2017 AAA Credit Card Review – WalletHub Editors
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The Verdict: The AAA Member Rewards Visa Credit Card is a solid option for AAA members with good or excellent credit who always pay their monthly bills in full and would like to earn rewards on everyday expenses. Although its terms won’t necessarily wow you, there is a lot to like on the rewards front, particularly if you spend a lot on travel, gas, groceries and AAA services. And what AAA member doesn’t?
The rewards package starts with an easily attainable $100 initial bonus and continues with the point equivalent of 3% cash back on all travel and AAA purchases. That’s supplemented by 2% back in core everyday expense categories, 1% back on all other purchases and an extra bonus for cardholders with a qualifying Bank of America deposit account and/or a Merrill Lynch investment account. The card doesn’t charge an annual fee, either.
But the benefits largely end there. While the AAA Rewards Visa does offer a 0% introductory interest rate for balance transfers, which lasts the first 12 months, it also charges a 3% balance-transfer fee and a regular APR that can be as high as 23.24%, which effectively ruin the offer.
- $100 Initial Bonus: All you have to do to score $100, in the form of a statement credit, is charge at least $250 to your card within 90 days of account opening. That’s less than $3 a day. Enjoy!
Up To 3 Points Per $1 Spent: Every $1 that you spend on AAA services and travel-related expenses earns you 3 points, which equates to 3% cash back when you redeem for a statement credit. And every $1 that you spend at grocery stores, gas stations and drug stores earns 2 points (2% cash back), while all other purchases yield 1 point (1% cash back) per $1 spent.
Considering that the average rewards card offers about 1.01 points per $1 spent, exactly how valuable the AAA Card proves to be will ultimately depend on how much you spend in those bonus categories, especially AAA and travel expenses.
- No Annual Fee: All else being equal, it’s always better to avoid an annual fee than to pay one, and this particular feature will save you more than $16 relative to the average credit card. Without a recurring expense to worry about, you’ll also have the freedom not to use your card if you wish and the luxury of keeping your account open longer than you might otherwise, which helps to boost your credit score.
- 0% For 12 Months On Balance Transfers: This aspect of the offer is decent in its own right, so it has to be considered a highlight. But it’s ruined by a corresponding transfer fee, which you can learn more about below.
- 3% Balance-Transfer Fee: Unfortunately, the best part of the AAA Card’s financing offer — 0% on balance transfers for the first year — is blemished by one of the worst: a 3% balance-transfer fee. Given the availability of offers with longer interest-free intro periods and/or no transfer fees, that 3% charge should be considered a deal breaker. But if you’re not entirely convinced, you can use our balance-transfer calculator to see exactly how much transferring a balance to the AAA Visa will cost you.
Potential For A Very High Interest Rate: Like many other credit cards, the AAA Visa’s interest rate is advertised as a range — 13.24% to 23.24% — with the specifics to be determined based on your overall creditworthiness. If you have pristine credit and thus wind up qualifying for the low end of that rate, your APR will be similar to that of the average person with excellent credit: 13.08%. But it’s far more likely that applicants will be assigned a rate more befitting someone with fair credit.
The moral of the story: Always pay your AAA credit-card bill in full. No matter what rate you’re ultimately assigned, carrying a balance from month to month will still cost you big-time.
- 3% Foreign-Transaction Fee: The card is named after the American Automobile Association, so maybe its 3% surcharge on purchases processed outside the U.S. makes sense. But that still doesn’t make it a good thing. In fact, this fee is above the 2.05% average for the credit-card market on the whole.
- Minimum Redemption Requirements: AAA Member Rewards points are worth $0.01 apiece when redeemed for cash or cash-back equivalents, including a statement credit, bank-account deposit, check, gift card or AAA voucher. You need at least 5,000 points to redeem for cash and AAA vouchers, which means you unfortunately can’t cash in until you have at least $50 in points saved up. Your other option is to redeem for airfare, and you only need a minimum of 2,500 points for that.
Other Things To Consider
AAA Membership Not Required: Although this card’s application includes a field for your AAA membership number, filling it in is optional. You don’t actually have to be a AAA member to apply for this card, which is a good thing considering that many nonmembers would love to earn 3% back on travel and 2% on gas, groceries and drug-store buys.
But with that being said, most people are unlikely to gravitate to AAA-branded plastic unless they at least have an interest in joining, and this card really shines in the hands of a AAA member. So if you’re wondering about the cost of membership, you can join AAA for as little as $52 per year.
25% To 75% Bonus For Preferred Rewards Members: If you have at least $20,000 in total balances in a Bank of America bank account and/or Merrill Lynch investment account, you will qualify for Bank of America’s Preferred Rewards program and your credit-card rewards will become more valuable. Here are the details:
Combined Balance Rewards Bonus $0 to $19,999 None $20,000 to $49,999 25% $50,000 to $99,999 50% $100,000+ 75%
All you have to do to claim the bonus is redeem your earnings for a deposit into your qualifying bank or investment account.
- Points Expiration/Forfeiture: Points expire five years after the date that you earn them, and you’ll lose any unredeemed earnings sooner than that if your account is closed.
Compared To The Competition
Is the AAA Membership Rewards Visa the right credit card for you? A lot ultimately depends on your specific needs, not to mention what other cards you might already have. But we’ll help you decide by comparing the AAA Card to a handful of popular alternatives — some known for rewards, others for financing. We evaluated each offer in seven important categories that each speak to different consumer concerns and collectively drive the card’s overall value. You can find the results in the following table.
AAA Membership Rewards
Citi Double Cash
Chase Freedom Unlimited
Barclaycard Arrival Plus
Citi Diamond Preferred
|Annual Fee||$0||$0||$0||$89 ($0 first year)||$0||$0|
|Initial Bonus||$100 for spending at least $250 in the first 90 days||None||$150 for spending at least $500 in the first three months||40,000 miles for spending at least $3,000 in the first 90 days||None||None|
|Ongoing Rewards||3 points per $1 spent on AAA and travel purchases
2 points per $1 at gas stations, grocery stores and drug stores
1 point per $1 everywhere else
|1% back on all purchases
1% back on all corresponding monthly bill payments
|1.5% back on all purchases||2 points per $1 spent on all purchases
(5% travel-redemption bonus)
|Intro Financing||0% on balance transfers for 12 months||0% on balance transfers for 18 months||0% on purchases & balance transfers for 15 months||0% on balance transfers for 12 months||0% on purchases and balance transfers for 21 months||0% on purchases and balance transfers for 15 months|
|Balance-Transfer Fee||3%||3%||5%||3%||3%||None (first 60 days only; 5% after)|
|Regular APR||13.24% to 23.24%||13.24% to 23.24%||14.24% to 23.24%||16.24% to 20.24%||12.24% to 22.24%||13.24% to 23.24%|
|Editors’ Rating||4 Stars||5 Stars||4.5 Stars||5 Stars||5 Stars||5 Stars|
Barclaycard Arrival Plus Chase Slate
*Earnings are based on the average person’s $28,523 in credit-card-eligible annual expenses, according to data from the U.S. Bureau of Labor Statistics. For the AAA Card, we assumed that half of the individual’s annual utility expenses were AAA-related.