Big Changes Are Coming for Alliant’s 2.5% Cash Back Credit Card

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If you have read Team Clark’s numerous articles on credit cards, you know that we’re fans of the Alliant Visa Signature card because of its 2.5% cash back rewards program on everyday spending.

We consider it to be one of the best flat-rate cash back credit cards for high-volume spenders in spite of its $99 annual fee.

But now, that fee is going away as part of significant changes coming to the card — for both new and existing users. I’ll walk you through what to expect.


Alliant Has Eliminated the Annual Fee for This Card

Let’s start with the good news. We’re no longer going to have to decide whether paying the $99 annual fee is worth getting an extra 0.5% cash back on everyday purchases when compared to 2% cash back cards.

In a move that may surprise some in the industry, Alliant has decided to remove its $99 annual fee without taking the 2.5% cash back rewards off the table. There are, however, some adjustments on who will be eligible for 2.5% rewards moving forward (more on that coming up).

This change is already in effect. The advertisement for new card applicants already reflects that this is a no-annual-fee credit card.

“Our members told us that they want to earn cash back rewards on all eligible spending and don’t want to pay an annual fee,” Alliant says in the Visa Signature card promotional literature. “We listened, so now we’re making some changes to improve our industry-leading card.”


Alliant Is Moving to a Tiered Rewards System

Alliant combined its elimination of the annual fee with some significant changes to the cash back rewards program.

It will now be a tiered rewards system that allows cardholders to continue to earn unlimited 2.5% cash back without annual fees if they meet certain criteria.

If they don’t meet and maintain the new account standards, their rewards may drop down to 1.5% cash back on all purchases.

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These changes, which apply to all existing cardholders and any new applicant who is approved by July 13, 2021, will begin to take effect during the July 2021 billing cycle. However, full implementation of the new rules will be phased in between now and the end of 2021 (more on that shortly).

Here’s a quick summary of what the tiers will look like by the beginning of 2022.

Tier One Cash Back Rewards

The Rewards: Earn 2.5% cash back on your first $10,000 of monthly qualifying eligible purchases. Then earn 1.5% cash back on your monthly qualifying eligible purchases above $10,000 made with your Alliant Visa Signature Card.

The Requirements: To get this reward, you must meet the requirements for opening an Alliant High-Rate Checking account and maintain a daily average balance of $1,000 or more in that account for the quarter prior to the billing statement the rewards are earned on.

Your checking account is assessed quarterly to determine eligibility for entering or remaining in this rewards tier. So, for example, your checking account’s status for the fourth quarter of 2021 (October, November and December billing cycles) would determine your cash back rewards tier for January 2022 spending.

Some of the basic requirements for keeping yourself eligible for the Alliant High-Rate Checking account are signing up for eStatements and making at least one electronic deposit to the account each calendar month.

Tier Two Cash Back Rewards

The Rewards: Earn unlimited 1.5% cash back rewards on all qualifying eligible purchases made with your Alliant Cashback Visa Signature Card.

The Requirements: If you don’t qualify for Tier One Rewards during a calendar quarter, you will automatically earn Tier Two Rewards. So the requirements for this tier are simply to have an Alliant Visa Signature Card account in good standing.

Once again, it’s worth noting that your account is assessed for tier eligibility after each calendar quarter. So you could be in Tier 2 for a spending period while improving your checking account status to earn Tier 1 status the next quarter.


What This Means for Existing Cardholders

If you already have the Alliant Visa Signature card, you may have already been alerted that changes are on the way for your account.

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While this seems like a major change, Alliant has done a pretty good job of laying out a play for transitioning cardholders from the old system to the one they envision for 2022 and beyond.

Here’s what you need to know about the rest of 2021.

  • It’s business as usual for your June 2021 cash back accumulation.
  • Beginning with the July 2021 billing cycle, you’ll start to experience the first step in the transition by being placed into a rewards tier.
  • For the July, August and September billing cycles, you’ll automatically receive Tier One status. This will allow you to continue to enjoy 2.5% cash back on your first $10,000 in spending each billing cycle.
  • While you’re getting complimentary Tier One status in those months, you’ll want to start working on ensuring you’re meeting the requirements to stay in that tier.
  • That’s because you’ll need to qualify for Tier One by the final quarter of 2021 (beginning in October 2021) to retain that status for the October, November and December billing periods.
  • Your tier status at the beginning of 2022 will be a result of your checking account activity during October, November and December. From that point forward, it will be a regular quarterly assessment.

What This Means for Potential New Applicants

If you’re interested in the new tiers reward system, you can sign up before July 13, 2021, and be eligible for the stairstep implementation mentioned in the section above.

To be eligible for this credit card, you must apply for membership to this credit union. And once you’re a member, you’ll need to open the high-rate checking account to qualify for the 2.5% cash back rewards on your credit card spending.

If you wait until after July 13, you’ll have to wait to see what Alliant’s new standards for applying will be. While that information is not available as of this writing, my best guess is that you’ll likely have to meet the full Tier 1 or Tier 2 standards right away.


Final Thoughts on Alliant’s Changes to the Card

If you step away from all the important details of the transition to the new plan and take a higher level view of it, it really boils down to this: Alliant is making cardholders get a bit more immersive in their banking products in exchange for eliminating the annual fee on this popular credit card.

This move, which Alliant says was at the request of current members, may also serve as a way to bring new customers to the credit union.

Asking people to do their banking with you at a reasonable level (one direct deposit per month, no mailed statements and an average minimum balance of $1,000) seems like a fair trade-off for a cash back card that rewards everyday purchases with 2.5% cash back on up to $10,000 spending per billing period.

So we still recommend this credit card for those of you who are in search of a good everyday spender and are in need of a credit union to do your banking.

If gaining access to this credit card motivates you to leave the big banks and their fees behind, that’s all the better.

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