Ace Rewards Visa Review

For the Contractor and Handyman - If you are in the contracting business, I suspect that there is a high chance that you would buy the bulk of your tools and supplies from a particular store or chain of stores. If you happen to buy a lot of hardware from Ace stores, then the Ace credit card will be something that they hope you would want to check out. But the key question is should you get it? The answer is not really that simple (as we'll soon find out).

Understanding The Ace Rewards Program - Before we look into the details of this card (in particular with regards to how you earn points), we need to first understand how the reward program works. If you go to the Ace Rewards site, you will find that you actually earn 10 points for every dollar that you spend at Ace stores. It then goes on to say that once you have earned 2,500 points, you can redeem for $5 reward coupon.

At first glance, it would seem like the reward ration (or percentage) is not very good. After all, if we just look at the fact that 2,500 points gets you $5 in rewards, it looks like a 0.2% return (far short of the standard 1%) return!. But we have to remember that you will earn 10 points for every dollar that you spend at the store. Hence, to earn 2,500 points require $250 in spending. For any conventional reward program, that equals 250 points. And when you convert 250 points equivalent to $5, that is a 2% return, which is pretty good.



With that out of the way, let us now look at how you earn points with the card.

How Are You Rewarded For Using This Card - This part is a little complicated, so let's start from the ground up. The base earning is 1%. Now, with most card 1% means that if you spend $100, you get 1 point. But this is not how it works for this card. In Ace Rewards terms, 1% means 5 points/$1 (sounds confusing?).

Next, you will earn 2% when you use the card at gas stations and at grocery stores. As we have just explained, 2% means 10 points/$1.

And here's the goodies. When you use this card to buy stuff from Ace stores, you will earn 5% rewards. By now, we should know that 5% means 25 points/$1. But once again, there are some rules for this. For every dollar that you spend at Ace, you will earn 3% rewards (ie 15 points/$1) and an additional 2% (10 points/$1) once your annual spend exceeds $12,000 in a calendar. So it appears that they have put a condition for you to earn the 5% (or rather 25 points/$1) based on annual spend. If you do not put $12,000 on the card, then you will simply get 3% (or rather 15 points/$1).

The Ace Rewards Visa allows you to earn 5% rewards for every dollar that you spend at Ace stores. Now, this needs a little explanation. Previously, you did indeed get 5% rewards as long as you shopped at Ace stores. But they have now added a little hurdle to cross. If you spend less than $12,000 during the calendar year, you get only 3%. Once your annual spend exceeds $12,000, you get an additional 2%, making it 5%.

Ace Rewards has also just added a new feature into their cards. They are now allowing cardholders to earn 10% rewards on specific categories that rotate quarterly. This appears to be taking a cue from rotating category cash back cards like the Chase Freedom and Discover More. The 10% rebate is very good, but it is unclear from their website what those categories will be. One can only presume that you will know if you are a card member. 10% means you get 50 points/$.

You also get to earn 2% rewards at gas stations and grocery stores. And for the usual regular purchases, the standard 1% applies. I really like the 2% rewards on gas stations and groceries because very few cash back cards give extra rebates on these items these days.
 

In terms of store cards, the Ace credit card ranks pretty well as it allows you to earn 5% rewards. 5% is at the upper end of the range for store cards (which normally ranges from 2% tp 5%). Furthermore, you get to earn 2% on gasoline and groceries.

The other relevant comparison to make is with the home depot credit card. The home depot credit card allows you to earn 3 points for evert dollar that you spend at their stores. You also earn double points for gas, grocery and restaurant spending. So these two cards are similar, but the Ace is better in terms of allowing you to earn 5% rewards versus 3% for the Home Depot card.

If you are seriously thinking about this card, then you ought to know that there is an alternative to getting rewards or discounts from Ace. The Discover IT Card allows you to earn 5% rebates from Ace store when you shop online. In fact, you will get free shipping for most items when you have it shipped to a local store.

Before we make a verdict on this card, I think it is important to clarify the confusion of the rewards points and percentage terms that are listed for the card. The reason for this confusion is because of the program itself. But at the end of the day, it is no different from conventional programs. How do we know this? Well, if you earn 1% for regular purchases, you are earning 5 points/$. Let's use the 2,500 points converted to $5 rewards example as used earlier. To earn 2,500 points on 1% earnings, you need to spend $500. And spending $500 to get back $5 is 1% rebate (which is pretty standard for most reward program). Now with that out of the way, this is what I think.

For the contractor who buys a lot of stuff from Ace Hardware stores, I think this is a very good card to have. Not only can you earn 5% from their store purchases, but you also earn 2% on gas and groceries. For those of you planning a big renovation project, this may also be a good card to get in advance to earn rewards so you can save some money from your supply purchases. The Ace Rewards credit card is actually a good card in terms of the ability to earn reward points. 5% on Ace purchases and 2% on gas and groceries isn't too shabby at all. But the problem is not the card, but the reward program itself. You need so much more points to get the same equivalent in rewards than almost all other store reward programs that I know of. Hence, I cannot recommend this card even if you shop a lot at Ace hardware stores.