Rewards credit cards are constantly looking for ways to distinguish themselves from the competition. Banks will do almost anything to get you to move a card to the top spot of your wallet, including paying bonus rewards for popular spending categories.
When I wrote about which cards provide the best return for grocery store spending, one of our readers mentioned a card that pays 5% back. I had never heard of the card, so I researched and found that the card pays up to 5% back for several categories, but there is one huge catch to earning the bonus rewards.
The Paceline Visa card is affiliated with the Paceline fitness app (there’s only an Apple version, sorry Android users). The Paceline app started as a program designed to pay rewards for working out. If you exercise for 150 minutes per week, as measured by a wearable device (Apple Watch, Fitbit or Garmin), you earn a reward, such as a $1 Amazon credit. Paceline has now launched a co-brand credit card through Evolve Bank which has some great returns.
Getting to the point, the Paceline Card has a $60 annual fee and earns 1.5% cash back on all eligible purchases and 2.5% back in the following categories.
Digging down a bit, I found this list of merchant codes (MCC) eligible for the bonus earning:
- Beauty and Barber Shops
- Bicycle Shops – Sales and Service
- Drug Stores and Pharmacies
- Health and Beauty Spas
- Massage Parlors
- Membership Clubs (Sports, Recreation, Athletic), Country Clubs, and Private Golf Courses
- Public Golf Courses
- Recreation Servies (Not Elsewhere Classified)
- Sporting Goods Stores
- Sporting and Recreational Camps
- Sports and Riding Apparel Stores
In addition, purchases from the following merchants are eligible for the 2.5% bonus category:
- Foot Locker
- Gym Shark
- New Balance
- North Face
- Outdoor Voices
- Under Armour
So why does the card advertise 5% back if the bonus categories pay a 2.5% return?
That’s the big catch with the Paceline card. To earn double rewards, you need to exercise for 150 minutes per week. Every week you meet your “streak” you earn bonus points. Like the app, you’ll use a linked wearable device to measure your activity. The app wants you to exercise often, only allowing a max of 50 minutes per day.
If you don’t have an Apple Watch, the Paceline Card offers a program to get one for free.
When you sign up for the Paceline Card, you can purchase an Apple Watch through the app. The price of the watch (up to $500) is divided by 52. You earn a weekly credit each week you meet your 150-minute streak. You’ll need to pay the weekly amount for any week you don’t exercise.
Rewards earned with the Paceline Card can only be redeemed as statement credits towards your account balance. You can not receive them as a cash payment.
With a $60 annual fee, you’d have to spend $2,400 in bonus categories at 2.5% back to break even. That amount drops to $1,200 if you get the exercise bonus every week you use the card.
I find the Paceline Card interesting. It’s a definite consideration for people who already work out and have significant spending in the bonus categories, some of which have no other cards offering bonuses.
If you’re just getting started, getting a “free” Apple Watch and 5% back on groceries, drug stores and other health expenses might be what it takes to keep you to get off the couch and get moving.
A big drawback is that you need to work out every week to keep the bonus categories and the Apple Watch credit, which becomes problematic when traveling, suffering any injury, or catching an illness.
Is this the best card on the market? Definitely not. Could it find a place to serve a subset of your monthly spending that’s currently unmet? For a specific group of people, I think so.
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