USAA American Express Rewards Credit Card Review

USAA provides many financial products to service members, their families, and those affiliated with the military – and credit cards are among the most popular of them.

The USAA American Express Rewards Card features a low-interest opportunity and a rewards program for earning significant points on gasoline and grocery purchases. If you qualify, you may want to give serious thought this card. But first, learn more about its features and decide whether it’s right for you.

Key Features of the USAA American Express Rewards Credit Card

Here’s what you should know about the USAA American Express Rewards Credit Card. Note the easy-to-attain sign-up bonus, no annual fee, and generous rewards program.

Sign-up Bonus

0% APR Introductory Offer

For the first 15 months after you open your account, enjoy 0% APR on eligible balance transfers and convenience checks. The 3% balance transfer fee (maximum $200) still applies.

After the intro period ends, variable regular APR applies.

Ongoing APR

The variable APR for purchases and balance transfers ranges from 15.15% to 31.15%, based on your creditworthiness and prevailing interest rates.

Rewards Program

With this card, you earn:

• 3 points per dollar spent on eligible dining purchases
• 2 points per dollar spent on gas and grocery purchases
• 1 point for each dollar spent everywhere else

There is no cap on the number of points you can earn and they do not expire. Points can be redeemed for cash, merchandise, gift cards, or airline travel booked online at USAA.com or by phone. If you redeem your points for airfare, each point is worth one cent, and slightly more if you redeem for cruises through Explore Cruise Travel.

The value of each point is less if redeemed for cash, merchandise, or gift cards. For example, you can redeem 3,500 points for a $25 gift card or gift certificate with popular retailers such as Macy’s, Marriott, or Staples, or you can redeem 3,000 points for a $25 statement credit.

If you redeem a larger number of points for cash, the value of each point increases. As an example, 20,000 points can be redeemed for a $200 statement credit. You can also donate your points to organizations such as Habitat for Humanity – 6,000 points equals a $50 donation.

Eligibility for USAA Membership

In order to qualify for the USAA Rewards American Express, you must be a USAA member. This requires you to be an active-duty service member, a retired and honorably separated officer, or an enlisted personnel of the U.S. military.

You may also qualify if you are an officer candidate in a commissioning program such as Academy, ROTC, or OCS/OTS, or if you are an adult child of a USAA member, spouse, or a widow or widower of a service member. Check USAA’s website for details.

Military Benefits

The Servicemembers Civil Relief Act (SCRA) provides a reduced interest rate of 6% on credit obligations incurred before beginning active duty (this applies to reservists and national guards, as well). USAA offers a lower interest rate of 4% on preexisting USAA credit card and loan debt.

Other military benefits of this card include a reduced rate of 4% on USAA credit cards for active-duty members who are deployed or deploying, or those who undergo a permanent change of station.

Important Fees

There is no annual fee for this card. Balance transfers are 3% with a maximum fee of $200. The foreign transaction fee is 1%.

Credit Required

This card requires good credit. You might not qualify if you’ve had significant credit issues in the recent past.

Advantages of the USAA American Express Rewards Credit Card

These are the top advantages of the USAA American Express Rewards Credit Card.

• Low interest rate. Cards which feature rewards programs, especially on everyday purchases, rarely offer the opportunity to qualify for a low interest rate. If you carry a balance on your USAA Rewards card and make your minimum payment each month, the interest rate could be almost half that of other rewards cards.
• Long 0% intro APR offer. This card has a long 0% intro APR offer on balance transfers and convenience checks. It can last as long as 15 months from account opening. Unfortunately, it doesn’t apply to purchases.
• No cap or expiration for points. There is no cap on the number of points you can earn with the USAA Rewards card, even in the bonus categories of gasoline and groceries – and they do not expire. Often, rewards programs impose a maximum number of points that can be earned in bonus categories, and once that cap is reached, all additional purchases in those categories default to the “other” rate of 1 point per dollar spent.
• No rotating categories. Many other rewards programs require cardholders to enroll in rotating categories in each quarter to earn their bonus rewards. If you don’t remember to sign up or you don’t purchase anything in those categories, you earn only 1 point per dollar spent. With the USAA Rewards American Express card, all gas and grocery purchases earn 2 points per dollar spent, and all dining purchases earn 3 points per dollar spent – all the time.
• Military benefits. USAA provides its members with additional benefits including a 4% APR for active duty members – lower than the SCRA requires – as well as the opportunity to have all interest incurred during a campaign in which you earn a qualifying campaign medal rebated to your USAA card.

Disadvantages of the USAA American Express Rewards Credit Card

Before you apply for the USAA American Express Rewards Credit Card, consider these drawbacks.

• Low sign-up bonus. The sign-up bonus of 2,500 points is the lowest offered by rewards cards and is worth, at most, $25 if you redeem for travel. You need 2,500 more points if you want to redeem for gift cards. Although there is no annual fee, there are other cards that award gas and grocery purchases and offer better sign-up bonuses, also without an annual fee.
• Low point value. Unless you redeem your points for airline travel, cruises, or cash (which requires 20,000), your points are worth less than one cent each. Other cards, such as Chase Freedom Flex, allow redemption in the form of a statement credit, check, or direct deposit, and rewards are worth at least one cent per point.
• Foreign transaction fee. Although the foreign transaction fee is only 1%, if you make purchases outside of the U.S., this fee could cancel out any rewards you earn. Credit cards without foreign transaction fees may be better suited if you plan on making many purchases abroad.

Final Word

The USAA American Express Rewards Card provides excellent low-interest and rebate opportunities for service members. However, many other cash back cards award everyday purchases like gasoline and groceries while offering better rewards and bigger sign-up bonuses. Choose your match carefully.