for depositing your cash back into an Ally account is a nice perk.
Also, we like how the card doesn’t have a penalty APR and the lowest regular APR is better than several competing cards.
If this card has a weakness, it’s that you’re required to open a new bank account in order to take advantage of the 10% bonus. You may not feel comfortable opening a new financial account just to earn, by our estimation, an extra $31 a year.
We believe the person who is best suited for this card is an Ally Bank customer who spends more than the average amount on gas and groceries each month.
If you’re undecided about this card, that’s okay. It’s better to ask questions first and make a decision later. It might help you to read through our guide to the best cash back cards so you can get a side-by-side comparison of some of the cards we mentioned here.