Ride-sharing giant Uber and banking giant Barclays announced today at the Money 20/20 conference a partnership that will create the Uber Visa Card, a new credit card specifically designed to appeal to Uber's millions of riders. With no annual fee, a generous rewards program, and unique perks, the card could be a strong competitor in its segment.
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What is the Uber Visa card?
The Uber Visa Card is a co-branding partnership between ride-sharing platform Uber and Barclays that will be available nationwide starting Nov. 2, 2017. The card offer will be embedded in the Uber app, and once an application is approved, the card will be added to a customer's Uber wallet almost immediately (a physical card arrives about a week later).
The Uber Visa Card has no annual fee and comes with an assortment of benefits specifically designed for Uber riders.
Impressive perks, especially for a no-annual-fee credit card
The Uber Visa Card has a four-tier reward program. All four reward-earning rates are flat, meaning there are no rotating categories. Cardholders will earn:
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- 4% back on dining (including UberEATS)
- 3% back on hotel and airfare
- 2% back on online purchases (this includes Uber rides)
- 1% back on anything else
These rewards can be redeemed in a variety of ways, such as for cash back or for Uber rides directly through the Uber app.
The 4% back on dining stands out to me as a particularly generous rate. Other credit cards offer better rewards rates, but only sometimes. For example, The Discover it® - Cashback Match™ credit card offers 5% back on categories that change quarterly, and one of these each year is usually "restaurants." However, the Uber Visa Card's 4% rate is an industry best for restaurant rewards on a permanent basis.
Another unique perk is a $50 "subscription credit" after $5,000 in card spending each year. This can be applied to charges such as a Netflix or Amazon Prime membership.
Cardholders also get mobile phone insurance, with up to $600 in coverage for damage or theft, if they pay their phone bill with the Uber Visa Card.
In addition, the Uber Visa Card has no foreign transaction fees. This makes sense, as the Uber Visa Card is in essence a travel credit card, and most travel-oriented cards don't charge foreign transaction fees.
Is the Uber Visa Card a smart choice for you?
While there's no one-size-fits-all answer to the question "Is this credit card right for me?", the Uber Visa Card could certainly make sense for people who eat out frequently, take Uber rides often, or fly and stay at hotels frequently.
For frequent travelers, the Uber Visa Card's perks are on the lower end (although they're impressive considering there's no annual fee). Depending on how often you travel, how you tend to travel (air, rail, Uber), and what other rewards are important to you, you might want to compare the Uber Visa Card with some of the other top travel credit card deals available.
Uber and Barclays have not yet announced any type of 0% intro APR deal for either purchases or balance transfers. So, if this is important to you (for instance, if you have other credit card debt you'd like to consolidate), you may want to consider a balance transfer credit card or a card with a generous 0% intro APR offer for purchases.
The bottom line on the Uber Visa Card
The Uber Visa Card has generous rewards and unique perks that will almost certainly appeal to many Uber riders. While there's no credit card that's perfect for everyone, this card should appeal to consumers who want an attractive and permanent rewards program without an annual fee -- a rare combination.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Matthew Frankel has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon, Netflix, and Visa. The Motley Fool has a disclosure policy.