Travel Tricks

The New Uber Credit Card: Should You Pick One Up?

Uber App

Uber and Barclaycard recently released a co-branded credit card that has some unique features. Given Uber’s popularity, many people gravitated towards this card and assumed the benefits would provide some great value towards their rides and their meals with UberEATS. However, despite the fact that the card has the company’s name on it, I would argue that it’s not the best card if you are an Uber loyalist.

Overview of the Benefits of the Uber Credit Card

No annual fee
Sign-up bonus of $100 after spending $500
$50 credit towards online subscriptions after spending $5,000 annually
$600 in cell phone protection when you pay your bill with the card
Cash back bonus categories:
–  Earn 4% cash back at restaurants, bars, and UberEATS
–  Earn 3% cash back at airlines, hotels, and vacation rentals (like Airbnb)
–  Earn 2% cash back for online purchases including Uber, online shopping, video and music streaming services (several exclusions apply for these categories so be sure to read the fine print)
–  Earn 1% cash back on all other purchases
You can redeem the cash back you earn in the form of a statement credit or credit your Uber account.

Should You Sign Up?

This card comes with an interesting combination of features, especially considering it does not carry an annual fee. The two features that are particularly compelling are the $50 bonus towards subscription services for $5,000 in annual spending and the 4% earning rate on dining purchases. Most of us subscribe to at least one online service for music or television so this bonus is not difficult for most people to take advantage of. $50 for $5,000 in spending basically adds 1% cash back for the first $5,000 you spend each year. In other words, you’d really be earning 5% cash back on dining purchases up to $5,000 each year. That’s great value for a no-fee credit card!

Besides these two features, the cash back rates for the other categories are ok but you can get better value from other cards in these categories. The cell phone protection is a nice bonus but, at $600 in protection, is also not a game-changer. Finally, the sign-up bonus is a nice perk if you were planning on signing up for the card anyway, but I wouldn’t run out to get the card just for the hundred bucks as there are far more lucrative sign-up bonuses out there.

Where the Card Falls Short

This card is clearly geared towards Uber users; however, this card really isn’t the best option for frequent riders. First, the card only offers 2% cash back on Uber rides which seems low for a co-branded card. Further, it would be nice if the card gave you some sort of bonus if you elected to take the cash back in the form of Uber credits. There’s absolutely no reason for anyone to choose this option. So, at the end of the day, this card isn’t really the best option for Uber riders.

So why would Uber offer a card that doesn’t truly incentivize Uber usage? My sense is that Uber is using the card to gather data about where you eat and where you travel (the two largest cash back categories) since they already have the data about your Uber usage. Similarly, the $50 annual bonus also let’s them know about your online subscriptions and the cell phone protection gives them data on your cell phone provider since you have to pay your cell phone bill with the card in order to qualify for the insurance. They’ll likely use all of that data to enhance Uber, UberEATS, and potentially some other future services that may be part of their long-term corporate strategy. In other words, their offering you an extra cent or two per dollar in exchange for data about your purchase behaviors.

Better Alternatives

If you’re a frequent Uber user that’s looking for a card to reward you for those purchases, there are a few better cards out there for you.

Amex Platinum
Though this card only offers 1 point per dollar on Uber rides, the Amex Platinum offers $200 in Uber credits each year. (Important note here: You could redeem Amex Membership Rewards points for cash back just like the Uber credit card; however, the points carry extra value when you use them towards travel which isn’t an option with the Uber credit card. For example, I value Amex Membership Rewards points at approximately 2 cents per point towards travel which is about the same value as what the Uber credit card offers.)

Chase Sapphire Preferred
I recommended this card to almost anyone who travels in a recent post on my favorite credit cards. I value these points at slightly over 2 cents per point and you’ll earn 2x points on Uber purchases with this card. This card has a much more valuable sign-up bonus and the annual fee is waived the first year. The higher-end Chase Sapphire Reserve may also be a good option if you’re willing to take on the higher annual fee.

Citi Premier (There may be a 50k point sign-up bonus link out there somewhere. Citi changes their offers fairly frequently.)
The Citi Premier card recently enhanced their sign-up bonus and the card offers 3x points on Uber rides. I value Citi ThankYou points at about 1.5 cents each so this is a pretty solid return.

So Who Should Sign Up?

Despite the drawbacks, the Uber Visa credit card might be right for you. If you spend a lot of money eating out and you don’t intend to travel much, then I think this may be a great choice for you. However, if you have any intention of traveling, then there are numerous cards that are significantly more rewarding. Further, banks such as Chase have placed significant restrictions on the number of cards you can sign up for (Chase’s rule is known widely as the 5/24 rule) so you should seriously consider signing up for more valuable cards first.

This is also one of the better cards out there that don’t carry an annual fee so if you’re opposed to paying these fees, this is a solid option for you. Regardless, carrying a no-fee card can help build your credit score over time as the age of your accounts is one of the key measures in calculating your credit score. So if you sign up for this card, keep it open for a while, and pay your balance in full every month (another key factor in calculating your credit score), you will be helping your overall credit score.

In the end, do your research and determine what your objectives are with each new card that you sign up for. This card certainly isn’t for everyone, including frequent Uber users, but if you frequent dine at restaurants, don’t like paying annual fees, and don’t have strong ambitions to travel, then this card is a great option.

Disclaimer: I included referral links in this post. If you decide to apply for one of the cards, I’d appreciate it if you used these links to apply. I’ll earn some bonus points if you do.

    One Response

  1. Nice analysis and good insights with the data – they are all using the data, Uber just already has a lot of it…

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