The USAA World MasterCard offers similar benefits to the USAA Rewards American Express Card. The differences, other than one being a MasterCard (making it more widely accepted than the American Express), lie in the rewards program. Rather than rewarding gasoline and grocery purchases, the USAA World MasterCard rewards all purchases with a flat rate for cash back, which could be beneficial to service members who don’t have use for rewards in certain categories. You need to be a servicemember or family member of a qualifying servicemember to qualify for a USAA credit card.
- Sign-up Bonus. Your first purchase made with the card earns a bonus of 2,500 points, the equivalent of $25 when redeemed for airfare.
- Fees. There is no annual fee for the USAA World MasterCard. The balance transfer fee is 3% of the transfer, with a maximum fee of $200, and the foreign transaction fee is 1%.
- APR. The APR for purchases and balance transfers with the USAA World MasterCard is based on your credit, ranging from 9.90% to 25.90%. The APR varies with the prime rate.
- Rewards Program. Cardholders earn 1 point per dollar spent on all purchases made with the credit card. Unlimited points can be earned, and they never expire. Points may be redeemed for cash as statement credits, or for gift cards. Redemption starts at 3,500 points for a $25 statement credit or a gift card from a popular retailer, such as Macy’s or Staples. Points can also be redeemed for charitable donations through organizations such as Habitat for Humanity. 6,000 points amounts to a $50 donation. Cardholders receive the most value for their points when redeemed for airfare or cruises, where points are worth at least one cent per point, or for statement credits at higher amounts, such as 20,000 points for a $200 statement credit.
- Military Benefits. While the Servicemembers Civil Relief Act (SCRA) provides a reduced interest rate of 6% on debt incurred before beginning active duty for active-duty servicemembers, USAA offers a lower interest rate of just 4% on preexisting USAA credit card and loan debt. USAA also provides a reduced rate of 4% and waives some fees on USAA credit cards for active-duty members who are deployed or deploying. Servicemembers who receive a qualifying campaign medal, such as the Global War on Terrorism Expeditionary Medal, Iraq Campaign Medal, or the Afghanistan Campaign Medal, can also get any interest incurred during the campaign rebated on the USAA credit card.
- Eligibility for USAA Membership. Only USAA members qualify for the USAA credit cards. Those who qualify for membership include active, retired, and honorably separate officers, enlisted personnel of the U.S. military, officer candidates in commissioning programs, such as Academy, ROTC, or OCS/OTS, adult children of eligible parents who have or had USAA auto or property insurance, or widows or widowers of USAA members who have or had USAA auto or property insurance.
- Low Interest. The USAA rewards cards offer one of the lowest APRs on cards that reward purchases. To fully maximize the earning potential of rewards, pay the balance in full each month.
- No Cap or Expiration on Points. Many credit cards offer bonus points in certain categories, up to a certain amount each quarter. For example, Chase Freedom offers 5% cash back in rotating categories, up to $1,500 in purchases. There are no caps on the number of points you can earn with the USAA World MasterCard, and rewards do not expire.
- Flat Rate on All Purchases. There are no categories to enroll in, which means you don’t need to plan your card purchases. This is convenient if your purchases vary from month to month and if you prefer a flat-rate rewards program.
- Military Benefits. If you’re a servicemember, related to a servicemember, or affiliated with the military, you could qualify for the additional military benefits that USAA offers, including the lower APR of 4% for active-duty members.
- Low Sign-up Bonus. The sign-up bonus is worth, at most, $25 if you redeem it for airfare, which is one of the lowest sign-up bonuses offered by rewards credit cards. The Capital One Quicksilver Cash Card is a no-annual-fee card that awards a flat rate of 1.5% on all purchases, but also includes a sign-up bonus worth $100.
- No Introductory APR. If you’re planning a large purchase or transferring a balance from a higher APR card, the USAA World MasterCard does not provide an introductory APR for saving on interest. Many rewards cards offer 0% on purchases and balance transfers for a limited time. For example, the Capital One Quicksilver Cash Card offers 0% on purchases and balance transfers for 15 months, which is one of the longest 0% offers currently on the market.
- Low Point Value. Points redeemed for airfare or cruises offer the most value, at one cent per point. Otherwise, unless you redeem a large amount, such as 20,000 points for a $200 statement credit, points are worth less than one cent each, an amount lower than competing credit cards.
- One Point on All Purchases. There is convenience in a flat-rate rewards program, but there are other cards that offer higher flat rates than 1 point per dollar spent. Capital One Quicksilver Cash, for example, awards 1.5% cash back on all purchases, and Fidelity Investment Rewards awards 2% cash back on all purchases.
- Foreign Transaction Fee. If you travel abroad frequently, even a 1% foreign transaction fee can minimize the rewards earned on purchases made with the card. The Capital One Quicksilver Cash and Discover it cards do not charge fees on foreign purchases.
When comparing the USAA American Express and MasterCard, the USAA Rewards American Express is a better option simply because you earn double points on gasoline and grocery purchases. Even if you don’t use your card for gas or groceries often, when you do, you end up earning more than you would with the USAA World MasterCard, which is almost identical otherwise. If you’re affiliated with the military, don’t travel abroad frequently, and prefer the simplicity of a flat-rate rewards program, you may benefit from the USAA World MasterCard.
The USAA World MasterCard is a great card if you’re a servicemember or a qualifying relative of a servicemember who can benefit from some of the military-friendly features. Otherwise, there are many other rewards cards that award more points and provide better options.