USAA offers several financial products for current and former military members and their families, including four cash-back cards. Its USAA® Cashback Rewards Plus American Express® Card has one of the highest rewards rates among all its offerings. Cardholders earn 5 percent cash back on gas and purchases at military bases, 2 percent cash back on groceries and 1 percent cash back on all other purchases, allowing cardholders to accrue rewards without worrying about high fees. USAA also gives cardholders a break if they miss a payment during the first six billing periods – the fee is $25 during that initial period (it increases to a late penalty fee of $35 afterward).
Some of the USAA® Cashback Rewards Plus American Express® Card key features:
The USAA® Cashback Rewards Plus American Express® Card offers a straightforward rewards structure. There aren't any rotating categories or a cash-back calendar that cardholders must keep track of to maximize their rewards. It's pretty simple: 5 percent cash back for purchases at gas stations, commissaries, exchange and shopette locations on military bases (on up to $3,000 spent annually); 2 percent cash back at supermarkets (up to $3,000 spent annually); and unlimited 1 percent cash back on all other purchases. This rewards structure rivals other competitive cash-back cards on the market, such Chase Freedom® that offers 5 percent cash back on up to $1,500 in purchases every quarter you sign up in specific bonus categories, and the Discover it® - Cashback Match™ that also offers 5 percent cash back when you sign up on up to $1,500 in purchases in bonus categories that rotate quarterly.
Like these cards, the USAA® Cashback Rewards Plus American Express® Card has no annual fee and no foreign transaction fees, but what sets it apart is the flexibility the card offers military personnel. The card's interest rate can be high, but military members get several breaks to ease some of the financial burden for their families while they're deployed. Though the card lacks a 0 percent intro APR offer, USAA offers a deployment/PCS (relocation) rate of 4 percebt on all balances the first year. Cardholders also get a special interest rate under the Servicemember's Civil Relief Act (SCRA). If a servicemember has a balance on the card when he or she enters active duty, a 4 percent APR will be applied to the existing balance until one year after that military member completes active duty.
The card's redemption options are flexible, too. Cardholders can redeem their rewards at any time for any amount of cash back in $1 increments. Several cash-back cards on the market allow you to only redeem rewards once you accrue at least $20 or $25 in cash back.
Bottom line: This is a good no-fee card with flexible redemption options and special financial benefits for military members. If you're looking for a no-fuss card with a straightforward rewards structure, then you should consider this card.
Unfortunately, the USAA® Cashback Rewards Plus American Express® Card has certain disadvantages compared to other cash-back competitors. There's no 0 percent intro purchase or balance transfer APR, so cardholders not deployed or relocating to another base will have to pay the regular APR, otherwise they'll receive the special deployment/PCS APR of 4 percent. And while a 4 percent APR is respectable, Citi gives military members a 0 percent APR rate while they are on active duty (federal law sets a 6 percent interest cap for all active duty servicemembers).
There's also a 3 percent transaction fee on balance transfers, but USAA caps this fee at $200 for each transfer.
Cashback Rewards Plus American Express® Credit Card members shouldn't overlook the card's fine print either. That 2 percent cash back on groceries only applies to purchases at supermarkets and neighborhood grocery stores – not discount stores like Walmart or wholesale clubs like Costco and Sam's Club. If you do most of your regular grocery shopping at these merchants, then a card that offers more flexibility in this category will reap more rewards. However, many military families shop at commissaries or the Post Exchange (PX) because items are often cheaper than a commercial grocer, so this detail might not be a deal breaker.
Another downside is the card's annual spending cap of $3,000. When you compare it to cards like Chase Freedom®, which has a quarterly spending cap of $1,500 or $6,000 a year, the Cashback Rewards Plus American Express® Credit Card's cap is 50 percent less. After you reach this $3,000 cap, you only earn 1 percent cash back on gas, military base and grocery purchases. Military members who want to maximize their rewards and don't mind strategizing their spending around rotating categories, might want to opt for a card with a higher spending cap as their sole cash-back card or use the Cashback Rewards Plus American Express® Credit Card in combination with it.
Cashback Rewards Plus American Express® Credit Card vs. PenFed Power Cash Rewards Visa Signature® Card: The PenFed Power Cash Rewards Visa Signature® card is open to current and former military members, U.S. government employees and other members of qualifying organizations who join the Pentagon Federal Credit Union. You earn up to 2 percent cash back on gas, groceries and all other purchases if you're a member of the PenFed Honors Advantage Program. Otherwise, it's 1.5 percent Like the Cashback Rewards Plus American Express® Credit Card, the PenFed card has no annual fee and no foreign transaction fee, but its key differentiator is that it offers a 0 percent APR on balance transfers for the first 12 months.
PenFed members get discounts on insurance, home warranty, home protection and on mortgage fees if they're buying a home, but the card doesn't have military-specific benefits like what USAA's card offers. If your main concern is managing your finances during deployment, then the Cashback Rewards Plus American Express® Credit Card is the better option.
Cashback Rewards Plus American Express® Credit Card vs. Preferred Cash Rewards Visa Signature®: The USAA® Preferred Cash Rewards Visa Signature® Card offers unlimited 1.5 percent cash back, no annual fee and no penalty APR. Like its sister card, there's a 3 percent balance transfer fee.
The one difference is that the USAA® Preferred Cash Rewards Visa Signature® Card card has a flat, unlimited rewards structure, while the Cashback Rewards Plus American Express® Credit Card has specific rewards categories and a $3,000 annual cap. Both cards offer the same travel, security, retail and military benefits, so cardholders who want a simpler rewards structure would be better off with USAA® Preferred Cash Rewards Visa Signature® Card.
Cashback Rewards Plus American Express® Credit Card vs. Blue Cash Everyday® Card from American Express
The Blue Cash Everyday® Card from American Express isn't a military-specific card, but it does feature cash-back rewards categories that could fit well into a military lifestyle (American Express is a CardRatings advertiser). Earn 3 percent back at U.S. supermarkets (on up to $6,000 spent annually, then 1 percent), 2 percent back at U.S. gas stations and select U.S. department stores and 1 percent on all other purchases. There's no annual fee with this card, but there also aren't the military-specific protections that the USAA card offers.
You can snag a healthy welcome offer right now, though. Spend $1,000 in the first three months and you'll earn $150 in bonus cash back.
Past or current military members who want a card that caters especially to them are who should take a long look at this card. With the SCRA benefits, military members who are actively deployed or relocating also have less of a financial burden if they have an existing balance or if their families need to use the card to cover day-to-day or emergency expenses while they're away. For those making the ultimate sacrifice for their country, these benefits are just a small way USAA can reward them for their service.