Uber launches no-fee, cash-back credit card

NEW YORK — Uber already has a home on your phone. Now it wants a place in your purse or wallet.

The ride-hailing giant on Wednesday unveiled a new no-fee, co-branded credit card with British bank Barclays that it hopes will become a major part of consumers’ everyday spending habits.

While it will use points, the Uber Visa card is designed as a cash-back loyalty program. Paying for an Uber ride will get the card holder 2 percent cash back. Other rewards include: 4 percent cash back for every dollar spent on dining including Ubereats on-demand food delivery service; 3 percent cash back on airlines, hotels and vacation home rentals such as Airbnb; 2 percent cash back on online purchases and subscriptions; and 1 percent cash back on all other purchases.

The Uber card will also give a small $50 annual credit toward online subscriptions such as Netflix, Hulu or Amazon Prime, if the customer spends $5,000 on the card in a year. The card will also insure a person’s smart phone to up to $600 for theft or damage, as long as the customer puts his or her monthly mobile phone bill on the card.

The card will also have no foreign transaction fees when used outside the U.S. and no annual fee.

Customers will be able to redeem their points for Uber rides using a standard penny-per-point redemption rate, or just have the points converted to cash and deposited back into their bank accounts. Barclays and Uber said point transfers to airlines will be coming in 2018.

Uber’s credit card is clearly being marketed as a digital credit card first and a physical card second. Uber customers will be able to apply for the card within the Uber app, with most of the personal information needed for the credit application pulled directly from their Uber profile. If approved, the card can be immediately loaded into a customers’ mobile wallet. The goal, Uber’s David Richter said, is to have people applying, getting approved, loading the card and paying for the ride with the card all while the customer is being taken to their destination.

Brian Riley, a credit card industry consultant at Mercator Advisory Group, said the 4 percent on dining should be attractive to customers, but the 2 percent cash back on Uber rides seems underwhelming.