USAA Cash Rewards American Express card review

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If you need to carry a balance and can qualify for the USAA Cash Rewards American Express card’s lowest available APR, this isn’t a bad card to carry in your wallet. For cardholders with the best credit scores, it offers one of the lowest APRs available on a rewards credit card, but still manages to deliver some modest cash rewards for moderate to heavy spenders. Like all USAA credit cards, the USAA Cash Rewards American Express card also offers a range of military-friendly benefits, including an extra low APR for active duty service members.

However, cardholders with less-than-perfect credit scores should think twice before applying – especially if they plan to carry a balance. The range of possible APRs on this modest rewards card is wide, with cardholders who barely make the cut potentially getting assigned an APR as high as 26.65 percent. The USAA Cash Rewards American Express card also utilizes a complicated tiered rewards program that rewards moderate to heavy spenders with a modest cash back program, but awards next to nothing to cardholders who only use their cards occasionally.

Stingy rewards for modest spenders

The biggest drawback to the USAA Cash Rewards American Express card is its confusing tiered rewards system, which is stacked against modest and occasional spenders. For cardholders who spend less than $5,000 a year, regular purchases will earn just 0.45 percent cash back – a paltry sum compared to the 1 percent cash back that most cash back credit cards offer – while gas and grocery purchases will net 1.45 percent cash back. Meanwhile, cardholders who spend up to $10,000 a year – roughly $833 a month or less – will take in 0.45 on the first $5,000 they spend and just 0.85 percent on the next $5,000 in purchases. Grocery and gas purchases would earn 1.85 percent cash back – after cardholders spend $5,000.

Moderate to heavy spenders also get short shrift

Even moderate to heavy spenders are awarded relatively small amounts compared to what most cash back credit cards offer. To earn the standard 1 percent cash back rate on regular purchases, for example, cardholders would need to spend between $10,000 and $17,000 a year – and even then the 1 percent rewards rate would kick in only after cardholders spend $10,000.

With such a paltry sum, the most cardholders would be able to earn on regular purchases would be $135 – $35 less than a typical cash back card that offers 1 percent on general purchases would award. (Gas and grocery purchases would earn 2 percent cash back.) The card’s advertised cash back rate of 1.25 percent on general purchases and 2.25 percent on gas and groceries kicks in only after cardholders spend more than $17,000 a year. If you spend that much every year with credit, you would almost certainly be better off with a more generous card – as long as you can afford to repay your balance.

Low APR for some

Despite its less-than-generous rewards program, the USAA Cash Rewards American Express card does offer an uncommonly low rewards rate of 10.65 percent for cardholders with excellent credit, making it a still decent pick for certain types of cardholders. If you plan to carry a balance, but still want some cash back, the USAA Cash Rewards American Express card is significantly more affordable than many low rate cash back cards.

The average low interest card, for example, charges an average APR of 12.10 percent, while the average cash back card charges a minimum APR of 15.43 percent. But if your credit is imperfect, you could get hit with an unaffordable interest rate. The USAA rewards card advertises one of the widest APR ranges on the market, making it hard to guess which rate you’ll get. The card’s maximum APR of 26.65 percent is exceptionally high for any credit card and could cause cardholders’ debt to spiral out of control if they overcharge.

Hard-to-find military benefits

One of the biggest benefits of the USAA Cash Rewards American Express card is that it caters to military families. Like all USAA credit cards, it offers some of the most robust protections active duty service members can get, including a 4 percent APR on new and current debt when cardholders are deployed overseas and a rebate on interest when cardholders are awarded a qualifying medal. USAA also waives foreign transaction fees – a huge perk for military families who live abroad.

Why get the USAA Cash Rewards American Express card?

• You have excellent credit and are looking for a cash back card with a lower than average interest rate.
• You’re a military service member and would benefit from the card’s protections.
• You prefer cash back instead of points.

 How to use the USAA Cash Rewards American Express card:

• To maximize the amount of cash back you receive, use your card for all or most of your purchases, including your gas and grocery purchases. The card’s biggest bonuses don’t kick in until you’ve spent a large amount.
• Don’t carry a large balance if you’re charged a higher APR on this card. The card’s maximum rate is so high that your debt could quickly spiral out of control – especially if you only pay the minimum amount due.
• If you’re an active duty service member, contact USAA within six months of when you return home from your deployment or when you return from a campaign for which you received a medal in order to take advantage of your benefits.

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