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Ally Bank, a constant presence on Money’s annual Best Bank rankings, is entering the already crowded cash back credit card space.
The new card, called Ally CashBack, has a relatively simple rewards breakdown: 2% cash back on purchases from gas stations and grocery stores, and 1% back on all other purchases. Your account has to be in good standing to earn unlimited cash back.
Cardholders will also earn a $100 signup bonus after spending $500 in the first three statement cycles – again, as long as your account is in good standing. According to the card’s terms and conditions, good standing means that your account is open and active, not in default, and that you are not a corporation.
There’s no annual fee, and a there’s a 12 month 0% introductory interest period. The APR ranges from 13.24% to 23.24%, based on creditworthiness, and you’re on the hook for up to $35 for late payments.
Ally’s new product follows a similar new entrant into the cash back space: the Chase Freedom Unlimited, whose cardholders earn 1.5% cash back on all purchases and enjoy a $150 signup bonus.
So should you sign up for Ally’s new card?
Not necessarily. There are other cards that provide better rewards – like Money Best Credit Card, the Citi Double Cash, which offers 2% back on all purchases for cardholders. Other products, like the Freedom Unlimited mentioned above and the Capital One QuickSilver, give you 1.5% back on everything, rather than a tiered approach.
American Express Blue Cash Preferred cardholders earn 6% back on the fist $6,000 spent at grocery stores, plus 3% back at gas stations and certain department stores. There’s a $150 sign-up bonus, which helps ameliorate the $75 annual fee.
Nevertheless, the Ally card provides another option for cardholders looking for another cash back product. It might be worth signing up for the card simply to enjoy the $100 bonus, since there’s no annual fee to worry about. Plus the card uses the Visa platform, which is more widely accepted than American Express.