USAA Preferred Cash Rewards Credit Card Review: A Solid Earner for Military Families

USAA Preferred Cash Rewards Visa Signature Credit Card Benefits

The USAA Preferred Cash Rewards Card is an excellent choice for the first year or if you need lower fees.

Valuable Initial Spending Offer

One of the USAA Preferred Cash Rewards Card’s strongest features is the welcome spending offer. Earn 3% cash back on qualifying purchases for your first year on the first $15,000 you spend. After your first year, earn unlimited 1.5% cash back

I would take advantage of this card to maximize cash back on purchases that wouldn’t otherwise earn bonus rewards for with other cards. It’s particularly lucrative if you have significant upcoming expenses, like tuition, taxes or renovations. After your first year, I’d recommend using this card for any purchases that wouldn’t earn more than 1.5% with another card in your wallet.

Auto Deductible Reimbursement

The Preferred Cash Rewards Card comes with a unique feature: auto deductible reimbursement. If you make a minimum of eight transactions (minus credits and returns) in the previous calendar month, you can get up to $200 per 12-month period reimbursed toward your deductible payment if you have an eligible car insurance claim.

Robust Protections

For a no-annual-fee credit card, I think the USAA Preferred Cash Rewards Card comes with a surprisingly robust suite of benefits and protections. Here’s what you’ll get with your card:

• Cell phone protection: When you charge your monthly cell phone bill to your card, you can be reimbursed up to $500 if your eligible cell phone is stolen or damaged.
• Purchase protection: New retail purchases made with your card and/or rewards program associated with your covered credit card within the first 90 days from the date of purchase are covered for up to $1,000 per claim and $10,000 per cardholder in the event of theft or damage.
• Extended warranty protection: Extend an original manufacturer’s warranty of three years or less up to one additional year.
• Concierge service: 24/7 concierge access.

Travel Insurance

You’ll also get travel insurance that rivals many premium credit cards. Here’s what’s covered:

• Auto rental collision damage waiver: Reserve and pay for your rental car with your card and get secondary auto rental coverage worldwide on rental periods up to 31 days.
• Travel and emergency assistance: 24/7 worldwide assistance.
• Trip cancellation and interruption: Up to $1,500 per covered person for non-refundable prepaid passenger fare when you buy your ticket with your card.
• Travel accident insurance: Up to $500,000, depending on the loss. Coverage begins during courtesy ground transportation to and from the airport (or train depot, bus terminal, etc.), as well as between terminals and while you are at the airport — immediately before departure or immediately after arrival.
• Baggage delay reimbursement: Up to $100 a day, for up to three days, when your baggage is delayed four or more hours.

Low Fees

The card doesn’t charge annual, over-the-limit or foreign transaction fees. Also, cash advance fees are waived when transferring funds electronically to your USAA Federal Savings Bank deposit account.

USAA Preferred Cash Rewards Visa Signature Credit Card Drawbacks

Even if you can qualify for this card, you might want higher rewards or an intro APR offer on purchases and/or balance transfers.

Limited Availability

Availability is this card’s biggest drawback. USAA membership is only available to military members and veterans, along with their spouses and children. Families will need to provide certain personal information regarding their military affiliations to be eligible.

I’ve tried to qualify based on my grandfather’s service, but I was unsuccessful. I would only have been eligible if one of my parents (my grandfather’s child) was also a USAA member. Membership eligibility passes down through generations, but you must have a direct family member who is an established member (spouse, parent or child) to qualify through them.

Lower Flat-Rate Rewards

While the 3% initial rate is excellent, the USAA Preferred Cash Rewards Card becomes a mediocre option once the rate falls to 1.5%. Many no-annual-fee cards come with a 2% flat rate on purchases, meaning you’d leave significant money on the table the more you spend on this card.

For me, 2% is the floor for what I consider acceptable earnings on any purchase, unless I’m working toward a welcome bonus. With so many options to choose from, there’s not much of a reason to earn less than that if you have a good credit score.

No Intro APR Offer

While the spending offer can be lucrative, the card could benefit from an intro APR offer on purchases and/or balance transfers, which would go a long way toward improving its overall value. While you can carry a balance at a 15.65% to 27.65% Variable APR, I recommend finding an intro APR offer to manage your debt better.

Who Is the USAA Preferred Cash Rewards Visa Signature Credit Card Best For?

The USAA Preferred Cash Rewards Card is an excellent option if you’re a military family that wants an easy way to earn a higher-than-average flat cash back rewards rate on a significant amount of spending in the first year. If you can maximize this offer, you earn $450 in cash back in the first year.

The auto deductible reimbursement, purchase and cell phone protections, and travel insurance can also be lifesavers if needed, with coverage that ranks favorably against other card offerings.

Is the USAA Preferred Cash Rewards Visa Signature Credit Card Right for You?

The USAA Preferred Cash Rewards Card is right for you if you want a straightforward cash-back card with low rates and fees. Here are some reasons to consider the card:

• Earn 3% cash back on qualifying purchases for your first year on the first $15,000 you spend (after your first year, earn unlimited 1.5% cash back on all purchases)
• Auto deductible reimbursement worth up to $200 annually
• No annual fee, foreign transaction fees or penalty APR
• Excellent purchase and travel protections for a no-annual-fee card

Alternatives to the USAA Preferred Cash Rewards Visa Signature Credit Card

The USAA Preferred Cash Rewards Card offers military families simplicity with little to no cost. Here are two alternatives to consider:

• USAA Eagle Navigator® Credit Card: If you want a military card and like to travel, you might prefer the USAA Eagle Navigator Card. Although it charges a $95 annual fee, you can easily justify it if you can take advantage of the 10,000 annual bonus points (equal to $100 in travel) when you book hotels or cars through the USAA Rewards Center. You’ll also earn 3x points on a variety of travel and transit categories and 2x points on all other purchases, plus get a decent welcome offer.
• Wells Fargo Active Cash® Card: Even if you’re a servicemember, if you want a simple card with a high rate, you may do better with other options. The Wells Fargo Active Cash Card beats the Preferred Cash with a 2% cash rewards rate on purchases. The card also comes with an easy-to-earn welcome bonus, an intro APR offer, and its own set of solid protections. While the USAA Preferred Cash Rewards Card is better for the first year, it falls short in the long run.