The Neo Mastercard, Secured Neo Mastercard and Neo Money have all been updated with new cash back earn rates that go as high as 4% which are tied into the balance held in a Neo Everyday account.
Earn Rates
The Neo cards now have variable base and accelerated earn rates that range from 0% to 4% cash back. The amount cardholders earn is dependent on their balance held in a Neo Everyday bank account.
From the above chart you can see that if you do not hold any money in or do not have a Neo Everyday account you will only stand to earn 1% cash back on gas and groceries plus any cash back on offer with Neo’s network partners..
Once you hold $1,000 in an Everyday Account the Neo Mastercard and Secured Neo Mastercard will earn 0.5% to 1.5% cash back while the Neo Money Card requires $1,500 to be held to begin to earn 0.5% cash back on all other spending.
The earn rates for the Neo Mastercard and Secured Neo Mastercard jump to 4% on gas and groceries and 1% on all other spending once you have $10,000 held in an Everyday Account. The Neo Money card maxes out a 3% cash back on gas and groceries on the same balance holding.
The cards also earn additional cash back of up to 15% for purchases at over 10,000 of Neo’s network partners.
The accelerated rates do have annual spending caps assigned to them as follows:
The cap on grocery spending is low but unlike someone who may have a World Elite Mastercard, the amount of annual spending on these cards will tend to be lower. Still, for some, even if they don’t have as much overall spending as someone with a World Elite card, it’s not hard to spend more than $6,000 per year on groceries. This opens up the door to other options that may award more cash back over the course of a year.
The most impressive earn rates on these cards are for gas purchases. The 4% top tier earn rate is matches or beats most cards in the market, including those with annual fees. The only card that is higher is the soon to be released Neo World Elite Mastercard (This does not include potential outsized redemptions for business class/first class by converting Amex Membership Rewards points to an airline)
New monthly fee on Secured Neo Mastercard
Neo has now added a $5 monthly fee to the Secured Neo Mastercard This fee will be charged right away for new cardholders while existing Secured Credit cardholders will see the $5 fee start on September 1, 2024.
Neo Everyday Account interest rate cut
An important note on the Neo Everyday Account since it plays a big part in the product offering – the interest rate earned on funds held in the account has dropped to 0.1% from 1% as of August 1st.
This interest rate change can affect the new value proposition of the Neo cards. While they now offer increased cash back by holding money in an Everyday Account, you should complete calculations to see if it is worth it. The reason why is that you could place the $10,000 into a high interest savings account (With Neo or other banks) to earn up to 4% or perhaps even more interest and then get a different credit card with similar cash back earn rates that has no deposit requirements.
Wrapping it up
Big changes across the board being released from Neo Financial on many of their products. There are both pros and cons to the changes. The pro being the higher cash back earn rates on the Neo Mastercard, Secured Neo Mastercard and the Neo Money card when you hold funds in an Everyday Account. The cons being the elimination of a base earn rate unless you do hold funds in an account and the introduction of the $5 monthly fee for the Secured Card.
Overall if you are able to hold $10,000 or more in an Everyday Account one of these products may make good sense for you thanks to those higher earn rates, namely for gas purchases but do take into account that you could earn more interest on that $10,000 in higher interest bearing accounts.
Learn more about the products here:
Images via Neo