The rise of online banks – those without brick and mortar branch locations or in-person representatives – has been undeniable since the economic downturn of 2008/2009. Banking customers wanted a shift away from big banks with, at times, excessive fees, low to no interest accumulation, and in some cases poor customer service. Ally Bank has lead the charge in the impressive world of online banking, allowing customers the ability to earn as much as 1% on a conventional savings account with a minimal initial deposit and no ongoing fees.
In April 2016, savvy savers received exciting news direct from Ally; a new cash back credit card made available directly through the bank that offers perks specifically designed for loyal online savers with the bank. Enter the shiny, new Ally Cash Back credit card.
Ally Card Basics
The new Ally Cash Back credit card is similar to other credit cards offering rewards programs in that it provides the opportunity to earn points in different purchase categories. First, card members earn two points for each dollar spent on purchases made at gas stations as well as grocery stores. These categories make it a great choice for card members who utilize their credit card for everyday spending. It is important to note that purchases made on gas or grocery items through warehouse clubs or superstores may not qualify for the enhanced 2% cash back.
In addition to the 2% categories, card members also earn a flat rate 1% on all other purchases made with the card. Rewards accumulated through the Ally Cash Back credit card do not come with pesky spending caps, nor do they expire as long as the card account remains in good standing with the bank. Ally Bank does not require a minimum rewards balance in order to redeem rewards at this time.
The cash back feature that makes the Ally credit card so attractive to current Ally banking customers is the bonus offered on redemption. A 10% Ally deposit bonus is automatically applied when cash back is redeemed as a deposit into an eligible Ally bank account. Money market accounts, non-IRA online savings accounts and interest checking accounts all qualify as eligible for the deposit bonus. The ramp up in rewards value for Ally bank deposits makes this card an incredibly valuable tool in earning rewards for current Ally Bank customers.
In addition to the rewards categories, Ally Bank is offering a $100 bonus for new card members who spend no less than $500 in the first three statement cycles. Card members should note that certain purchases or transactions do not qualify for rewards accumulation, including the following:
- Balance transfers
- Cash advances
- Business purchases
- Traveler’s checks
- Money order
- Lottery tickets or gambling chips
- Wire transfers
- Foreign currency
- Prepaid cards
- Interest charges
Ally Bank Perks
Ally Bank does not offer as many additional card member perks as other major credit card issuers. However, card members of the new Ally Cash Back credit card have the ability to utilize the card for purchases anywhere Visa is accepted. The Ally Cash Back credit card can be added to Apple Pay or Samsung Pay for card members who wish to make purchases via those outlets. Additionally, the Ally Cash Back credit card comes in either the Signature or Platinum card, with the former offering complimentary access to a 24/7 concierge, access to exclusive entertainment events, and special shopping benefits not afforded to Platinum card members.
Ally Cash Back Card Expenses
Card members who hold the Ally Cash Back credit card are not charged an annual fee; however, other expenses inherent to credit cards do apply. For qualified applicants, the interest rate for purchases is either 13.24%, 18.24% or 23.24%, based on credit history and score. The APR is variable, meaning it may fluctuate over time in line with broad interest rate market movement. Balance transfer fees also apply, but a current promotion offers a 0% APR on balance transfers for the first 12 billing cycles after the account is opened. After the introductory period ends, balance transfer APRs revert to the same rate applied to purchases based on the card member’s creditworthiness. Cash advances incur an interest rate of 23.49% regardless of credit qualifications.
In addition to the interest rate assessed on balance transfers after the promotional period ends, card members are charged $10 or 4% of the amount of each transfer, whichever is greater. Additionally, cash advances come with a $10 or 5% fee for each transaction, whichever is greater. Card members who make purchases outside the United States on a consistent basis may want to avoid the Ally Cash Back credit card as it comes with a 3% transaction fee for each purchase overseas.
Card members who make late payments are assessed a $35 per occurrence, although there is no fee assessed for utilizing the card above and beyond the stated credit limit.
When compared to other cash back credit cards available to well qualified applicants, the Ally Cash Back credit card is highly competitive in certain areas. While some other credit card issuers offer up to 5% cash back on select purchases in certain categories, earnings are limited based on total spending, and in some cases, categories must be activated and tracked on a quarterly basis to reap the full benefits. Ally Cash Back credit card takes away that headache for card members, and offers substantial bonus potential for current Ally Bank customers who utilize the cash back earned as a deposit into an already established Ally account.
Credit card users looking for a variety of additional card member perks may not be all that impressed with what Ally Bank has to offer. A concierge service and exclusive access to events are the end of the line for specialized benefits. Also, card members who spend heavily on foreign transactions are better off with a cash back card that does not impose a fee for each overseas purchase. The new Ally Cash Back credit card is best suited for individuals who already bank with Ally, those who prefer a simplistic cash back rewards program, and those who spend consistently on every day purchases with their credit card.