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Redstone Federal Credit Union, based in Alabama, offers two $0-annual-fee credit cards:

• A Visa Traditional, for those with less-than-ideal credit histories.

It’s the latter version, though, that’s northern Alabama’s well-kept secret. The Redstone Federal Credit Union Visa Signature card boasts reward rates and perks that outshine some of the best credit cards on the market from some of the biggest banks. And as you might expect from a credit union, the interest rate is also lower than you’ll find on credit cards at those bigger institutions.

But the bar for membership at Redstone Federal Credit Union is high, so not everyone will be able to apply. Plus, the card’s rich bonus rewards come with caps to be aware of.

Here’s what you need to know about the Visa Signature Redstone Federal Union credit card.

To be eligible for the Redstone Federal Credit Union Visa Signature card, you’ll have to become a member of the credit union. Unlike some other credit unions, this one isn’t as easy to join.

As of this writing, you must fit into one of the following categories:

• Have an immediate eligible family member who belongs to the credit union.

• Live in a household with a Redstone member. 

• Be an eligible government employee or contractor in Madison County, Alabama, or with Redstone Arsenal, a U.S. Army base in the Huntsville, Alabama, area.

• Be a service member or a dependent of one at Redstone Arsenal or eligible places in Madison County. 

• Be a reserve service member in Madison County. 

• Be a member of the National Guard in one of a handful of eligible Alabama counties.

If you don’t live in or have any connection to Alabama, that last bullet point is likely the only way in. Just be aware that you may owe membership fees for joining a partner organization, and that’s on top of the requirements from Redstone Federal Credit Union.

For instance, in addition to meeting the membership criteria above, you’ll also have to open what’s called a “share savings account” to join the credit union. The minimum balance required to open one is $5, and you must keep that amount in the account at all times.

That’s a lot of hoops to jump through. On the other hand …

Many credit cards offer elevated rewards in only one or two select everyday categories — which is what makes the Redstone Federal Credit Union Visa Signature an exception. It earns bonus cash back (issued as points) across multiple top spending categories, including the “big three” for many households: restaurants, gas stations and grocery stores. It even goes a few steps further than that.

Here’s what you can expect:

• 5% cash back rewards (10 points per $1 spent) at restaurants and on gas purchases, on up to $7,000 spent annually. 

• 3% cash back rewards (6 points per $1 spent) on groceries, discount stores, wholesale clubs, utilities, phone and streaming services, on up to $7,000 spent annually. 

• 1.5% cash back rewards (3 points per $1 spent) on all other purchases. 

Rewards expire on the last day of the month, three years after they’re issued.

Still, those are quite generous rates for a $0-annual-fee credit card. Yes, the combined spending caps do limit how much you can expect to earn annually in the card’s 5% and 3% bonus tiers. But if you were to max out both of those caps, you would snag $560 a year in cash back, again for no annual fee — and without taking into account the card’s uncapped 1.5% base rate on all other spending you do.

Typically, other cards that boast 5% cash-back categories feature rotating (not fixed) bonus categories that you must track and/or opt into every three months. These cards also feature caps on that 5% rate, which ends up restricting your bonus earning to about $300 a year. They don’t tend to feature an additional 3%-back category, and the best you’ll generally do on “all other spending” is 1% cash back.

Technically, the Redstone Federal Credit Union Visa Signature earns points, which are worth half a cent each when you redeem for cash back into a Redstone Federal Credit Union checking or savings account. (That’s lower than the industry standard of a penny per point, but the card makes up for that by awarding you a large number of those points at a time: 10 points per $1 spent = 5% cash back.)

You can choose to automatically redeem your cash back monthly, quarterly or annually. You’ll also have the option to redeem the full amount of available points or a specific number of points. There is, however, a minimum required redemption of at least $5.

But you can also choose to redeem your points for travel, charitable donations or gift cards and certificates from select merchants.

New cardholders can earn $150 in cash-back rewards by spending $3,000 in the first 90 days. (This offer is accurate as of May 2024.)

In addition, for those looking for some interest-free breathing room to pay down short-term debt, the card offers a 0% introductory APR for six months on balance transfers made within the first 30 days. Notably, there’s also no balance transfer fee. (This offer is accurate as of May 2024.)

If you need a longer window to pay down debt, consider instead the BankAmericard® credit card, which offers 0% Intro APR for 18 billing cycles for purchases, and for any balance transfers made in the first 60 days. After the Intro APR offer ends, a Variable APR that’s currently 16.24% – 26.24% will apply. It charges a 3% balance transfer fee, but it can be worth paying if it saves you money on interest charges over time.

As of May 2024, the Redstone Federal Credit Union Visa Signature charges an annual percentage rate ranging between 17.25% and 18.00%. That’s lower than the average APR of 22.15% charged for accounts that incurred interest in 2023, based on Federal Reserve data.

It’s also keeping with federal law, which caps the interest rate on most loans and credit cards at federally chartered credit unions. (For the past several years, the National Credit Union Administration has maintained an 18% cap.)

But just because the APR is lower doesn’t mean it’s wise to carry a balance. Interest charges will still add up quickly. You’ll get the most value from this card — and from any rewards credit card — if you pay off the balance in full every month.