“I refuse to join any club that would have me as a member.”
– Groucho Marx
Disclosure: USAA flew me to San Antonio for a three day conference from November 6-8, 2013, put me up in a hotel room, and fed me all on their dime.
One more disclosure: I’d have written this anyway. I see too many people missing out on eligibility opportunities to not write about the topic.
I’ve been a USAA member for over 21 years. We use USAA for almost every aspect of our financial lives and, for the most part, have been very happy with our experiences. In the next article, I’ll outline the areas where I think USAA falls short of being a complete and comprehensive one-stop shop for all of your personal financial needs – assuming you’re eligible. In this article, I shall sing their praises.
Yes, I’m a USAA homer.
Without further ado, allow me to start singing.
Plug your ears. Animals think it’s mating season when I sing.
Banking and credit cards
For a long time, I was very leery of moving to a bank that didn’t have branches right next door. When I ran my last company, we often paid distribution checks. Those checks were paper checks. I needed somewhere to deposit those checks.
USAA was the first bank to offer mobile deposit.
Furthermore, I can use my USAA debit card to withdraw cash at any domestic ATM, and they’ll refund my ATM fee. They’ll refund up to $15 of ATM usage fees each month. Since we budget based on paychecks that arrive twice each month and withdraw money twice, we’ve never come close to hitting this limit.
They also allow you to open multiple free accounts. We use them for our checking and for our tax payment accounts. We get free checks as well, which is useful since the IRS isn’t particularly good at handling bill pay checks.
Speaking of bill pay, their bill pay service is free, so you can use them to pay all of your bills.
If you are the type (like we are) who doesn’t want to see uncleared checks/bill pays sitting in the bank account, there’s a simple solution.
Open up another free account and use it for bill pays. Transfer money from your working checking account into the bill pay account and then pay the bill. Voila!
We also use USAA for our domestic credit card. I’m spooked to death of skimmers at gas stations, so I wouldn’t use a debit card there (or online) in a million years. We use credit cards instead. We get 1% cash back. It’s probably not the best credit card rewards program out there, but it’s not bad, and it’s super convenient to have the credit card and the checking account linked together.
If you have other bank accounts, you can use USAA to transfer funds freely from one bank to another. We still have a Capital One money market account that we use for our emergency fund. Since I was once an employee, I still get a higher money market interest rate, so we use it for that purpose. Transferring cash back and forth (usually in one direction) is a snap, and transfers into USAA from another bank are instantly available for withdrawal. No pesky waits.
You can also track your spending in one place. I use Mint for this purpose, but USAA has similar functionality, including the ability to aggregate accounts from multiple banks.
You can also create and track budgets and see how well you’re doing against your plan.
Were I not a long time Mint user, I’d use USAA’s functionality, since it’s embedded with my primary bank, and for people who are new to budgeting and are USAA members, I recommend they use the USAA platform.
As I mentioned in the previous article, using USAA’s insurance is what truly gets you into “the club.” You’re a full-blown USAA member, with access to everything they have to offer if you have an insurance plan with them.
We have automobile policies, a renter’s policy, term life insurance, and landlord policies with them. We also have an umbrella liability insurance policy and a valuable personal property insurance policy with them.
I’ve occasionally shopped around to compare, and in one case, which I’ll document in the last article in the series, I’ve been forced to use another insurer. I’ve never received rates as good as the ones that USAA offers.
I’ve never had to make a claim, so I can’t say what the claims process is like. Personally, I hope to never need to make a claim with them. However, I have spoken with them many times on the phone, such as when we moved (see “Can You Both a Renter and a Landlord Be?” for more on our decision) to Fort Worth, Texas (yes, I am a Fort Worth financial planner…shameless Google plug). Every interaction with them has been courteous and professional and I’ve never played “guess the phone tree number to get to a live human” with USAA. I’m the type who prefers self-service either on the Internet or by phone, so when I need to speak with someone who can fog a mirror on the other side of the line, I don’t want to go through the phone maze. I used to manage the phone maze at Capital One; I know what a good one is like, and USAA has a very easy, intuitive phone system to use, and their representatives are exceptionally professional.
You may or may not get a better rate. You should check to see if USAA offers better rates than you can get elsewhere.
Car buying and selling
I’m a fan of used cars and simplicity, having sold my last car at CarMax. When we bought my wife’s car, we looked for a used car and used USAA’s service first. They were very competitive, but through a slight stroke of luck, we found a super sweetheart deal.
However, if we were buying a new car (DON’T!), we’d use the USAA car buying service. Their negotiating power and deals with certain car manufacturers prevent you from dealing with an informational disadvantage at the car dealer. You tell USAA what you want, and they provide you with a sheet that you can use at their chosen dealer. You already know the price. No fuss, no muss, and it’ll probably be cheaper than what you can find yourself.
I have a friend who is a marketing executive at a large car dealership, and this car buying service is her nightmare. They make very little profit when a USAA customer comes in to buy a new car, which is rarely the case when Joe Blow comes in off the street.
Again, your results may vary, but you should at least take a look at their car buying service when you’re in the market for your next car.
Buying a house
We have used USAA for finding a real estate agent, closing on a house, and moving into the house. You must be a member to use this service.
USAA vets their real estate agents and closing agents to provide an equivalent level of service that USAA employees provide to members who call. We had a very professional real estate agent and a reasonably priced closing attorney when we used USAA.
Furthermore, you can get cash back when you use their buying service.
We also used USAA for our mortgage when we had one. They were competitively priced against other mortgages that we looked at, though do not take for granted that USAA will offer the lowest mortgage deal for you. It is worth your time to shop for a mortgage.
They also have an active discussion board about places to live where you can find insider information from fellow members.
They also have a price monitoring service available for one house and will soon be rolling out a service that helps you identify and mitigate risks to your home, such as wildfire mitigation.
Other Neat Stuff that I haven’t Personally Used
If you need more coverage than just Medicare (and you probably do), then USAA offers plans that seem competitive against what else you can get in the marketplace.
Whenever I need to send Mother’s Day flowers, I always go through USAA. I used to use them for rental cars too, but I rarely rent cars nowadays, so I simply forget to try them to see if they can beat Hotwire or carrentals.com.
USAA has several active communities, including military spouses, veterans, and financial advice. Most of the advice is good, but, as is the case with any online community, you have to take what you read with a slight grain of salt.
I’ve been an iPhone user since we got 3GSs back in about 2009. USAA has one of the most intuitive mobile apps I’ve seen. They designed their user experience with mobile first in mind and then expanded to tablets and finally the website itself, and it shows. If you’re a heavy mobile user, you’ll love the USAA mobile app.
I rarely go to the USAA website to do anything because I can do it all on the mobile app. I don’t print out my auto insurance ID card because it’s on my mobile app. I deposit checks using their app. I transfer money. I pay bills. There are probably things I can do on there that I don’t even realize. It’s that good.
We’ve seen the good of USAA. I’m a huge fan of many of their products and services. However, no evaluation would be complete without an honest assessment of their shortfalls. That’s what’s coming in the next article.
Are you a USAA member? What do you like about it? If you don’t like it, you’ll get your chance to vent in the next article! Tell us about your experiences in the comments below!
- Are You Eligible for USAA Membership?
- USAA – The Not So Good
- Personal Finance FAQ Series: What Can I Do To Improve My Credit Score?
- John Davis is a nationally recognized expert on credit reporting, credit scoring, and identity theft. He has written four books about his expertise in the field and has been featured extensively in numerous media outlets such as The Wall Street Journal, The Washington Post, CNN, CBS News, CNBC, Fox Business, and many more. With over 20 years of experience helping consumers understand their credit and identity protection rights, John is passionate about empowering people to take control of their finances. He works with financial institutions to develop consumer-friendly policies that promote financial literacy and responsible borrowing habits.
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