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The AA credit card review

FROM petrol to parts owning a car can be an expensive business but you can make it pay with an AA credit card.

You'll be able to spread the cost of any new purchases with 0% interest for 12 months when you use your AA credit card to pay.

The AA credit card also has a reward scheme which offers points on all purchases made with the card, with double points for spending on motoring. You'll get even more rewards if you're an AA member.

You'll get double points for any motoring spend, which includes parts, repairs, servicing, MOT testing, diesel, petrol and LPG autogas fuels.

AA members will be able to double their points again, earning 1 point per £1 on all spending and 2 points per £1 on motoring spending. If you're not an AA member yet - you can join at any time and boost your points.

One AA credit card reward point is worth about 1p. That might not sound like a lot but it compares favourably to similar reward schemes available at the moment and since you can use the points to buy AA products, including AA Breakdown Cover, shopping vouchers and even cash back, it could be a big money saver.

The AA credit card also has a deal offering 0% interest on balance transfers and money transfers for 9 months.

Since the AA credit card is clearly designed to be used primarily for purchases we'd advise caution when using these deals. Although they could undoubtedly be useful and if you're careful they are perfectly safe (interest trap free) to make use of.

You'll need to be aware of how payments are allocated to different balances on your account though. But if you are, the pitfall is easily avoided - see the review continued section below.

Lastly, the AA credit card is an MBNA card with all the cardholder services that come along with that including online account management and fraud protection.

Interest Rates and Fees
		Notes..
Typical APR	18.9% APR (variable)	The typical APR is the rate most people are offered.
Introductory Purchases	0% for 12 months
Balance Transfers	0% for 9 months Includes transfers to a current account (4% fee)	Must be made within 90 days of account opening to qualify. Also includes money transfers to a current account, but with a 4% handling fee. Payments are applied towards 0% purchases before 0% balance transfers, but when the 0% purchase period ends payments will be applied towards 0% balance transfers before standard rate purchases. After the 0% balance transfer period ends, balance transfers are charged at the standard rate of 20.9% p.a. and money transfers are charged at the standard rate of 22.9% p.a.
Balance Transfer Fee	3% (£3 minimum)	This fee applies to balance transfers. Money transfers will be charged a 4% fee.
Cash Withdrawal Rate	27.9% p.a. (variable)	-
Cash Withdrawal Fee	3% (£3 minimum)	-
Annual Fee	None	-
Foreign Transaction Fee	2.99%	This fee will be charged if you make a purchase or cash withdrawal in a foreign currency.

Rewards
		Notes..
Reward #1	AA Motoring Reward Points	Earn AA Reward points on your spending: - 1 AA point for every £2 spent on purchases - 1 AA point for every £1 spent on motoring purchases. Motoring purchases are considered to be: - Purchases made from any car garage (e.g. parts, repairs, servicing or MOT testing) - Diesel, petrol or LPG Autogas purchased from any petrol station (including supermarkets) - AA products are defined as any AA products or services advertised on theaa.com website, excluding AA Gateways. AA points are redeemable for: - AA Breakdown Cover - AA Home or Car Insurance and other AA products - Offers from selected AA Members Club partners - Motoring and travel essentials (from Sat Navs to suitcases and more) - Treats (wine, days out or high street vouchers) - Cash back. AA point value varies between redemption items.
Reward #2	Double AA Reward Points for AA Members	You must have AA Breakdown Cover to receive double AA Reward points. You can provide your AA Membership number during the application process, OR if you become an AA Member at a later date, you can upgrade your card at any time.

Cardholder Services & Extras
Online Account Management		You can log in to a website and manage your The AA credit card account online. Optional paperless statements are available.
Fraud Guarantee		You will not be held liable for fraudulent transactions online or on the high street, providing you tell the card issuer (MBNA) as soon as you cannot find your card or you notice any unusual transactions on your account.
Fraud Monitoring		The card issuer (MBNA) will monitor your account for any unusual activity and notify you if they suspect any transactions could be fraudulent
Identity Protection
Verified by Visa		An extra layer of security when shopping online. Register and set up a password-protected identity-check when you shop online with participating online retailers.
Purchase Protection Insurance
Purchase Delivery Insurance
Comprehensive Travel Insurance
Travel Accident Insurance
Travel Inconvenience Insurance
Assistance Abroad
Emergency Card Replacement
Other Extras	- 24 hour UK based customer service.
Optional Extras	These are extras that you can choose, but you will have to pay for them. - Payment Protection.

Payments & Payment Details
		Notes..
Credit Limit	£1,500 assumed	Credit limit subject to status.
Interest Free Period	Up to 50 days	For purchases if you pay your statement balance in full and on time every month. There is no interest free period for balance transfers, cheques, money transfers or cash advances - except for those within an interest free promotional offer.
Minimum Monthly Payment	1% (£25 minimum)	If your balance is less than £25 you must repay your balance in full. Otherwise, you must repay the greater of: - £25, OR - 1% of your statement balance before any default charges and interest, plus any default charges and interest on the statement.
Allocation of Payments	Low interest rate balances » Higher interest rate balances	Where there are two or more balances at the same promotional rate they will repaid in the following order: - The one which expires first, Then - If the expiry dates are the same - the one which started first, Then - If the expiry and start dates are the same - the one with the lowest standard rate.
Default Charges	£12	This is how much you will be charged for late payments, returned payments and if you go over your credit limit.

Card Details
		Notes..
Online Application	Yes	-
Card Type	Classic	-
Payment Company	Visa	The company who provides the payment technology and infrastructure to allow you to use this credit card. Retailers and ATM machines displaying the 'Visa' logo will accept this credit card.
Card Issuer	MBNA	The bank who issues this credit card. MBNA Europe Bank Limited Stansfield House Chester Business Park Chester CH4 9QQ
Card Advertiser	The AA	The company who advertises and promotes this credit card.

Review Continued...

The UK's largest breakdown service has turned its hand to finance and the AA credit card is the result: packed with rewards and special offers that could take the sting out of driving.

Discounts on Driving

By picking up reward points as you spend on your AA credit card you could redeem them for AA home or car insurance, motoring products such as roof racks, treats like days out or even cashback.

With the AA credit card reward scheme you'll get 1 point for every £2 spent on ordinary purchases and 1 point for every pound spent on motoring purchases.

If you're an AA member (i.e. you have AA breakdown cover) you'll get 1 point for every £1 spent on ordinary purchases and 2 points for every pound spent on motoring purchases. If you're not currently an AA member you'll be able to upgrade your card should you ever become one.

Motoring purchases are: services from a car garage, such as an MOT; petrol, diesel or LPG autogas from any petrol station and AA products.

The value of points varies depending on how you redeem them but 1 point is roughly equal to 1p. So if you spend £2000 on your AA credit card - half on purchases and half on motoring purchases - you'll get £15 to spend. If you're an AA member it'll be £30.

That might not sound like a lot but it certainly won't hurt and with 0% interest on motoring purchases until this time next year too you should have no problem racking up the points.

0% on Purchases

The AA credit card offers 0% interest for the first 12 months on all new purchases.

If running a car is one of your major expenses this deal could ensure that you never run out of cash for the essentials you need to stay on the road and it'll also keep you covered if something goes wrong unexpectedly and you need to spend to get it fixed.

However, due to the complicated way credit card issuers allocate payments to your account to various balances you'll need to approach this offer with caution if you also intend on making use of the 0% balance transfer offer - read on for a further explanation.

0% on Balance Transfers and Money Transfers

With 0% interest on balance transfers for 9 months as well this could be the perfect credit card to start repaying old debts.

However, payments will be applied to 0% rates first, with the 0% deal which expires first being repaid first. This means payments made to your account during the first 9 months will go towards repaying the balance transfer balance at 0%.

Once the 9 month 0% balance transfer ends however, payments will then go towards clearing 0% purchases first for the next 3 months (until the 0% purchase period ends), which means any balance transfer left on your account after 9 months will start accruing standard interest rate charges and become 'trapped' behind any 0% purchase balance.

In the case of money transfers, the same problem applies. However, if you can avoid it, the money transfer could be a good way to make some extra cash from any unused credit by transferring it to a high-interest account.

While this sounds overly complicated, there are two simple solutions. One is to simply only use the card for either 0% balance transfer or purchase spending. Second is to make sure you clear any balance transfer by your 9th statement and then refrain from spending until you've paid off any remaining balance transfer.

There is a 3% handling fee on balance transfers to be aware of and a 4% handling fee on money transfers. Using these services on the AA credit card is not advised outside of the 0% period - there's a typical interest rate of 18.9% p.a. for balance transfers and 20.9% p.a on money transfers.

You must make any money or balance transfers within 90 days of applying for the card.

Fraud Protection

While the fraud protection offered with the AA credit card isn't the most comprehensive service we've ever seen, it does offer significant protection and active fraud monitoring on your account.

There's also online account management and a 24 hour customer helpline.

Not Suitable for...

Like most cards the AA credit card isn't suitable for cash withdrawals or making transactions abroad.

Cash withdrawals will be subject to a 3% fee and the withdrawal will start to accrue interest at a rate of 27.9% p.a. as soon as the transaction is made. Any foreign transactions will be subject to a 2.99% fee.

All in all, the AA credit card offers great rewards for drivers and particularly AA members.

Apply Online for The AA credit card »