After the TSP, I invest my money in Betterment and Vanguard. I track all of my investments with Personal Capital. I also wrote a short, 2 hour book summarizing this site. You can buy it here.
USAA Federal Savings Bank is one of the top four military friendly banks. Started by military officers, USAA continues to serve the nation’s military forces at home and around the globe. I’ve been a member since 2008, when I took out the USAA Career Starter Loan. My wife and I hold 12 checking and savings accounts, 2 credit cards, our auto and homeowners insurance, and our low rate auto loan with USAA.
The number of people eligible to join USAA has grown in the past ten years. Some products like life insurance and investments are even available to those with no military affiliation. However, the best USAA products, like excellent credit cards, auto insurance, and their online banking are still reserved for those with the following military connections:
- Active, retired and honorably discharged officers and enlisted personnel of the U.S. military
- Cadets and midshipmen at U.S. service academies, in advanced ROTC or on ROTC scholarship, plus officer candidates within 24 months of commissioning
- Individuals whose parents have or had USAA auto or property insurance
- Former USAA members who had auto or property insurance
- Widows, widowers and un-remarried former spouses of USAA members who had USAA auto or property insurance while married
USAA offers several credit cards to their members. There are definitely better paying rewards programs out there, like any of these cards. I don’t use any card that offers less than 1% cash back on every purchase. Some cards even offer 5% cash back on certain categories and pay out monthly. However, having all of your accounts with one financial institution makes life simpler. If you aren’t into the credit card rewards game, a basic USAA credit card might be all you need.
USAA Credit Card Benefits
All of these USAA credit cards come with the following features:
- A free credit score, updated monthly
- No annual fee
- You are never liable for unauthorized charges
- Collision damage waiver to cover most rental cars, so you don’t have to buy expensive insurance every time you rent
- A 4% APR rate for up to 12 months if deploying or PCSing
- Chip technology (not sure if it’s Chip and Pin or Chip and Signature)
- Cash rewards are issued annually, so they can really add up
- The following cash rewards structure:
Here are the 3 best cash rewards cards USAA offers:
USAA Cash Rewards® American Express®
First on the list we have the USAA Cash Rewards® American Express®. This card sets itself apart from the rest of the pack by offering up to 2.25% cash back on gas and groceries. I know for my family these are often the largest expenses we have on the credit card every month, so getting an extra 1% cash back on purchases I make anyways is a no-brainer.
The only real disadvantage to this card is it’s American Express, which means you may find it difficult to use the card, especially if you travel overseas a lot. Visa and MasterCard are definitely much more widely accepted than AMEX.
USAA Active Military MasterCard®
The USAA Active Military MasterCard® has over 7000 reviews on USAA.com, over 5000 of which are 4 or 5 star reviews. With this card you can choose whether you want to be in the USAA Rewards program or get cash back at the end of the year. Based on the value of USAA Rewards points I think the cash rewards are a better option for most people.
The best part of this card is the no foreign transaction fees when you’re deployed. For up to 12 months USAA will waive the 1% foreign transaction fee. This is a great benefit for a no annual fee card. The no annual fee card I use most of the time (the Chase Sapphire Preferred) comes with a $95 annual fee.
USAA Cash Rewards® World MasterCard®
The USAA Cash Rewards® World MasterCard® is the most basic of these three cards but still offers the same cash rewards rebate as the other two. If you don’t travel overseas much and don’t care about foreign transaction fees, this might make more sense for you than the Active Military MasterCard. The other advantage this card has is it’s not an AMEX. Global and even state-side acceptance of MasterCard or Visa is much better than AMEX.
2 Websites I Use to Achieve Financial Independence Faster
I have investment accounts all over the place. To keep track of all of them in one place I use Personal Capital. It combines all of my accounts, shows me where I may be overpaying in fees, and provides beautiful charts showing my overall asset allocation and performance.
I use Personal Capital to track my Roth and Traditional TSP, Vanguard IRAs, banking accounts, SDP, and my Betterment taxable account, all in one place. It's free, secure and presents me with a one-stop dashboard so I can see all my money on one site.
Read my full review of Personal Capital and see how easy it can be to manage your investments in one place. Trust me, once you try it, you'll love it.
P.S. - If you have over $100,000 of assets and a 401k, you really need to run the Personal Capital 401k Fee Analyzer.
The best way I know to achieve financial independence is to keep your investments simple, diversified, automatic, and low-cost. Costs eat into your returns like you wouldn't believe! A 1% difference in expense ratios can mean $100,000s lost to fees over a lifetime of investing.
Even if you're a DIY (do-it-yourself) investor like I am, you need to check out Betterment. You can read my full review here, but the bottom line is for only $250 per $100,000 invested (0.25% expense ratio) you get simple, diversified, and automated investing. In addition every account now gets free Tax Loss Harvesting+ features, which should increase returns for the average investor more than the minuscule management fee.
If you're not a DIY investor or are just getting started with investing, then you definitely need to check out Betterment. It's what I recommend to my family and friends who aren't strong investors or don't care to learn about asset allocations, diversification, or rebalancing.