IKEA Visa Credit Card review

IKEA Visa Credit Card review

Published: October 16, 2019
Published: October 16, 2019
Ratings Policy
Rewards Rating:
1.5 rating
1.5 rating
1.5 / 5
Rewards Value: 1.8
Annual Percentage Rate: 1.5
Rewards Flexibility: 1.4
Features: 1.0

In a Nutshell:

You’ll earn rewards at a nice clip with the IKEA Visa Credit Card, but since you can only redeem Rewards Certificates at IKEA, the card will be of little use to anyone but the store’s most loyal shoppers.

Rewards Rate

  • 5% back in Rewards Dollars on U.S. IKEA store and IKEA.com purchases, Traemand installation and TaskRabit assembly services
  • 3% back on dining, grocery and utility purchases
  • 1% back on all other purchases

Sign-up Bonus

  • $25 IKEA Rewards Certificate when you spend $500 on purchases outside of IKEA, Traeman and TaskRabbit in the first 90 days.
  • $25 statement credit if you make an online purchase of $25 or more the same day your application is approved.

Annual Bonus

None

Annual Fee
$0

Average Yearly Rewards Value ($1,325 monthly spend)
$251

APR
21.99%

Pros

  • Great rewards rate on IKEA, Traemand and TaskRabbit purchases.
  • Earn rewards in popular spending categories outside IKEA.
  • Rewards Certificates issued automatically.
  • Includes free delivery (a value of $59 or more)

Cons

  • No option to redeem rewards outside of IKEA.
  • Rewards Certificates only credited in $15 increments.
  • Rewards Certificates expire after only 45 days.
  • No 0 percent introductory period or special financing options on IKEA purchases.
  • The APR is fairly high (even for applicants with excellent credit).

Other Notable Features: Free delivery, auto rental protection, automatic enrollment in the IKEA Family loyalty program (which includes perks like 90-day IKEA product price protection, free coffee or tea at the IKEA Restaurant and a birthday surprise)

At a glance, the IKEA® Visa® Credit Card seems like a must-have for shoppers who visit IKEA with any regularity. The card’s generous rate on IKEA-related purchases as well as dining, groceries and utilities should help you earn rewards at a steady pace, especially if you’re shopping for a move or remodel.

But there’s a catch: You can only redeem your rewards at IKEA, and you won’t have much time to do so. Add to this a high APR, no promotional financing options and little in the way of perks, and the IKEA Visa quickly starts to lose its appeal.

If you can see yourself shopping at IKEA at least once every few weeks, you’ll certainly get some value out of the card. But if you only stop by occasionally, you’ll likely be too frustrated by the IKEA Visa’s redemption scheme to stick with the card long-term.

Great rewards rate on IKEA purchases

The IKEA Visa’s generous 5 percent rewards rate on IKEA purchases, Traemand installation and TaskRabbit assembly services exceeds that of many other store-branded cards, including the Costco Anywhere Visa® Card by Citi and the Wayfair Credit Card. Purchases made with the card also include free delivery (worth $59 or more), a unique perk that could save frequent IKEA shoppers a lot of money.

Outside of IKEA, you’ll earn a respectable 3 percent back in Rewards Dollars on dining, groceries and utilities – practical spending categories that shouldn’t require you to go out of your way to earn rewards.

If you were to spend $2,000 at IKEA, you’d earn about $100 in Rewards Dollars. Add to this an average annual spend of $2,862 on dining (earning about $85 in Rewards Dollars) and $3,567 at grocery stores (earning about $107 in Rewards Dollars) and you’d end up with roughly $300 in Rewards Dollars at the end of the year.

But keep in mind: Rewards Dollars are not cash back. In contrast to some store cards, which let you choose to redeem rewards as cash, statement credits or store credits, the IKEA Visa’s rewards can only be used for purchases at IKEA.

Limited redemption options

The IKEA Visa’s redemption scheme is a bit convoluted and comes with a lot of caveats. Most notably, any rewards you earn can only be used on future purchases at IKEA, making them little more than IKEA store coupons.

Here’s how the program works:

Every time you use your IKEA Visa card, you earn Rewards Dollars. Once you have $15 in Rewards Dollars, you’re automatically issued a $15 Rewards Certificate, which can only be used at IKEA (not as cash back or credit against your card balance).

Certificates are only issued in $15 increments and can only be redeemed in $15 increments. So if, for example, you wanted to cover a $20 purchase, you’d need to use two $15 certificates totaling $30. The $10 in unused rewards left over would be forfeited. Additionally, if your Rewards Certificates don’t cover the cost of your purchase, you’ll have to use your IKEA Visa to pay the difference.

Such terms seem excessively restrictive and will severely limit the IKEA Visa’s usefulness for most cardholders, forcing them to return to the store again and again.

While they can’t match the IKEA Visa’s rewards rate on IKEA-related purchases, other rewards credit cards offer much easier redemption and are probably a better long-term option in most cases. The Bank of America® Cash Rewards credit card is one great alternative, as it allows you to claim 3 percent cash back on furnishings – including IKEA purchases – along with 2 percent cash back on grocery store and wholesale club purchases (up to $2,500 in combined purchases quarterly, then 1 percent).

Rewards have a short shelf life

Not only do you have little choice in how you redeem your rewards, you have very little time to use them. Rewards Certificates expire 45 days after they’re issued, making it next to impossible to save up rewards for a large purchase or hold off on redeeming rewards until you find a special item.

Additionally, since certificates are issued automatically, you’ll have to keep a close eye on your account to ensure they don’t expire before you realize they’re available. If you don’t have time to track your rewards or stop by IKEA every few weeks to use your certificates, they’ll most likely go to waste.

Shrug-worthy sign-up bonuses

While the IKEA Visa’s sign-up bonuses are comparable to those of many other store cards, they pale in comparison to those of most rewards cards, which can offer much bigger bonuses with the same spend requirement and no annual fee.

If you spend $500 or more outside of IKEA, Traeman and TaskRabbit in the first 90 days, you’ll earn a $25 IKEA Reward Certificate. Compare this to the Chase Freedom card, which has no annual fee and offers a $150 credit when you spend $500 in the first three months.

Similar to several other store-branded cards, the IKEA Visa offers a $25 credit if you spend $25 at IKEA.com the same day you’re approved. Since you won’t have much time to browse, it might be wise to have something in mind you’d like to buy before you apply.

A high APR and no promotional financing

If you have any doubt about your ability to pay off your balance in full each month, you should pass on the IKEA Visa in favor of a low-interest card, ideally one with a 0 percent introductory APR. The IKEA Visa’s 21.99 percent APR is about average among store-branded cards, but very high compared to the average APR.

Given how quickly costs can pile up when you’re furnishing or remodeling a space, it’s also important to note that the IKEA Visa offers no 0 percent APR promotional period on new purchases, making it a poor choice if you’d rather pay for a large purchase over time.

If you’re looking to finance an IKEA purchase, the separate IKEA Projekt card offers 0 percent interest for six, 12 or 24 months depending on the size of your purchase, after which the APR is also 21.99 percent. Unlike many store cards, the Projekt card doesn’t use a risky deferred interest model, making it a better choice than the IKEA Visa if you’re planning to make a big IKEA purchase but don’t expect to visit the store much afterward.

Underwhelming perks

Aside from free delivery – which, to be fair, is a terrific bonus for frequent IKEA shoppers – the IKEA Visa offers few perks for cardholders. Along with auto rental protection, you’ll be automatically enrolled in the IKEA Family loyalty program, which is already free for anyone to join and includes 90-day IKEA product price protection and free coffee or tea at the IKEA Restaurant.

How does the IKEA Visa Credit Card compare to other rewards cards?

Like many retail cards, the IKEA Visa’s value is seriously diminished outside of the store. If you’re looking for a more versatile card, there are a few that offer rewards on both furniture purchases and everyday purchases like gas and groceries. Best of all, you can use your cash back as you like, and aren’t forced to redeem rewards at IKEA. Here’s a quick look at a few of our favorites:

US Bank Cash Visa

U.S. Bank Cash+TM Visa Signature® Card

Amazon Prime Rewards Visa Signature

Amazon Prime Rewards Visa Signature card

Bank of America Cash Rewards

Bank of America® Cash Rewards credit card

Rewards rate

  • 5% cash back on 2 categories of your choice ($2,000 purchase limit per quarter)
  • 2% cash back on your choice of one everyday category, such as gas stations or grocery stores
  • 1% cash back on other purchases
Rewards rate

  • 5% back on Amazon.com and Whole Foods purchases
  • 2% back on restaurant, gas station and drug store purchases
  • 1% back on other purchases
Rewards rate

  • 3% cash back on category of your choice (gas, online shopping, dining, travel, drug stores or home improvements and furnishings)
  • 2% cash back on grocery store and wholesale club purchases
  • $2,500 combined limit on 2% and 3% categories each quarter
  • 1% cash back on other purchases
Sign-up bonus

  • $150 if you spend $500 in the first 90 days
Sign-up bonus

  • $70 Amazon.com gift card
Sign-up bonus

  • $200 online cash rewards if you spend $1,000 in first 90 days
Annual fee

  • $0
Annual fee

  • $0 (requires $119 Amazon Prime subscription)
Annual fee

  • $0
Other things to know

  • Must select bonus category each quarter
  • 5% bonus categories include (but aren’t limited to) department stores, fast food, gyms, furniture stores, charity
Other things to know

  • No foreign transaction fees
  • Free 2-day delivery on many items bought on Amazon.com
Other things to know

  • No rewards options besides cash back
  • Change your choice category once per calendar month
  • View spending snapshot each month to help choose a bonus category

U.S. Bank Cash Visa Signature Card

A popular customizable rewards card, the U.S. Bank Cash Visa Signature Card offers 5 percent cash back in 2 bonus categories of your choice and 2 percent cash back in an everyday spending category of your choice. The long list of 5 percent bonus categories includes furniture stores like IKEA, as well as department stores, fast food restaurants, movie theatres and more. The card allows you to change your category of choice once per quarter and comes with a quarterly purchase limit of $2,000 in 5 percent bonus categories.

Amazon Prime Rewards Visa Signature card

The Amazon Prime Rewards Visa Signature card doesn’t charge an annual fee, but requires an Amazon Prime membership. The card’s 5 percent rewards rate on Amazon.com purchases could offer a lot of value if you don’t mind shopping for furniture online, and Prime membership includes free two-day shipping on many items. You’ll also get a 5 percent rewards rate on Whole Foods purchases and a 2 percent rewards rate on gas, making it a decent option for everyday spending.

Bank of America Cash Rewards credit card

Another great choose your bonus category rewards card, the Bank of America Cash Rewards credit card offers 3 percent cash back in a category of your choice and 2 percent cash back on grocery store and wholesale club purchases (up to a combined $2,500 quarterly, then 1 percent). Along with furniture stores like IKEA, 3 percent bonus category choices include gas, online shopping, dining, travel, drug stores and home improvements. You can change your bonus category choice once per calendar month, making the card ideal if your spending habits change from month to month.

Why get the IKEA Visa Credit Card?

  • You shop at IKEA frequently.
  • You often have IKEA items delivered.
  • You spend a fair amount on dining, groceries and utilities.
  • You can afford to pay off your purchases in full each month.

How to use the IKEA Visa Credit Card:

  • Use the card for all IKEA, Traeman installation and TaskRabbit assembly service purchases.
  • Use your card for dining, groceries and utilities to take advantage of the bonus rewards rate.
  • Use any Rewards Certificates you earn within 45 days to be sure they’re not wasted.
  • If using paperless statements, keep an eye on your account to see when Rewards Certificates become available.
  • Spend $500 outside of IKEA in the first 90 days to get a $25 Rewards Certificate.
  • Spend $25 or more at IKEA.com the same day you’re approved for the card to get a $25 statement credit.
  • If you need to finance a larger IKEA purchase, consider the IKEA Projekt card or a different rewards card with a 0 percent introductory APR on new purchases.

Is the IKEA Visa Credit Card worth it?

The IKEA Visa card’s impressive rewards rate on IKEA-related purchases, though enticing, is far outweighed by the card’s overly restrictive redemption scheme and the extremely short life of IKEA Rewards Certificates. If you’re an uncommonly devoted IKEA customer and don’t mind visiting frequently to ensure your rewards don’t go to waste, you could save a decent amount of money with the IKEA Visa card. Otherwise, you’ll likely be better off with a more flexible rewards card.

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