Millennial bargain hunters have a new feature-rich credit card to rack up rewards with – no annual fee required.
The new Uber Visa credit card issued by Barclaycard doesn’t offer the biggest sign-up bonus or the chicest travel benefits. But unlike some of its pricier competitors, it offers some of the richest rewards you can get on a travel card, including an unprecedented 4 percent back on dining, 3 percent back on travel and 2 percent back on online purchases. It also waives foreign transaction fees, making it a nice option for packing on a trip abroad.
The card offers three possible APRs: 15.99 percent, 21.74 percent or 24.74 percent.*
The Uber card seems tailor-made for experience-seeking, younger millennials, who have earned a reputation for reserving their cash for restaurant meals and globe-trotting vacations rather than mortgage payments and traditional brick-and-mortar retail.
A June 2017 Bankrate survey, for example, found that millennials often prefer restaurant meals and takeout to cooking at home and also tend to spend a significant amount of their budget on coffee drinks and happy hour.
Millennials also tend to travel more than other generations. For example, a September 2017 survey by Expedia found that the typical millennial traveler treks around at least 35 days out of the year. In addition, millennials tend to do a lot of shopping online.
As a millennial myself, the new Uber card seems like a steal – particularly if you use it as a payment tool. Unlike many of my friends, I rarely use ride-sharing apps such as Uber to get around. But the card’s other benefits are so enticing that even non-Uber fans may be drawn to it.
Since I buy most of my clothes from online outlets, such as Modcloth and thredUP, the double bonus on online purchases is especially attractive.
The card’s 3 percent bonus on travel competes with my husband’s 3-point bonus from the Chase Sapphire Reserve card (which, unlike the Uber card, charges a three-figure annual fee), and I haven’t seen any other card that offers such a large bonus on dining out. For our young family of three, that perk alone could make the card worth an application.
I also like the Uber card’s unusually generous insurance benefit for high-end mobile phones. To get the benefit – which covers up to $600 in damage or theft protection – you just need to pay your monthly phone bill with the Uber card.
Another perk that seems a perfect match for convenience-seeking millennials: Cardholders can easily redeem rewards for Uber and UberEats credits in the Uber app, or opt for gift cards or cash back. As my night-owl friends can attest, UberEats is a popular service with millennials who like being able to order food at 3 a.m.
The card’s sign-up bonus isn’t nearly as competitive. Cardholders get just $100 back after spending $500 in the card’s first three months. But that’s a small drawback compared to the rewards.
Credit card experts say that the Uber card’s millennial-friendly perks could help Barclaycard win over a value-conscious generation that’s famously wary of high-interest credit.
“Many in this segment of the population have eschewed debt/card usage,” credit card expert R.K. Hammer said in an email. “So, it is not surprising at all that experts in co-branded cards such as Barclays – among others – are focusing some new attention on them.”
A number of other card companies have also launched cards in recent months that appear to be aimed squarely at up-and-coming cardholders who want to take advantage of deals, but don’t want to pay a high annual fee.
American Express and Chase, for example, both announced rewards-heavy airline-branded credit cards this summer that don’t charge annual fees. The United TravelBank card* from Chase offers a generous 1.5 percent cash-back rate on general purchases, as well as 2 percent cash back on United purchases. Meanwhile, the Blue Delta SkyMiles credit card* from American Express offers a 2-miles-per-dollar bonus on restaurants and Delta purchases.
According to Hammer, card companies are increasingly focusing on younger, less affluent cardholders, in part, because they are an underserved group.
“It is exceedingly difficult for card issuers to book another million new card accounts, compared to the last million booked,” wrote Hammer. “They are, therefore, always looking for underutilized segments of society to market to, such as millennials.”
* The content on this page is accurate as of the posting date. Please see the bank’s website for the most current version of the offer.
See related: Millennials reap latest perks in credit card rewards wars, Millennials answer Reserve’s 100,000-point question, Millennial dining trends eschew traditional ‘VIP’ experiences