Robinhood launched a 3% cash back card. US Bank said hold my beer.
The no annual fee U.S. Bank Smartly Visa Signature Card will earn:
- 2.5% if you have $5,000 – $49,999 on deposit with U.S. Bank
- 3% if you have $50,000 – $99,999 on deposit with U.S. Bank
- 4% if you have $100,000 or more on deposit with U.S. Bank
4% Back Beats 2x Transferable Points
If you regularly redeem your points to travel domestic coach, you’re probably better off with a 2% cash back card. Don’t worry about award availability, just buy the tickets you want, and you’ll even earn miles (and status credit, which of course Delta and starting next year Alaska also give you on awards).
Personally, I use my miles mostly for long haul business and first class travel which makes transferable points amazing. I still try to earn at least 2 points per dollar on all my spending.
Putting spend on an airline or hotel co-brand card can still make sense to generate credit towards status, if that’s a goal you have, but it’s a tough sell for the rewards. (I do put my Hyatt spend on the Hyatt card.)
Still, even compared to cards earning 2x in transferable points, it’s going to be tough to beat 4% cash back even for the premium cabin award travel enthusiast. For those with significant investable assets to park, this is going to be the new baseline.
This is clearly superior to Bank of America’s Preferred Rewards that allows similar balances on deposit to generate a 2.625% return on credit card spend, which some do.
Pursuing This Offer
There were reports that the card will launch today, but apparently it is still days or weeks away.
US Bank is launching a 4% cash back on everything credit card as long as you hold a $100k balance (can be an investment account)
I got an email saying it's launching in the next few weeks. pic.twitter.com/pRCiaGJrLM
— Sheel Mohnot (@pitdesi) October 21, 2024
Obviously you’re not going to want to park cash in a low-earning savings account to generate the higher credit card rebates. You want to have investible assets that you transfer over from another bank or brokerage, think low cost stock index funds or exchange traded funds you already own simply moving over to a U.S. Bank brokerage account.
Bear in mind you’ll pay a $50 annual fee for a brokerage account unless you have $250,000 in assets held there. The U.S. Bank Smartly Rewards program, though, contains some account fee waivers and also has added offers for credit card spend, though it’s not clear whether those will apply to spend on this cash back card.
Of course you may then want a checking account with them then, too, for which there are signup bonus offers.
Is This The New Benchmark?
If you go this direction, I’d still prefer earning transferable points at 3x and beyond! And obviously not everyone will be in a position to maximize the benefit of this offer. But it will be a power move for some. Of course we’ll have to see the full terms and conditions once the product is live to be certain.
Naughty, naughty, not telling the whole truth:
The BofA Premium Rewards card offers 2% (which works out to 3.5% for Platinum Honors) for dining and travel categories with no cap which, assuming U.S. Bank gives 4% with no cap on those categories, isn’t quite as good as U.S. Bank but realistically, one would have to spend a lot in order for the 0.5% to make a difference.
As well, the BofA card gives a TSA Pre-Check/Global Entry credit which is worth a few bucks as well as a $100 per year travel credit.
More importantly, BofA’s brokerage offerings, while not up to the level of Charles Schwab, are good enough to park a $100K or so and not lose anything on the brokerage SOTG. How good are U.S. Bank’s brokerage options?
I doubt that U.S. Bank will offer 4% uncapped across all categories because that’s pretty rich, likely eating up all the interchange fees and then some.
Every picture tells a story, if the artist bothers to complete it.
For most of us, it’s all about the sign-up bonus.
So if I pay $50k estimated tax payment annually at 1.90% and get 4% back and pocket the 2.1%… I’m in.
US Bank was very difficult to deal with when moving an IRA elsewhere, and no local bank. They mailed an outdated form, and auto-renewed the CD at a terrible rate, and charged an early termination fee on the renewed IRA because of their incompetence by being unable to execute a transfer in a timely manner. If you don’t have a nearby branch, carefully consider if you will have issues working with them remotely. This offer isn’t very attractive if you don’t have money on deposit with them.
Our mortgage is with US Bank. Presume that does no good.
Use the BofA Elite card and you get an additional 25% when booking any flight. 2.625%—>3.28% and 4.92% for travel and dining.
Website shows a 3% foreign transaction fee. It cools my interest immediately.
https://www.usbank.com/credit-cards/bank-smartly-visa-signature-credit-card.html?ibid=OTHI_72833
Not a game changer, not at all.
Not a good deal
@Dave W – so use a different card for foreign transactions?
Wonder where there could be a threshold where US Bank can shutdown an account for supposed “rewards abuse”
Years ago used to go hard on a Amex blue cash card that gave unlimited 5% cb at grocery stores and would keep buying $500 visa gift cards with a 6 dollar fee per card, to earn $25 cb (then buying money orders to redeposit the money) and kept doing this across tens of thousands worth of cards per month (earning thousands in cb every month) until one day Amex shut me down!
What a terrible name for a product. Smartly
@Gary my fault for setting me up for the Duh! answer. With more than 6 months a year out of the US, I have a reduced portion of my (small for many here) spend in the US. Very little of my US spend is $25,000, so it is less than my current base interest only by a few tenths of a percentage point. But, on $100,000 to get 4%, it makes my math tougher to justify. I will look further in the future.
@Luke There is almost certainly language in their T&Cs that not only gives them the right to cancel for any reason, but also to ban the methods used for manufactured spending. Remember, card companies know your annual income. If you suddenly start charging and paying off far more than you’d be able to manage on your declared income, they will understandably get suspicious and cut you off.
4% is great. And the self directed investment account is good too. I was able to move the funds to investment account and purchase VUSXX with a $25 fee. You can also get GABXX with no fee.
Checking, Savings, and Self Directed Investment account were easy to open. Also got 25k credit line.