State Farm Credit Card Review: Probably Best to Stick to Insurance

state farm

Confused already? I’ll start by saying that I assume most people don’t even know State Farm issues credit cards.

After all, the company is much better known for its insurance products than anything else.

But State Farm does indeed issue credit cards, mortgages, and other types of loans, while also offering checking and savings accounts via its State Farm Bank entity.

The way State Farm sees it, why should they stop at insurance when they can provide/cross-promote related financial instruments to their millions of customers – and make a killing doing so?

How Do State Farm Credit Cards Stack Up?

  • State Farm offers four different credit cards
  • Which is pretty surprising for an insurance company
  • Unfortunately none of them are game-changers
  • So it might be best to look elsewhere as you may have guessed

Well, there are four State Farm credit cards currently offered by the company, including a rewards card, a low rate credit card, a student credit card and a business credit card.

The State Farm Rewards Visa offers between 3% back on insurance premium payments (up to $4,000 annually), and 1% back on all other purchases.

The business card version, known as the State Farm Bank Business Visa, has a 3-2-1 structure with 3% back on insurance premium payments (same $4k annual restriction), 2% back on travel and office supplies, and 1% elsewhere.

The so-called State Farm Good Neighbor Visa comes with 0% APR or 12 months on balance transfers with no annual fee, but no rewards program. And obviously there’s a 3% balance transfer fee. Nothing too exciting there.

Finally, the State Farm Student Visa is geared toward those in a post-secondary educational institution, otherwise known as…hmm…college!

It offers the same 3% back on insurance, but only 1 point for every $2 dollars spent elsewhere. In other words, you get a cash back rate of 0.5%. Of course, student cards are always lackluster so it’s not surprising.

Redeeming State Farm Loyalty Rewards

State Farm rewards

  • Their credit cards earn State Farm Loyalty Rewards
  • Which can be redeemed for statement credits and gift cards
  • Or use them toward a State Farm bill
  • You can also deposit them in a State Farm bank account and earn a bonus redemption

The points, known as State Farm Loyalty Rewards, can be redeemed to pay your State Farm bill, used for a statement credit or gift cards, or deposited into a State Farm bank account.

If you go the last route, they offer a “redemption premium” (get it?) if you redeem 25,000 points or more into an eligible account, which includes State Farm Bank Checking/Interest Checking accounts and State Farm Visa Gift Cards.

Points Redeemed / Premium

– 0-24,999 points – No Premium
– 25,000 – 49,999 – 25% Premium
– 50,000 – 99,999 – 35% Premium
– 100,000 – greater – 50% Premium

Some of their credit cards also have a FixPay option, where you get to choose the number of payments and corresponding Annual Percentage Rate (APR) you’d like to pay related to a large purchase or unexpected expense.

Nothing groundbreaking really, just a payment plan to help people tackle their credit card debt if they can’t do so on their own.

Again, nothing to get too excited about given many credit card issuers offer 0% on both for as long as 24 months these days.

And none of their offers are fixed-rate credit cards, another negative if you’re after low APR.

The Verdict on State Farm’s Credit Cards

  • Other than offering 3% back on insurance payments
  • There isn’t much else here aside from the redemption bonus
  • Assuming you have a State Farm bank account or gift card as well
  • You can probably do better elsewhere

In closing, a State Farm credit card isn’t really something I would seek out, as there are much better deals in basically every class of credit card they offer.

There are plenty of cards that earn 2% cash back on all purchases, every single day of the year. And others that earn 5% in common categories that are rotated annually.

So you’ll probably do better with one of those cards over the ones offered by State Farm.

There are also cards that allow you to transfer your points to leading frequent flyer programs, hotels, and more, as opposed to only being able to redeem for a gift card or statement credit.

State Farm is smart (I suppose) to offer credit cards alongside their other product offerings, but you’re probably better off shopping elsewhere for your credit card needs.

Would you go to Chase or American Express for car insurance? Probably not, even though some of them actually offer primary coverage as a benefit.

By Colin Robertson

Colin created this blog after spending several years in a job that required him to scour credit reports on a daily basis. His goal is to help individuals better understand their credit and get the most out of credit cards.

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