Recent Uber Glitch Is One Example Why You Should Always Pay With a Credit Card
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Many Uber customers were charged hundreds or even thousands of dollars because of a system glitch on Wednesday. Although the glitch has been addressed by Uber, some are still dealing with overdrafts and other bank issues because they had debit cards connected to their Uber accounts, rather than credit cards.
Instances like this are among the many reasons you should use credit cards whenever possible, especially as in-app payment methods.
When your debit card is wrongly charged (for, let's say, a $1,200 Uber ride that should have cost $12), money is automatically pulled out of your account. That means future payments may not go through, you could be charged overdraft fees or you may be stuck without money until the error is resolved. Even after you dispute a charge, it could take weeks for the bank to release those funds back into your account. I don't know about you, but I wouldn't last three or four weeks with thousands of dollars missing from my bank account.
When you pay with credit card, that money isn't automatically pulled out of your bank account. This gives you the luxury of time to dispute the charge and get things set right before having to pay the bill. In a situation like this, the credit card company can issue a chargeback, which essentially removes the charge from your bill and charges the merchant instead. It's one of the many consumer protections that paying with a credit card offers that debit cards do not.
Which Credit Cards Should You Use For Uber Rides
Another reason you should have a credit card linked to your Uber (and Lyft) accounts is that you can earn valuable rewards on every ride with the right credit card.
Chase Sapphire Reserve (or Preferred)
With the Chase Sapphire Reserve, you'll earn 3x points on dining and travel. Chase defines its travel category broadly and includes rideshare apps like Uber and Lyft. Ultimate Rewards points are some of the most valuable points available. Reserve cardholders can redeem their points for 1.5 cents each through the Ultimate Rewards travel portal, and you can also transfer points to any of Chase's travel partners at a 1:1 rate. TPG values Ultimate Rewards points at 2 cents each, meaning you'll get a 6% return on your Uber purchases when you have your card linked.
If a $550 annual fee for the Chase Sapphire Reserve card is out of your budget, you can still get a great return with the Chase Sapphire Preferred Card (which only charges a $95 annual fee). It earns 2x Ultimate Rewards points on travel and 3x Ultimate Rewards points on dining and you can redeem those points for 1.25 cents each through the Ultimate Rewards travel portal.
Blue Cash Preferred Credit Card
The Blue Cash Preferred® Card from American Express now offers 3% cash back on transit, which includes rideshare apps. You'll also earn 3% cash back at U.S. gas stations, plus 6% cash back on select streaming services in the US and the first $6,000 spent annually at US supermarkets (then 1%). Cash back is received in the form of Reward Dollars that can be redeemed for statement credits. The card comes with a $0 intro annual fee for the first year, then $95 (see rates & fees). The current welcome bonus is a $300 statement credit after you spend $3,000 in purchases on your new Card within the first six months of card membership.
If you're looking for a simple cash back card to maximize rewards across transportation, streaming and your weekly grocery run, this is the card for you.
Although the Uber Visa is probably the first card that comes to mind when thinking about Uber rewards, it doesn't actually offer the best return on rides. With the Uber Visa, you'll earn 4% cash back on dining (including Uber Eats), 3% cash back on hotels and airfare, 2% cash back for online purchases (including Uber rides) and 1% on everything else.
You'll earn a modest $100 welcome bonus after spending $500 in the first 90 days. It doesn't offer the highest return on Uber, but it is a solid choice if you spend across its other bonus categories.
Thankfully, it seems Uber has addressed the glitch. However, some customers may have to wait days or even weeks to see money deposited back into their debit accounts. It's one of the many reasons why we always recommend using a credit card for purchases. You'll earn valuable rewards that you can put toward your next vacation or other savings goal, not to mention the additional consumer protections that come with cards.
Not sure where to start? We recently revamped our beginner's guide to all things points, miles and credit card rewards. Check it out to learn everything you need to know about jumping into the travel rewards game.
To see the rates and fees for the Amex Blue Cash Preferred, click here.