Swedish furniture giant IKEA has gotten into the credit card game. The company launched its IKEA Visa Credit Card on May 15, hoping to entice consumers to pay for their Poäng chairs and Ektorp sofas with a branded credit card that offers money-back rewards and perks on IKEA services.
The card is offered in partnership with Alliance Data, a company that helps develop private label credit cards for name brands.
The new credit card offers 5% back for every $1 spent on all purchases at IKEA, including its TaskRabbit assembly service. But its rewards benefit on other regular purchases are pretty impressive, too:
- Cardholders earn 3% back for every $1 spent at restaurants, grocery stores and on utilities—including mobile phone service and even streaming subscription sites like Netflix.
- All other purchases accrue 1% back for every $1 spent.
"This program is designed to reach as many of our customers as possible with the spending power to make this their credit card for everyday purchases," Jacqueline DeChamps, chief operating officer at IKEA US, said in a statement.
Other Perks for IKEA Shoppers
Cardholders earn $25 bonus off their first IKEA purchase using the card, as well as free standard shipping and delivery on in-store IKEA purchases now through August 31, 2018. If you spend $500 in qualifying purchases outside of IKEA within the first 90 days of opening the account, you earn another $25 IKEA reward certificate.
The card comes with no annual fee, and automatically enrolls cardholders into the IKEA FAMILY loyalty program, which offers 90-day price protection, access to product discounts and special deals, free coffee or hot tea at the IKEA restaurant, 30 extra minutes of kids playtime at Smaland, and more.
Should You Sign Up for the New Card?
The IKEA Visa has one standard purchase APR of 21.99%—significantly higher than the national average of 16.94%, but relatively in line with other rewards credit cards.
But the card does come with a big catch: Rewards aren't available as cash back or statement credits. Rather, cardholders accrue rewards in $15 increments that are distributed as rewards certificates that can only be used on additional IKEA purchases. So unless you plan to spend a significant amount of money at IKEA regularly, you'll probably find other rewards cards more useful for earning cash back.
Editorial Disclaimer: Opinions expressed here are author's alone, not those of any bank, credit card issuer or other company, and have not been reviewed, approved or otherwise endorsed by any of these entities. All information, including rates and fees, are accurate as of the date of publication.