Ally Everyday Cash Back Mastercard review: Elevated cash back on everyday spending

This card has forgiving fees and is ideal for anyone who wants a solid rewards card but isn’t the most practiced credit card user. Although it’s an invite-only card, it’s worth looking into because it has good approval odds for people with fair credit.

Rewards rate: Boosted cash back rate in everyday categories

This card has generous rewards rates for everyday purchases with its 3 percent cash back for gas, groceries ad drugstore purchases. These categories are common on tiered cash back cards but its 3 percent back matches many of the most popular cash back credit cards. Plus, many cash back cards don’t have such high rates on all three categories — or many of them exclude drugstores altogether.

This card is invite-only, so you can’t plan to apply for and fit it into a cash back strategy. However, it’s a worthy option if the issuer invites you to apply, have fair to good credit and need a rewarding credit card to qualify for better rewards cards later.

Fees: Skips snowballing costs for missing payments

Not many cards can be as forgiving as the Ally Everyday Cash Back, so fair credit users should keep this card on their radar if they aren’t as familiar with using credit and are prone to missing payments or paying late.

Late payment fees and other costs associated with neglectful card use can quickly increase your balance and the interest you’ll owe. According to the Consumer Financial Protection Bureau, late fees impact cardholders in the subprime, deep subprime and near-prime brackets more than those in higher brackets. On average, fair credit users experience more late fees than users with good to excellent credit.

If you’re a fair credit user who might struggle with fees on another credit card, the Ally Everyday card is a great fit and could save you money. You may have a small annual of $39, but it skips returned payment fees, foreign transaction fees and won’t impose rate hikes for late payments. These skipped fees will help you pocket more of your cash back, especially if you aren’t the most seasoned credit card user. However, this shouldn’t be a crutch to make negligent credit habits a regular occurrence. Paying on time and in full are cornerstones of credit-building. If you’re interested in this card because it’s accessible with fair credit, be mindful of maintaining responsible credit habits to boost your score.

Approval: Good approval odds for fair to good credit applicants

Ally invites and accepts applicants in the fair to good credit range, so the Ally Everyday Cash Back card is great if you don’t qualify for some of the best cash back cards. Many cards for fair credit don’t boast favorable rewards rates or user-friendly perks, but the Ally Everyday has both. If you get an invite and are working on building your credit, this is a worthwhile option.

Although it compares poorly to some cash back cards for good to excellent credit, it’s a great bridge between fair and good credit.

A welcome offer is a significant miss on a card like this, especially because it may charge an annual fee. Although that fee is marginal compared to annual fees on premium rewards cards, this card also misses the chance to make up for that cost with a perks portfolio.

Welcome offer: Lacks a sign-up bonus

Welcome offers are coveted perks on any credit card because they’re a quick way to earn a lump payment for using your new credit card and meeting a spending requirement. Typically, cards with annual fees have the best welcome offers. However, some cards without annual fees have welcome offers worth up to $250 or offers that match all the cash back you earn in your first year. Either way, welcome offers help cards stand out in a competitive landscape.

Unfortunately, the Ally Everyday Cash Back card doesn’t stand out because it skips a welcome offer. Despite its great cash back rates for practical purchases, it fails to bring the outstanding first-year value that several no-annual-fee cash back cards carry. This shortcoming might not be a deal-breaker if you have fair credit, but other cards can add value to your first year if you have good credit.

Annual fee: Potential yearly cost eats into cash back earnings

You aren’t guaranteed to have an annual fee, but you still might. It’ll only be $39 a year at most, which is low for an annual fee on a rewards card, but more affordable options are available.

Whether you have an annual fee or not depends on your creditworthiness. If you have fair credit, you might be more likely to have an annual fee with the Ally Everyday card. However, this doesn’t make the Ally Everyday a bad card. It will still reward you generously for everyday purchases. Plus, it would be relatively easy to offset this card’s annual fee with regular spending. You’ll need to spend at least $110 monthly in the card’s 3 percent categories to earn enough cash back to offset a $39 annual fee.

But offsetting an annual fee with rewards earnings isn’t enough to make the card a good choice. Your credit card should work for you and bring value to your wallet. A card with a lower rewards rate and no annual fee might be a better fit for you if you don’t spend more than $110 per month.

Perks: Limited benefits compared to other cash back cards

Other cards for people with fair credit may come with perks like credit limit increases and introductory APR periods, making them convenient picks for quick, cost-effective credit building. Other cards available with good credit come with perks of monetary value, like the Disney Bundle Credit on the Blue Cash Everyday® Card from American Express.

The Ally Everyday is a compromise between a helpful credit-building card and a strong rewards card. It has a great rewards rate in practical categories and is accessible with average credit. It sounds great on the surface, but other cards make more sense if you want to lean into what you need most rather than trying to make one card do it all.

If you want great rewards and can qualify for the top cash back cards, then the Ally Everyday might not be at the top of your list. If you want credit-building features to build credit at a low cost, consider looking into secured cards or other credit-building cards.

Even though the Ally Everyday Cash Back Mastercard offers a decent reward rate on gas, grocery and drugstore purchases, several other cards offer better cash back rates. Plus, the prospective annual fee on this card might turn away some potential cardholders with lower credit scores.

Because you can only earn elevated rewards in three specific spending categories, pairing the Ally Everyday Cash Back Mastercard with a flat-rate cash back rewards card will be a great way to maximize your rewards.

The Ally Everyday card isn’t a great fit for everyone, but it has its place. Anyone with fair credit who wants access to rewards rates that are readily available on cards for good credit should have it on their radar.

While the Ally Everyday Cash Back Mastercard rewards you for everyday purchases at gas stations, grocery stores and drugstores, there isn’t much else that this card offers in terms of cardholder perks, sign-up bonus, reward redemption options or even a 0 percent introductory APR offer like you can find with other cash back rewards cards.

If you have fair to good credit, this could be a great card to graduate to while building credit and a decent pick to keep as an option for your everyday spending. But if you want more long-term value and the chance to maximize cash back in these spending categories, you’ll want to upgrade to another card once your credit improves.

The information about the Chase Freedom Flex℠ has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.

We rate credit cards using a proprietary card scoring system that ranks each card’s estimated average rewards rate, estimated annual earnings, welcome bonus value, APR, fees, perks and more against those of other cards in its primary category.

Each card feature is assigned a weighting based on how important it is to people looking for a card in a given category. These features are then scored based on how they rank relative to the features on other cards in the category. Based on these calculations, each card receives an overall rating of 1-5 stars (with 5 being the highest possible score and 1 being the lowest). 

We analyzed over 150 of the most popular rewards and cash back cards to determine where each stacked up based on their value, cost, benefits and more. Here are some of the key factors that influenced this card’s overall score and how the score influenced our review: