Nearly perfect Visa card = 1% cash back, no annual fee, full REI patronage refund
Written: Jul 25 '04 (Updated Jan 23 '05)
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Pros: No annual fee, easy 1% cash back on all purchases, full REI patronage refund.
Cons: Like most other cards, high penalty, service, foreign currency transaction fees. No platinum card.
The Bottom Line: This is a perfect every day credit card featuring 1% cash back on all purchases, no annual fee, and a full REI patronage refund.
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| jsquarejj's Full Review: REI VISA Card (US Bank) |
This card is one of the best kept secrets in the credit card industry.
I’m one of those people who likes things simple and easy. I hate “reward cards” that give me airline miles that I may or may not be able to use, free long distance minutes with bizarre restrictions, or strange gifts. And I hate to jump through hoops or spend hours on hold trying to collect my rewards. Give me cash, and make it easy to collect. I also refuse to pay an annual fee for a credit card, no matter what the reward may be. Furthermore, I pay off my credit card balance every month, so a low interest rate is irrelevant.
Of course, lots of people have told me to get a Discover Card. Unfortunately, Discover isn’t accepted at nearly as many places as Visa. To my great satisfaction, I’ve found the perfect rewards card for me: the REI Visa Card issued by US Bank.
What the Heck is REI?
For those of you who haven’t heard of it, REI is Recreational Equipment Incorporated, the Seattle-based retailer of outdoor and travel equipment and clothing with stores mostly in the West, a mail order catalog and a great web store at www.rei.com. REI is different from most retailers in that it is run on the cooperative principle, with most of the profits annually returned to its members in the form of a patronage refund. For many years, REI has been returning 10% on regular purchases. So, if you spend $500 there, you get back $50 at the end of the year. A lifetime membership costs $15, and you can join on the web or at one of the stores.
Well, that 10% dividend isn’t exactly the whole story because it only applied to purchases by cash or check. Because of the cost of doing business by credit card, REI paid a lower refund for credit card purchases—around 7-8%
Then, several years ago, REI joined with Seafirst Bank of Seattle to issue its own branded Visa card, with a full patronage refund for members who used it for purchases. That made the new card an instant hit, because every REI member wanted one. The 1% rebate on non-REI purchases was just icing on the cake. Later on, Seafirst merged with Bank of America, which became the card issuer. Finally, at the beginning of 2002, B of A ended its Visa servicing relationship with REI, and US Bank took over the REI Visa Card. As a gesture of good will, REI gave a $25 gift voucher to everyone who switched to the US Bank REI Visa Card rather than stick with a generic Bank of America Visa Card (with no REI related benefits and elimination of the 1% cash back after six months).
Click here to read my review of the REI web site.
Pros
The US Bank REI Visa card has no annual fee, pays 1% cash back on all non-REI purchases, and pays a full patronage refund on REI purchases. The 1% cash back starts with the first dollar of spending, unlike some other cards that don't pay the full amount until you reach a certain minimum.
The current interest rate on purchases and balance transfers is moderate, 11.99% as of July 2004, and they may offer a lower introductory rate for new cardmembers.
US Bank has a fast, easy-to-use web site for its bank and credit card customers.
The classic card provides up to $100,000 of travel accident insurance, and the gold card ups this to $250,000.
The statement is easy to read, provides clear mail and telephone contact information and provides a monthly and year-to-date summary of your rebate amount.
Cons
Like the majority of credit card issuers, US Bank charges a fee on foreign currency transactions, for which it performs no actual service. Whenever you make a foreign currency charge, the Visa association translates the charge to dollars and adds on a 1% currency exchange charge (a reasonable charge for the real service of exchanging currency). US Bank then adds a 2% charge on top of that just because it can. With most credit card issuers, this fee is difficult to detect on your bill because the line item for the foreign charge shows the original foreign currency amount and the dollar amount you actually pay, but does not itemize the exchange rate separately from the extra fees. At least the US Bank REI Visa literature is completely up front about this charge. Now, if they just stopped charging the extra 2%, this card would be perfect.
Because of this practice, I use a different Visa card when I travel outside the USA. To find out about this card, click Visa card with no foreign usage charges.
For a detailed explanation of this practice, and a list of card issuers that do and do not charge the extra fee, see my epinion Credit card issuers dirty little billing secret: GREED.
As with most credit cards, the cash advance fee is outrageous (3% with a $3 minimum), and the interest rate is an outrageous 19.99%. I always use a no fee debit card for cash advances, so this is immaterial to me. Furthermore, all credit cards start charging interest immediately when you get a cash advance, so you probably shouldn't be using them for this purpose anyway.
The penalty fees are also very high but comparable to other issuers.
At the moment, they do not offer a platinum level card.
Refund Mechanics
Around the middle of February, REI sends you a voucher that combines your REI patronage refund and your REI Visa card rebate. You can use it immediately for purchases at REI or its web site, or you can wait until July 1 to redeem it for cash or check. If you elect to redeem it for cash or check, you can tell REI anytime by mail, telephone or web site, and you will get a check in the mail shortly after July 1. You must collect your rebate before December 31.
I usually wait until March or April and take the dividend notice to my local REI store to do my summer clothing and equipment shopping. Having the extra “cash” is great!
Customer Service
So far, my only experience with customer service has been to inform US Bank's fraud protection unit that I was going on an overseas trip on which I might use my REI credit card. After navigating the voice menu, I was put on hold for less than two minutes before talking to someone who handled my notification in a quick, efficient and friendly manner.
Useful Links
Before you apply for a credit card or loan, get your credit report and FICO score at myFICO.com.
Click here to read my review of the REI web site.
Recommended:
Yes
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Epinions.com ID:
jsquarejj
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Member: Jim J
Location: Santa Cruz, California
Reviews written: 190
Trusted by: 78 members
About Me:
#7 in Personal Finance, #14 in Travel. My goal? Saving you money.
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