Ally Everyday Cash Back Mastercard review: Elevated cash back on everyday spending

The Ally Unlimited Cash Back Mastercard is similar to the Everyday Cash Back Mastercard, but its flat-rate 2 percent cash back on all purchases and no annual fee makes it potentially more rewarding. The Ally Everyday’s rewards rate is great for gas, grocery and drugstore purchases, but the Ally Unlimited card is the better choice if your spending doesn’t fall under any specific category. Plus, the Unlimited carries no annual fee.

However, if you don’t want to limit yourself to specific categories, then the Unlimited Cash Back Card could suit you better.

Unlike the Ally Everyday Cash Back Card, the Blue Cash Preferred Card from American Express comes with an introductory offer on purchases and qualifying balance transfers and a $250 welcome bonus after spending $3,000 in eligible purchases within the first six months of account opening. Its ongoing APR is also comparable to the Ally Everyday Cash Back card’s APR. Your interest rate depends on your creditworthiness, so if you have good credit, the Blue Cash Preferred might provide you with a lower APR.

The Blue Cash Preferred Card also offers 6 percent cash back on U.S. supermarket purchases (up to $6,000 per year in purchases, then 1 percent) and select U.S. streaming subscriptions, 3 percent on U.S. gas stations and transit and 1 percent on all other purchases, which can allow for far more cash back on grocery store purchases compared to the Ally Everyday. Cash Back is received in the form of Reward Dollars that can be redeemed as a statement credit or at Amazon.com checkout.

One major downside of the Blue Cash Preferred is its $95 annual fee after the first year, which could be too pricey for some cardholders. This fee is much higher than the Ally Everyday card’s potential $39 annual fee, making it more difficult to offset, depending on your spending.  

The Citi Double Cash® Card earns up to 2 percent back on every purchase (unlimited 1 percent cash back when you buy and an additional 1 percent as you pay for those purchases). This card enables you to earn more for purchases that don’t qualify for the 3 percent cash back categories with the Ally Everyday Cash Back Mastercard. It also comes with a solid balance transfer offer, which can help you pay off existing card debt interest-free. 

If you have fair credit and you’re looking for a way to earn travel rewards, the Capital One QuicksilverOne Cash Rewards Card is a solid, achievable option. It offers unlimited 5 percent cash back on hotels and rental cars booked through Capital One Travel and unlimited 1.5 percent cash back on all other purchases. The higher cash back rate on all non-category purchases means this card is the stronger card for any purchase that doesn’t fall under the Ally Everyday card’s categories. 

For those constantly out and about, this card can benefit your wallet. If you make frequent purchases in everyday categories like groceries and gas, the Ally Everyday card can net you a decent amount of cash back. You also won’t have to worry about extra fees that can make credit cards feel more like a drawback than an asset. 

Although you might not qualify for some of the best credit cards right now, the Ally Everyday card lets you access a decent rewards rate while building credit toward better options. It also has a few features that won’t hinder your ability to build your credit, such as a bunch of late fees or unreasonably high APR.

The primary criteria for a rewards or cash back card’s rating is its rewards value. This includes the card’s average rewards rate, estimated annual rewards earnings, sign-up bonus value and reward redemption value.

To estimate a card’s average annual rewards earnings, we first calculate its average rewards rate based on how much it earns in different bonus categories and how closely its categories align with the average person’s spending habits, according to data from the Bureau of Labor Statistics. 

Based on this data, we determine a “chargeable” spend (which purchases are likely to be put on a credit card and earn rewards). This includes the following spending by category:

• Groceries: $5,200
• Dining out: $3,000
• Entertainment: $2,500
• Gas: $2,100
• Apparel and services: $1,700

Using this data, we assign a weighting to each of a card’s bonus categories. For example, a card’s grocery rewards rate receives a 23 percent weighting based on how much of the average person’s budget is spent on groceries. We also estimate the redemption value of points or miles from various issuer, airline and hotel rewards programs.

This weighting and rewards valuation allows us to estimate a card’s average annual rewards earnings — how many points or miles you’d earn with a given card if your spending was about average and you used the card for all of your purchases, as well as what those points are worth. We also use point valuations to determine a card’s sign-up bonus value

With these calculations complete, we assign each card a score based on how its average rewards earnings, sign-up bonus value, rewards rate and redemption value stack up against other rewards cards.

We also rate cards based on how much it costs to keep them in your wallet or carry a balance. 

To start, each rewards or cash back card is scored based on whether it offers an intro APR and how its ongoing APR compares to the rates available on other rewards or cash back cards. 

We also score each card based on how its annual fee influences its overall value. 

We consider a card’s annual fee in two ways — how it ranks relative to the fees you’ll find on other cards in the category and how it impacts a card’s overall rewards value. Cards with an annual fee will always be at a slight disadvantage in our scoring system since annual fees inherently cut into your rewards value, but if a card offers terrific value via its ongoing rewards and perks, it can earn a high score even if it carries a high annual fee. 

With this in mind, we rate a card based primarily on how its ongoing rewards value and ongoing perk value (such as annual credits or bonuses) stack up against other cards in the category when you subtract its annual fee.

We rate each card’s flexibility based on the restrictions it imposes on earning and redeeming rewards and factor this rating into a card’s overall score. 

Flexibility factors include whether a card only allows you to earn a high rewards rate on a small amount of spending or requires you to meet a certain earning threshold before you can redeem rewards. We also examine whether your points are worth less when you redeem for some options versus others and whether a card gives you the flexibility to transfer rewards to airline and hotel partners. 

We also score each card’s set of features – its perks and benefits — against five tiers of features to provide a rating. 

We break down these tiers as follows:

• Tier 1 has less than standard card features (an ultra-streamlined card that offers basic utility and next to nothing in the way of ancillary benefits. 
• Tier 2 includes the benefits you’d expect on standard Visa or Mastercard credit cards, such as free access to your credit score, car rental insurance and $0 liability for fraudulent charges. 
• Tier 3 includes “prime card” or better-than-average card features like cellphone insurance, lost luggage insurance, concierge services and purchase protection. 
• Tier 4 includes luxury features such as airport lounge access, elite status with an airline or hotel and credits for expedited security screening membership programs. 
• Tier 5 includes the sort of exemplary benefits you’ll find on top-tier luxury cards, such as high-value travel credits, cardholder memberships and other unique and valuable perks.

You have to receive a mailing offer or prescreened offer from Ally that includes an access code to apply online. You don’t have to be an Ally customer to receive it, but it does increase the likelihood of receiving an offer.

Ally is an online-only bank, so it has all the features of a traditional bank without the physical locations. There are, however, ATMs available if you want to make in-person deposits, withdrawals, or want to check your balance.

Currently, you are unable to apply for the Ally Everyday Cash Back card directly as you will need an access code from Ally to apply online.