Uber is significantly changing the cash-back rewards structure of its credit card. The popular card will now have lower reward rates for dining out and increased rewards for Uber ridesharing and UberEats purchases, shifting its value as a top-tier general-use dining and entertaining card toward one that offers the most value to those who use the card parent’s service platforms.
What is changing about the Uber Visa Card
- The cash-back rate for dining purchases will drop from 4% to 3%
- The 2% cash-back rate for online purchases, including video streaming and music services, will drop to 1%.
- Rewards for Uber (formerly 2%) and UberEats (formerly 4%) will jump to 5%
- All other purchases will earn 1% cash back.
- Instead of cash-back being applied in actual cash or statement credits, it will now be credited back as Uber cash, for use in the company’s platforms.
- The card’s name is changing, too. What was the Uber Visa will be the Uber Credit Card.
Two critical things are not changing about the Uber card: The cash-back rates for airfare and hotels will remain at 3%, and the card will still have no annual fee.
Uber credit card changes: What do they mean?
The old Uber Visa credit card was a favored card for many cash-back card lovers. With these changes, it will essentially go from elite to comparable with other well-regarded options targeted at people who prefer rewards for dining and entertainment purchases. That hardly means the Uber Credit Card has lost its value — it’s just changed.
Users who frequent the company’s platforms will be greatly rewarded by the dramatic increases in cash-back rates on Uber and UberEats. Meanwhile, the credit card still has competitive rewards rates for dining, hotels and airfare. Uber and Barclays, the card’s issuer, are no doubt betting that it won’t just be regular Uber users who are excited about this shift, but that mid-tier users will up their usage of Uber and UberEats, as well. And by switching the rewards from standard cash-back to Uber Cash, the company is encouraging those users to keep earning those rewards by rewarding use of those platforms.
When do these changes start?
New users can apply for the updated Uber Credit Card now, while existing users will have their cards transitioned in the first half of 2020, Margaret-Ann Seger, Uber’s product manager for payments, said onstage at the Money 2020 conference this week.
“People will be transitioned, they will get 180 days notice,” Seger said. “You can cash out all of your rewards with a statement credit, no problem. And then you’ll start earning Uber Cash once you’re transitioned.”
Current cardholders will be notified of the pending changes to their accounts by email soon, if they have not been already. Then they will be transitioned to the new card platform either in one of two dates next year, either late February or late April of next year, Seger said.
Should I get the new Uber Credit Card?
Whether or not you should get any credit card depends on how it fits into your budget and your spending habits. With no annual fee, 3% cash-back on dining, airfare and hotel purchases, this is still a valuable card even before taking into account the 5% cash-back on Uber and UberEats purchases. That said, restricting that cash-back as Uber Cash means this card may be best suited for people who like to spend in those categories and who also love to use Uber for its various services.
What are the competitors for the new Uber Credit Card?
Some cardholders will look for alternatives now that Uber has decreased the cash-back perks of its card and increased its ridesharing and meal-ordering benefits through Uber and UberEats. After all, with 4% cash back on dining and 2% cash back for online purchases and streaming services, the old Uber Visa was very appealing to entertainment-lovers. And it still will be, but it will be more on-par with several competitors for dining and entertainment rewards.
But there are still plenty of other good cards out there that reward users for eating out.
Other cards that reward customers with high rewards for dining purchases
- Capital One Savor: 4% cash back on dining and entertainment purchases
- American Express Gold: 4X points on dining purchases
- Capital One SavorOne: 3% cash back on dining and entertainment purchases
- Chase Sapphire Reserve: 3X points on dining purchases
- Wells Fargo Propel American Express: 3X points on eating out and ordering in
- Discover it: 5% cash back on categories that rotate each quarter; past categories have included restaurant purchases
- Citi Double Cash: 2% cash back on all categories, and the categories don’t rotate
And while the Uber Credit Card will offer generous benefits to regular Uber ridesharing users, it’s not the only card that offers good value for ridesharing.
- Wells Fargo Propel American Express: 3X points on ridesharing and streaming services
- American Express Platinum: $200 annual credit for Uber rides, and complimentary Uber VIP status
Will my credit score be affected if I cancel my Uber credit card?
If you want to close your Uber Visa before it switches to becoming the Uber Credit Card, it is possible to do so without hurting your credit.
Whether or not this affects your credit score depends on your overall credit picture. Generally speaking, if you have other credit cards with high, unpaid balances, closing out this credit card could negatively impact your credit rating. That’s because the lower the ratio of your total balances to your total credit limit, the better your credit will be viewed by lenders. So, if your other cards have low balances or no balance, canceling your Uber Visa likely won’t hurt your credit rating.
It’s worth noting, too, that there is value to keeping the Uber card open even if you don’t intend on using it, because keeping a card with a zero balance will help that balance-to-limit ratio, known as your credit utilization ratio. But if you do want to cancel it, it’s fairly simple to do so.
How to cancel your Uber Visa credit card:
- First, you’ll need to pay off the remaining balance.
- Next, you’ll want to redeem any rewards you haven’t utilized yet.
- From there, you can call Barclays customer service to confirm the card’s balance is at zero.
- Even if you paid off your balance online, confirm that no interest charges on the previous balance were assessed since you paid off the balance.
- Finally, request the card be cancelled and ask for written confirmation it has been cancelled.