About IKEA Visa Credit Card
The IKEA Visa is one of two consumer credit cards IKEA has, offering sign-up bonuses and ongoing rewards for IKEA and other purchases.
The card first launched in May 2018, making it a landmark moment for the famous international retailer. The IKEA Projekt card launched at the same time; its features and benefits focus on purchases of at least $5,000.
Because IKEA offers two different kinds of credit cards, it's important to know which one is the best fit for you. And, since there are other non-store-rewards cards out there that might be able to bring you plenty of lucrative rewards, it’s important to understand if the IKEA Visa is better than those cards.
To help you navigate this card’s basic features, we’ve built this review around what the card offers and how those features and benefits compare to IKEA’s other card, as well as rewards cards that aren’t affiliated with a particular store.
We’ll finish up our review with a quick section about the card’s general strengths and weaknesses.
The Basics of the IKEA Visa: Sign-Up Bonuses, Rewards Rates and Free Delivery
As we mentioned earlier, the IKEA Visa has a couple of features that make it an attractive choice for shoppers: a sign-up bonus and rewards for purchases.
The first sign-up bonus you’ll get is $25 off the first IKEA purchase you make with the card. Basically, you’ll get this discount whenever you purchase something at IKEA’s website or stores.
However, keep in mind there are certain purchases you can’t use your $25 discount for. Those things include:
- TaskRabbit furniture assembly service
- Traemand kitchen installations
- IKEA gift cards
One of the great things about this card is that, if you’re approved via the online application, you can use the card the same day you’re approved.
The second sign-up bonus you get is a $25 IKEA rewards certificate when you make $500 in purchases not related to IKEA in the first 90 days of owning the card. For example, you’d hit that $500 if you paid for a $600 vacation, but you wouldn’t get the bonus if you spent $250 at IKEA and $250 elsewhere.
Just like the $25 discount on your first purchase, this $25 bonus has its restrictions. You can’t use it on Traemand or TaskRabbit services, nor can you apply it to balance transfers or use it to buy an IKEA gift card.
The final main feature of the card is that you get three different rewards rates. Rewards rates are percentages that indicate how much cash rewards you’ll earn on the purchases you make. Here’s the rewards structure for your IKEA Visa:
- 5% on IKEA purchases
- 3% on dining, groceries and utilities
- 1% on everything else
The 5% rewards rate on things you buy from IKEA applies to merchandise as well as Traemand and TaskRabbit services, too.
So, if you spend $500 at IKEA, then you’ll earn $2.50 in rewards. Once you hit $15 in rewards, IKEA will issue you a $15 rewards certificate you can use for future purchases.
It’s hard for us to say exactly how much the average person spends at IKEA because the numbers aren’t available to the public. But, assuming that you spend, say, $300 a year at the store, you’ll earn $15 in rewards, which is good enough for a $15 rewards certificate.
As for the 3% on dining, groceries and utilities, our research shows that the average American household can earn about $276 a year, which equals 18 $15 rewards certificates.
Finally, the 1% rewards you earn can generate, based on our research, about $153 in rewards, or 10 of IKEA’s $15 rewards certificates.
In total, we believe this card’s spending rewards can earn you around 31 of IKEA’s $15 rewards certificates, or $465 in yearly rewards. In our opinion, that’s a pretty substantial rewards amount, as most rewards cards will give you, at best, $400 or less per year (more on that later).
A few of the other benefits you get with this card include free shipping/delivery on in-store purchases. This is a great perk considering that delivery fees start at $29 and can surpass $200 depending on how far away from an IKEA you live.
You’ll also get some of the benefits related to owning a Visa card: zero liability for fraudulent purchases and free rental car collision insurance.
The IKEA Visa’s Rates and Fees
Many store credit cards have one APR and this card is no different. The IKEA Visa has an APR of 21.99%. The cash advance and balance transfer APR is 23.99% and you’ll pay a 5% fee for a cash advance or balance transfer. There is no annual fee.
How the IKEA Visa Compares to Other Cards
One of the crucial things to consider when you’re looking into store cards is how the card in question compares to other cards from the same store as well as general rewards cards not linked to a store. In the following chart, we compare the IKEA Visa to the IKEA Projekt and two other popular rewards cards.
|IKEA Visa||IKEA Projekt||Citi Double Cash||Chase Freedom|
|APR||21.99%||21.99%||14.99% - 24.99%||16.49% - 24.29%|
When you compare the IKEA Visa to the IKEA Projekt card, the differences are very distinct because the cards are meant for two different customers. The Projekt card is designed for consumers who are going to spend at least $5,000 on a project in their home or workplace and want a low interest rate on that purchase: 4.99% for five years, in this case.
The IKEA Visa, on the other hand, is all about rewards on occasional IKEA purchases and on everyday purchases outside of IKEA, which is why there are multiple rewards rates and sign-up bonuses.
Now, when you compare the IKEA Visa to traditional rewards cards, you’ll find that the sign-up bonus of $50 doesn’t match the $100 you get with the Citi Double Cash or the $150 with the Chase Freedom Unlimited.
However, it does present great value when you calculate yearly rewards, something that’s rare among store credit cards. The key to this card’s rewards value is that you get triple rewards on categories that you’ll probably spend at least $9,000 on every year: groceries, eating out and utilities.
The main weakness when you compare this card’s APR to the Double Cash and Freedom Unlimited APR, you realize that it’s 5% higher than the lowest Freedom Unlimited APR and a7% higher than the Double Cash’s best APR.
If you’ve got excellent credit and you tend to carry a balance, the Citi Double Cash may be a better choice.
Now, keep in mind that the Double Cash has a penalty APR of up to 29.99% that will kick in if you make a late payment.
The Final Word: Pros and Cons of the IKEA Visa
Based on our research of this card and the comparisons we did with other cards, we believe its strength is the yearly rewards you can earn via the bonuses for IKEA purchases, dining/groceries/utilities and all other purchases.
Our estimation of $476 in yearly rewards is based on $500 in spending at IKEA per year. If you spend more than that each year, then your rewards balance will go up. If you, let’s say, spend $1,000 a year at IKEA, your yearly rewards total goes up $25, its yearly value moves beyond the Citi Double Cash’s $500 per year.
In addition, we think the free shipping and delivery is a great perk, especially if you’re buying furniture for a room, rooms or an entire house and you live in an area that requires a delivery fee of more than the lowest rate of $29.
The downsides of the card are that you don’t get a big sign-up bonus and the APR is pretty high when compared to the popular rewards cards that aren’t associated with a store. Now, when it comes to store cards, the APR isn’t that bad because several store credit cards we’ve reviewed have a single APR of more than 20%.
We believe this card is best suited for someone who spends around $500 or more at IKEA each year. Part of the reason we think this is true is that your yearly rewards will convert into enough IKEA rewards certificates to pay for all but $25 of your yearly purchases.
Second, the 3x rate on groceries, eating out and utilities is among the best for all credit cards, not just store credit cards. If you spend more than the national average on those amounts each year – around $9,200, by our estimation – then the card’s value only goes up.
» For Further Reading: Best Cash Back Credit Cards of 2018