Verizon just launched the Verizon Visa Card. With rewards of up to 4% and no annual fee, it appears at first glance to be an excellent cash back credit card. Digging into the fine print, however, reveals something else, as we explain in this Verizon Visa Card review.
Today we are reviewing the Verizon Visa card. I just learned about this in an email from Verizon. We have our cell phones through Verizon. We also have Verizon FIOS. So I get their marketing emails, and I got an email this morning about the Verizon Visa card. And it initially had some appeal with some of the rewards it was offering.
First we’ll look at the rewards. Then we’ll see if the card is worth carrying in your wallet.
Verizon Visa Card Rewards
The card offers a tiered rewards structure:
- 4% rewards on groceries and gas purchases
- 3% on restaurants including takeout
- 2% on Verizon purchases
- 1% on all other purchases
My initial reaction was that’s actually not not too bad. As I dug into the details though, I’ve become less enamored with this card. I want to explain why. First let’s take a closer look at the rewards.
4% on Gas
Earning 4% rewards on gas purchases is very competitive. It compares favorably with the Costco Visa credit card, which also pays 4% on gas. The downside to the Costco card is you have to wait an entire year to get your rewards. They only issue them once a year around February.
The downside in my view is it for most people, we don’t spend a ton of money on gas. Unless you drive a lot, it’s 4% on a relatively small amount of money. For example, if you spend $100 a month you’ll earn $4 a month in rewards (not cash, by the way, but Verizon Dollars. We’ll come back to that in a minute). Still 4% on gas is quite good.
4% on Groceries
The 4% on groceries is also quite good, but not the best. In fact, there are at least two credit cards that offer high rewards on groceries.
First up is the Blue Cash Preferred card from American Express. Blue Cash Preferred pays 6% cash back on groceries, but there is a annual fee on that card and the 6% is capped to $6,000 spending a year.
Second, and the card we use a lot, is the Amazon Prime Visa. It pays 5% cash back at Whole Foods and doesn’t charge an annual fee. Of course, not everyone shops at Whole Foods. In our case, there happens to be one right down the street. And there’s spending cap on the rewards.
The bottom line is that for most people, you’re probably better off with the Blue Cash Preferred card, even factoring in the annual fee. So 4% on groceries is not bad, but it’s also note the best.
3% on Restaurants and Takeout
3% on restaurants is pretty common, actually. And for us, I would prefer the Chase Sapphire reserve card because not only do you get three x points, but then when you use them for travel through chase ultimate rewards, you get a 50% bonus. So you’re effectively getting four and a half percent.
2% on Verizon Purchases
Perhaps the best selling point of the cards is the 2% reward rate on Verizon purchases. In theory you won’t find a better deal because it’s a Verizon branded credit card. That said, you can earn 2.5% cash back from the Alliant Cashback Signature Visa. It’s a card I’ve carried for almost a year, and the cash back rewards are one of the best.
In addition, you have to ask just how much you spend at Verizon? If it’s say $100 a month, this 2% reward rate is worth just 2 Verizon Dollars a month. And that brings us to my biggest concern with this card.
The rewards are not paid in cash or even a statement credit. They are paid in “Verizon Dollars.” What?!!
I want cash. I don’t want Verizon dollars. So what are Verizon Dollars? To answer that question, you have to dig into the FAQs on the card. First, we know they aren’t cash:
Verizon Dollars have no cash value and are issued for reward purposes only and cannot be purchased, sold, transferred, redeemed for cash or Verizon gift cards, or used for security deposits for Verizon Wireless or Verizon Fios account services.The Verizon Visa® Credit Card and The Verizon Visa Signature® Credit Card Rewards Program Terms and Conditions
So what can you use Verizon Dollars for? According to the FAQ, they can be used on the following:
- The payment of a Verizon Wireless bill
- The payment of a Verizon Fios bill (but only online)
- The purchase of a device, including the use of Verizon Dollars toward the down payment or buyout of a device payment agreement.
- The payment of a remaining balance on a device payment agreement for a wireless device eligible for an annual upgrade.
- The purchase of an accessory
For me this rules out the card. I don’t want to earn Verizon Dollars with limited uses when I can earn equal or better rewards from other cards in cash or travel. So what are these better cards?
Compare Verizon Visa Card With Other Options
There are several cards that are a better choice than the Verizon Visa Card:
- Alliant Cashback Signature Visa–2.5% cash back on up to $10,000 a month in spending. Does come with an annual fee.
- Chase Sapphire Preferred Card–3% Chase Ultimate Rewards points on travel and restaurants redeemable for travel with a 50% bonus.
- Amazon Prime Visa Card–5% cash back at Amazon and Whole Foods. No annual fee, but requires an Amazon Prime membership.
- Blue Cash Preferred–6% cash back on groceries up to $6,000 in spend per year. Annual fee does apply.
Additional Terms, Conditions & Features
You must be a Verizon Wireless customer to get the card. Specifically, you must be an account owner or account manager with 10 phone lines or less on the account. In addition to no annual fee, there’s also no foreign transaction fees.
New Card Holder Offer: You can get up to a $100 credit applied to your Verizon wireless bill over the first 24 months. For those not interested in doing the math, it comes out to a credit of $4.17 a month for two years.
The interest rates are high, which is common with co-branded credit cards. If you plan to carry a balance from month to month, this card is not for you.
Verizon Visa Card Rating
Verizon Visa Card
The no annual fee and pays high rewards, but the rewards come in the form of Verizon Dollars with limited use.
So at the end of the day, I was pretty excited about this card. I think now it’s fair at best. You might use it if you’re a big Verizon spender and want the 2% back on Verizon purchases. But even then you have better alternatives with other cash back credit cards.