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Ikea and Comenity Capital Bank have put together a new $0-annual-fee credit card designed to reward loyal customers. The IKEA Visa® Credit Card, which launched May 15, offers rewards on purchases at the Swedish behemoth as well as on everyday shopping.
Cardholders will earn:
5% back in rewards per dollar spent on all Ikea purchases, as well as Traemand kitchen installation and TaskRabbit At-Home Assembly services (which Ikea bought in September 2017)
3% back in rewards per dollar spent on dining, grocery and utility purchases
1% back in rewards per dollar spent on all other purchases made with the card
The IKEA Visa® Credit Card also comes with a None.
Redeeming rewards is automatic, if complicated. For every 15 Reward Dollars you earn, a $15 Ikea Reward Certificate will be mailed to the address on your billing statement, or will be made available electronically if you’ve opted for paperless billing. These certificates can be used only at U.S. Ikea stores or the U.S. version of the company website.
If you're tempted by 3% back on dining, grocery and utility spending, you might find that a card like the Blue Cash Everyday® Card from American Express could be a better fit. It earns 3% cash back at U.S. supermarkets on up to $6,000 in annual spending (then 1%); 3% cash back at U.S. gas stations on up to $6,000 in annual spending; 3% cash back on U.S. online retail purchases on up to $6,000 in annual spending; and 1% back on all other spending. Terms apply (see rates and fees). Rewards with the Blue Cash Everyday® Card from American Express come as statement credits to use any way you'd like, and the card's annual fee is $0.
The IKEA Visa® Credit Card's rewards program carries other potential drawbacks. For example, say you decide to purchase a VIMLE 6 seat sectional couch, which Ikea lists on its website at $1,899 before tax. If you pay for it with the IKEA Visa® Credit Card, you'd earn $94.95 back in rewards — but since you can only get rewards in increments of $15, you'd receive reward certificates worth $90.
Also note that you'll be on the clock when it comes to redemptions: Reward certificates expire 45 days from the date they are issued, and the reward dollars you accumulate to earn those certificates expire 36 months after the date that they are posted to your balance.
Plus, the IKEA Visa® Credit Card comes with a stiff annual percentage rate for purchases, and there's no introductory 0% interest period: The ongoing APR is 21.99%, Variable APR — so it's not ideal for financing a large purchase.
Unless you plan to furnish your house entirely in Ikea furniture over a long time period, you may be better off with a card that pays simple cash-back rewards and doesn't require complicated instructions for redemptions.