Advanced Personal Finance

Review: USAA Cash Rewards and Total Rewards

After mentioning the USAA Total Rewards credit card program I converted my card to a few weeks ago, I got a few comments and inquiries about the program. People seem to be wondering about the details and which one is better, so here’s my comparison of the programs.

USAA has two rewards programs for their cards - Cash Rewards and Total Rewards. Cash Rewards is pretty straight-forward. You get a small percentage of what you spend back at the end of the year. Total Rewards is USAA’s version of a ‘points’ reward system.

Cash Rewards

This program is simple. Each year, USAA tallies up what you’ve spent on the card and kicks you back cash. Here’s the accrual schedule

$1 - $2,000 spent returns 0.35%
$2,001 - $4,000 spent returns 0.75%
$4,001 - $15,000 spent returns 1%
$15,001 and up spent returns 1.25%

The ‘year’ runs from the February statement to the following January. The cash reward shows up as a credit to your January bill.

Total Rewards

This is USAA’s ‘points’ system similar to Citi’s Thank You Network. For every dollar spent, you get one point. You then spend those points to get gift certificates, merchandise, airline tickets, or cash sent to a charity of your choice. You can also redeem points, strangely, for cash.

The redemption formula is simple. For every 3,000 points, you get a $25 equivalent in gift certificates, cash, or charity. The airline value is on a slightly different schedule, and on a per-point basis, a slightly better deal.

Which is better?

The answer to the question ‘which is better’ really comes down to an analysis of how much you’re going to spend on the card in a year. The way it works out, if you spend anything less than $14,300 per year (that’s me), you’re better off with the Total Rewards system. Total rewards is what I use. If you make purchases worth more than $14,300, it makes sense to use Cash Rewards.