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The Alliant Cashback Visa® Signature Credit Card has put the kibosh on its eye-popping introductory rewards rate and is imposing a limit on its formerly unlimited cash back.
This week, the issuer made some adjustments to the card that could leave its biggest spenders disgruntled:
The first-year bonus is gone. Previously the card offered unlimited 3% cash back on all purchases in the first year and 2.5% after that. The introductory 3% rate has been eliminated. Now it's 2.5% cash back from day one.
Rewards are now limited. There used to be no limit to how much cash back you could earn with the card. Now, you earn rewards only on up to $10,000 in qualifying purchases per billing cycle. This means the maximum amount of cash back you can earn on the card each month is $250.
The annual fee on the card remains the same: $0.
Why the changes?
The Alliant Cashback Visa® Signature Credit Card is issued by Alliant Credit Union. Credit unions, unlike traditional banks, are member-owned cooperatives that have a responsibility to act in the best interest of all their members, rather than pursue profit. Michelle Goeppner, Alliant's director of credit product strategy and analytics, noted in an email to NerdWallet that paying out above-average, unlimited rewards can get expensive.
"We are making these changes so we can continue providing the key benefits that our members use and value most at no additional cost: A high, flat cashback rate with no complicated tiers or revolving categories, no foreign transaction fees and a low annual fee waived in the first year," Goeppner said.
What it means for cardholders
Although these changes certainly aren't an improvement for cardholders, the card's ongoing rate of 2.5% is still best in class for a flat-rate cash back card. Even if you hit that sky-high $10,000 limit every billing cycle, you'll still earn $250 a month, which translates to $3,000 a year.
Many who hold the Alliant Cashback Visa® Signature Credit Card probably won't feel the impact of the new rewards structure, Goeppner said.
"Most of our members will not be affected by this change as our research shows that more than 80% of our cardholders spend less than $10,000 per billing cycle," Goeppner said.
If you're considering getting the Alliant Cashback Visa® Signature Credit Card for its still-high ongoing rewards rate, keep in mind that applying for the card also means joining the Alliant Credit Union (which you can do when you apply). And you'll have to spend at least $3,960 annually ($330 monthly) on the card in year two and beyond to break even on the annual fee.
Use our calculator below to see how your rewards would compare with those on a 2% card with no annual fee, based on your spending.