Are you a Verizon customer looking to trim your monthly cell phone bill?
The new Verizon Visa Card, which carries no annual fee, could help you cover as much as half of your monthly phone expenses through rewards for buying things like groceries, gas and dining.
But it also has limitations that leave money expert Clark Howard skeptical of replacing your current cash back card as your everyday spender with this offering.
4 Things to Know About the Verizon Visa Card
After teasing the card’s availability earlier in the week, Verizon officially launched this credit card on Friday, June 26. Here’s what you need to know:
1. You Must Be a Verizon Wireless Customer to Apply
In order to apply for this card, you must be the account owner or account manager of an active Verizon Wireless plan that has 10 lines or fewer. This excludes customers who use Verizon’s prepaid cell phone plans and customers of discount cell service providers that use the Verizon network.
On the surface, this may seem restrictive for the launch of a new credit card. But it makes sense, given that the rewards for this card are “Verizon Dollars” that can only be used within the cell provider’s ecosystem.
What is surprising to me is that Verizon Fios customers are not eligible to apply.
2. You Can Get 4% Rewards on Groceries and Gas
Verizon has some rewards that are competitive with top credit cards in some spending categories.
Here’s a full breakdown of the Verizon Dollars rewards percentages:
- 4% Rewards: Grocery stores, Gas
- 3% Rewards: Restaurants and Dining (including takeout purchases)
- 2% Rewards: Verizon purchases
- 1% Rewards: All other purchases
The 4% rewards on grocery and gas spending are the most attractive, and they are competitive in the credit card rewards market. This is shy of the 6% you can earn on groceries with the Blue Cash Preferred® Card from American Express and the 5% on gas you can receive from the Sam’s Club® Mastercard®. But that can be offset by the lack of associated fees on this card.
Of course, the downside is that you can redeem these rewards only as Verizon Dollars (more on these later), while the other credit cards mentioned offer rewards in the form of cash back. Clark prefers the latter.
3. What Are Verizon Dollars and How Can I Use Them?
The best way to look at Verizon Dollars is to consider them like store credit with Verizon. You can use them on almost anything Verizon sells, but they have no cash value.
Since you must be a Verizon Wireless customer to have the card, the natural move seems to be to apply these Verizon Dollars toward your monthly bill. But you can do more. You could buy a new cell phone, or even a set of Apple AirPods, by using the Verizon Dollars in the Verizon store.
As you might expect, the Verizon fine print prohibits selling them, transferring them to another account or using them to purchase Verizon gift cards.
4. There Are 2 Auto-Pay Rewards You’ll Want
First, new Verizon Visa cardmembers can receive $100 in bill credits as a welcome bonus. All you have to do is make your full Verizon Wireless or Fios payments with this card for the first 24 consecutive months of being a cardholder. It will be issued as a monthly credit of $4.17. You can read the details of that program here.
Next, you can earn another $10 per month off your bill by signing up for Verizon’s auto-pay program using the credit card. If you’re already a Verizon customer, you may be aware this is typically reserved for debit cards or bank draft transactions only.
This will be the only credit card option that can net the $10 off, and it also will earn you 2% in Verizon rewards in the process.
How the Verizon Visa Card Could Cut Your Cell Phone Bill in Half
If you’re like me, you probably saw those spending bonuses and immediately starting calculating just how valuable the rewards could be.
While the obvious downside of “Verizon Dollars” is that you can spend them only on products or bills through Verizon, there still is some opportunity for major savings on your cell phone bill if you’re willing to commit to the card. I’ll show you what I mean.
Let’s take Verizon’s introductory level unlimited cell phone plan, for example. The “Start Unlimited” plan gives you all the basics with unlimited talk, text and data for an advertised $70 per month (plus taxes and fees, of course). You’ll also notice that the potential $10 per month in auto-pay savings, which you can claim with this credit card, are already included in that price.
So how could we chop that $70 per month in half by using this credit card? It’s pretty attainable. If you’re using the right categories, you’ll be able to accomplish the goal by spending less than $1,000 per month on the card.
Here’s a sample spending scenario that would net you $35.40 per month in Verizon Dollars:
|Rewards Category||Monthly Spend||Verizon Dollars Earned|
|Groceries (4%)||$500||$20 per month|
|Gas (4%)||$125||$5 per month|
|Dining & Takeout (3%)||$300||$9 per month|
|Verizon (2%)||$70||$1.40 per month|
|Total||$995||$35.40 per month|
You may have different spending and cell phone plan scenarios in your life. You’ll want to compare your monthly spending in key categories with what you owe Verizon each month to calculate the potential savings with this credit card.
Notice that I did not include any “non-bonus” category spending, which nets just 1% in Verizon Dollars. In most cases, you’ll want to consider doing that spending on a different credit card for better rewards.
Are you considering signing up for the Verizon Visa Card? Here are some pros and cons to think about before making your decision:
Verizon Visa Card: Pros and Cons
|4% on grocery and gas purchases||Must be a Verizon Wireless customer to apply|
|3% for dining includes takeout orders||Only 2% reward on Verizon purchases|
|No annual fee and autopay bonus option||No cash back redemption options|
Bottom Line: Citing the 1% return on many spending categories and the lack of cash back rewards, money expert Clark Howard refers to this offering as a “yawn” for anyone but the most dedicated Verizon customer.
“It’s not one that most people would consider a ‘front-of-wallet’ card,” Clark says.
However, if you are sure you’ll be with the cell provider for years to come, you can certainly lower your monthly bill by making this one your “primary spender” in select categories.