REVIEW SUMMARY: Money expert Clark Howard has long given his endorsement to the Citi Double Cash credit card due to its 2% cash back plan, but the Alliant Visa Signature Card may provide an intriguing alternative in the cash back credit card market.
Alliant Credit Union’s bold unlimited cash back offer caught our attention. For the first 12 months, the Alliant Visa Signature Card offers 3% cash back on all purchases. After that, the cash back rate drops to 2.5% moving forward. That sounds pretty good, so we decided to do a little digging to see if this offer is something for Clark readers to seriously consider.
In this article, we’re going to run through the perks offered with the Alliant Visa Signature Card. We’ll also explain the steps you’ll need to take to become eligible for the card, identify the consumers best served by this card, and compare it to the popular Citi Double Cash card.
Table of Contents:
- How to Become Eligible for the Alliant Visa Signature Card
- Spending Scenarios: Alliant Visa Vs. Citi Double Cash
- Final Thoughts: What Type of Consumer Should Consider Signing Up For The Alliant Visa Signature Card
Alliant Visa Signature Card: The Perks and Specs
First, let’s address the elephant in the room: There is an annual fee attached to this card.
That can be a nonstarter for some when choosing a credit card. Depending on your financial situation, it may be worth paying Alliant’s $99 annual fee in the long run. The credit union is even waiving the fee for the first year of card membership at the moment.
According to Alliant, this fee is charged on the one-year anniversary of opening your card and then once a year moving forward.
Annual Fee: $99 (waived for the first year)
Cash Back Incentives
Next, let’s dig into the cash back incentives. This is the major reason you should be considering this card, as it lacks any major promotional deals or low introductory APRs.
For the first year of card membership Alliant offers 3% cash back. For year two and beyond, that cash back rate drops to 2.5%. That’s still pretty solid. We’ll be exploring the implications of a 2.5% cash back setup a little later in the article.
There is no limit to the amount of cash back earning you can accumulate, which is a big deal. There are also no stipulations, like some other cards may have, that require that you spend the money on categories like food, gas, groceries, etc. If you spend it, they count it.
Per Alliant, there are two ways you can receive your cash back incentives each month: “You can choose to receive cash back from your Alliant credit card via a credit card statement credit (appearing within one billing cycle) or as a deposit into your Alliant checking or savings.”
Annual Percentage Rate (APR)
The Alliant Visa Signature Card comes with a variable annual percentage rate, meaning that the interest rate that is charged on any balance you carry can change periodically.
Actual rates offered vary based on things like your credit score. So, you’re going to have to apply before receiving your actual APR offer.
As for APR changes once you get signed up, Alliant offers the following tidbit: “The APR on new purchases and balance transfers can increase or decrease quarterly. The rate is determined by adding the highest U.S. Prime Rate published in The Wall Street Journal during the last two business days of the previous quarter, plus a margin of 6.99% – 9.99%.”
As Clark Howard would tell you, using your credit card for purchases offers perks and protections that a debit card cannot. The Alliant Visa Signature Card has a nice array of perks that you may be able to take advantage of, including:
- No foreign transaction fees
- Personal identity protection
- $0 fraud guarantee from Visa
- $250,000 in travel accident coverage
- Rental car collision coverage
- Roadside Assistance
- Apple Pay and Google Pay compatibility
You can read more on the specifics of those perks on the card's official website. Here's an Alliant Visa Signature Card promotional video that highlights some of the card perks:
We’ve covered the perks, but there also are potential financial pitfalls with credit card membership. This card is no different in that regard.
Beyond the $99 annual fee, here are some other fees you may encounter with the Alliant Visa Signature Card:
- Late Payment Fee: Up to $27
- Returned Payment Fee: Up to $27
- Balance Transfer Fee: 3% of the amount of each transfer
- Cash Advance Fee: $10 or 3% of the amount (whichever is greater)
Of course, if you adhere to the rule of only spending what you can afford and proceed with paying your bill off on time each month, these fees should not hinder your ability to get good use out of the perks.
How to Become Eligible for the Alliant Visa Signature Card
Given that this credit card is offered by a credit union, you must become a member of Alliant Federal Credit Union to be eligible to apply.
For the majority of Clark readers who are interested, the most practical option for joining the credit union is going to involve making a $5 donation to the nonprofit Foster Care To Success. Alliant indicates that it will make the donation on the prospective member's behalf, seemingly simplifying that process.
Per Alliant's membership qualification guidelines, one of the following will qualify you for membership automatically:
- Employment at one of Alliant's partner businesses
- Having a partner or direct family member who is an Alliant member
- Living or working in the Chicago area, where Alliant is headquartered
If you meet one of the criteria above, you should be able to forgo the donation for membership. I would check with Alliant to ensure eligibility before moving too far into the application process.
Spending Scenarios: Alliant Visa Vs. Citi Double Cash
With the cash back numbers being thrown around, it’s easy to see how the Alliant Signature Visa Card could benefit a high-volume monthly spender.
But does it serve you better than the popular Citi Double Cash credit card? Let’s find out.
First, let's do a quick rundown of what Citi Double Cash offers:
- No annual fee
- 2% cash back on all purchases (1% when you purchase, $1 when you pay the balance on that purchase)
- No purchase categories
- No cap on cash back
Now, let’s make some assumptions and issue some reminders for the sake of this comparison:
- Set aside APR for this exercise. We're going to assume the bill is paid off each month.
- Year 1 of Alliant and Year 2 (and beyond) of Alliant will be considered separate due to the change in cash back rate (3% for Year 1 and 2.5% for Year 2 and beyond).
- The Alliant Year 2 and beyond column will reflect a total after deducting the $99 annual fee. Remember, Citi Double Cash does not have an annual fee and Alliant waives its fee in Year 1.
Given those parameters, here’s a breakdown of how the annual cash back payouts would look using $500 monthly spending increments:
So what conclusions can be drawn from this comparison chart?
First, it’s pretty clear that Year 1 of the Alliant Visa Signature Card is going to be pretty fantastic. The 3% cash back and no annual fee really makes a difference. But once you clear that introductory period, things become less clear when trying to decide between it and the Citi Double Cash.
By the time Year 2 rolls around on the Alliant card, some readers may actually be better off with the Citi Double Cash card. Specifically, those who spend under $1,500 per month on their credit card are likely to see better results from Citi Double Cash, even though it has a lower cash back percentage (2% vs. 2.5%). Remember, you’ll need to account for the $99 annual fee when assessing the Alliant cash back total after Year 1.
To me, the monthly spending line where it starts making sense to consider the Alliant card over the Citi card is near the $2,000 threshold. If you already have the Citi Double Cash card, the threshold may actually need to be higher than that once you consider the ramifications of adding another credit card to your portfolio.
If you have neither of these cards, the Year 1 benefits of the Alliant card are tempting.
Final Thoughts: What Type of Consumer Should Consider Signing Up for the Alliant Visa Signature Card
Alliant is not shy about what type of consumer they’re looking for with this card: “High spenders with excellent credit.”
But what type of consumer should be seeking this card out? I think this card makes sense for the high-volume monthly spender who is looking to use a credit card in place of their debit card.
Consumers looking to carry a monthly balance may not like the APR they pay on this card, and the lack of an introductory APR makes it hard to use this card as a short-term financing option. Likewise, the lack of a promotional rate for a balance transfer doesn’t make this a very inviting option for someone looking to move credit card debt around.
Bottom line: If you're spending more than $2,000 monthly, the Alliant Visa Signature Card is a strong option. If not, this card may not be for you.
The post Alliant Visa Signature Card: Get 3% Cash Back on All Purchases for a Year appeared first on Clark Howard.