USAA Preferred Cash Rewards Credit Card review

Current welcome offer

This card has no welcome offer other than its introductory APR for new purchases. That’s disappointing considering several competing no-annual-fee cash back and rewards cards give you a chance at bonuses worth $200 or more after $500 to $1,000 in spending in your first three months.

Rewards rate

This card offers a decent flat rewards rate of 1.5 percent cash back on all qualifying purchases, with no category restrictions. This flat rate can streamline the process of earning cash back, especially if your purchases typically fall outside of common credit card bonus categories. It also pairs well with the rates you’ll find on tiered rewards cards that earn more than 1 percent back in popular categories like gas and groceries.

How you earn

You earn 1.5 percent cash back on qualifying purchases. That’s a typical — though not particularly impressive — rate for a flat-rate rewards card. Still, the Preferred Cash Rewards Visa Credit Card could be a great option for purchases that typically earn just 1 percent back on rewards cards. For example, many grocery rewards cards exclude wholesale clubs like Costco and superstores like Walmart from their grocery bonus category. A flat-rate rewards card like the Preferred Cash Rewards Visa Credit Card will earn more cash back at these locations. It will also earn a higher rate than many rewards cards in categories like home improvement and utilities, which typically only earn 1 percent back on rewards cards.

That said, since the Preferred Cash Rewards Visa Credit Card doesn’t carry the highest flat rewards rate, other cards may be a better choice long term, especially cards that offer up to 2 percent cash rewards on general purchases, such as the Wells Fargo Active Cash® Card, the PayPal Cashback Mastercard® and the Citi Double Cash^® Card (which earns 1 percent when you buy and 1 percent as you pay off purchases). 

How to redeem

The Preferred Cash Rewards Visa Credit Card offers straightforward  redemption. Your only choices are statement credits or direct deposits into your USAA checking or savings account.

There aren’t as many redemption options as you might find with other cards, like gift cards and travel redemptions, but it’s simple. USAA gives you the choice of direct cash, which you can put towards anything you want, or you can use your rewards to help pay off your monthly statement. Either way, you don’t lose any of the value of your rewards.

With the 1.5 percent cash back rate on purchases, every point is worth 1.5 cents per dollar. This means if you spend $500 per month with the Preferred Cash Rewards Visa Credit Card, you’ll earn around $90 in cash back by the end of your first year.

Although its rewards program isn’t the most impressive out there, the Preferred Cash Rewards Visa Credit Card offers a solid selection of protections and travel benefits.

Travel benefits

This card has several travel benefits worth mentioning, which is a surprising twist for a no-annual-fee card. These benefits include: 

• Auto rental collision damage waiver: Reserve and pay for your rental car with your USAA card and decline the rental agency’s coverage for 31 days of protection worldwide
• Trip cancellation and interruption insurance: Use your card to buy your ticket or airfare and receive coverage for up to $1,500 per covered person for non-refundable prepaid passenger fare when your travel is interrupted or canceled.
• Travel accident insurance: Use your card to buy your ticket for air travel, ferry, cruise ship or bus transportation and receive coverage for loss of life or limb.
• Baggage delay reimbursement: Your card qualifies you for up to $100 of reimbursement per day for up to three days if your checked baggage is delayed.

Concierge service

Not to be outdone by some of the higher-end travel cards, the Preferred Cash Rewards Visa Credit Card offers cardholders get 24/7 concierge service access. This handy perk could be a lifesaver for people with busy schedules, as the concierge will handle everything from pre-trip planning services to on-site assistance with everyday household needs.

Cardholders will save on some common fees. This card has no annual fee or penalty APR. You also won’t be charged a foreign transaction fee, which is especially attractive if you’re in the military and stationed overseas or travel abroad frequently.

You also have 15 months of an introductory 0 percent APR on new purchases before the regular 17.15 percent to 31.15 percent variable APR kicks in. While the low end of this rate is less than the current national average, the high end is higher than most APRs.

As long as you haven't had a late payment within the last six billing periods, your late fee will be $25. Otherwise, the fee jumps to $35. The same rule applies to returned payment fees. There is no over-the-limit fee. USAA charges 5 percent of the amount of each balance transfer and cash advance.

While the relatively low APR and 1.5 percent rewards rate can be appealing for those who spend outside traditional categories, this card won’t be ideal for spending in everyday categories. For those who want more cash back from their spending, it may be better to look at alternatives. However, the Preferred Cash Rewards Visa Credit Card is leading the charge for travel benefits on a no-annual-fee cash back card.

Preferred Cash Rewards Visa Credit Card vs. USAA® Cashback Rewards Plus American Express® Card

The USAA® Cashback Rewards Plus American Express® card* is a great option if you’re serving on a military base on active duty. It offers 5 percent cash back on your first $3,000 spent on military base purchases and gas each year and 2 percent back on your first $3,000 spent on grocery purchases. These rates can be more rewarding for cardholders with focused spending strategies and routine expenses.

Both cards lack welcome bonuses, which makes them compare poorly to other consumer cards. However, one key difference is that the USAA Cash Rewards Plus offers an intro APR for balance transfers, while the Preferred Cash Rewards Visa Credit Card offers an intro APR on new purchases. This distinction could dictate which card is better for you, but the rewards rates should take precedence. That is unless your balance transfer to the Cash Rewards Plus card will save you more money in interest charges than you stand to gain from rewards earnings on either card.

The Cash Rewards Plus also charges foreign transaction fees, cutting into your earnings should you be stationed internationally and make frequent purchases off-base. Still, if most of your spending is on the military base, it will be higher than the 1.5 percent you would with the Preferred Cash Rewards Visa Credit Card.

Preferred Cash Rewards Visa Credit Card vs. Navy Federal Credit Union Visa Signature® Flagship Rewards Credit Card

Despite the name, Navy Federal caters to all military branches and veterans. With the Navy Federal Credit Union Visa Signature Flagship Rewards credit card*, cardholders can earn 3X points on travel and 2X points on all other purchases.

The Navy Federal Flagship Rewards card also comes with a statement credit of up to $100 for Global Entry or TSA application fees and collision damage waivers on top of the Visa Signatures it shares with the Preferred Cash Rewards Visa Credit Card. Plus, you get Amazon Prime free for one year, a lower ongoing APR and the opportunity to earn 30,000 bonus points when you spend $3,000 with your card in the first 90 days of opening your account.

This card has a $49 annual fee, but Navy Federal waives it for the first year. Considering the card’s welcome offer, low APR and rewards potential, this fee seems like a modest price you can easily offset with regular spending. Some may prefer a no-annual-fee card like the Preferred Cash Rewards Visa Credit Card, but those who travel often can easily make the most of the Navy Federal Flagship card.

Best Cards to pair with the Preferred Cash Rewards Visa Credit Card

The easiest way to take advantage of the Preferred Cash Rewards Visa Credit Card’s flat rewards rate is to pair it with a tiered rewards credit card. You’ll want to look for one with a range of specialized categories offering higher rewards rates. You can also receive more perks like a welcome bonus and an intro APR offer for balance transfers.

For example, the Discover it® Cash Back offers 5 percent cash back in rotating categories throughout the year up to the quarterly maximum of $1,500 when you activate, then 1 percent. One quarter, you may earn on grocery stores and streaming services; the next, you could earn on restaurant purchases. You could focus on specific categories with Discover it® Cash Back and use the Preferred Cash Rewards Visa Credit Card for all other purchases while taking advantage of the intro APR offer on purchases.

If you’re a USAA member looking for a streamlined way to earn rewards while enjoying a nice mix of travel perks, the Preferred Cash Rewards Visa Credit Card may be worth a look. It can be especially valuable when paired with a card that earns more than 1.5 percent back in everyday spending categories like groceries, dining or gas.

That said, other flat-rate rewards cards offer higher rates and may be a better long-term value, so they may be a better choice if you don’t mind working with a different issuer. 

*The information about the USAA® Cashback Rewards Plus American Express® Card and USAA® Cashback Rewards Plus American Express® Card has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.