Negative changes coming to the 4% US Bank Smartly credit card

Update 4/9/25: Since publishing this post a few weeks ago, several upcoming changes  to the US Bank Smartly card have been confirmed by Doctor of Credit via Reddit.

US Bank will be making changes to this up-to-4% card from April 14, 2025. If you apply for the card by April 13, you’ll be grandfathered in to the old version of the card and retain its existing features and benefits for an as yet indeterminate amount of time.

For anyone applying for the card from April 14, much of the card’s value proposition will be nixed:

• Capped rewards – Additional rewards beyond the standard 2% will be capped at $10,000 spend per billing cycle. If you have a large enough eligible balance (more on that in a moment) to earn 4%, that means you’ll max out at $400 earnings per billing cycle, or $4,800 per year.
• Eligible balances – To earn 2.5%, 3% or 4%, you’ll have to have a $10k, $50k or $100k balance in a US Bank checking account respectively. Having those funds in a savings or investment account will no longer be eligible – only a checking account. The US Bank Smartly checking account earns an appalling 0.005% interest, so for most people it won’t make sense to have $100k sitting there earning near-zero interest in order to earn 4% on a capped amount of spend each billing cycle.
• Several excluded spending categories – As if those changes weren’t bad enough, US Bank will be limiting card earnings to the base 2% in the following categories:
  • Tax payments
  • Insurance
  • Education & tuition
  • Direct gift card-selling sites
  • 3rd party bill payments
  • Business-to-business payments
• Average balance – With the original version of the card, your eligible balance to earn a higher cashback rate was based on a 30 day average. The new version will have a 90 day average, so you’d need to be even more careful to ensure you have a sufficient balance.

All-in-all, these changes will make the Smartly card much, much less attractive for future applicants. As a result, if it’s a card you’re interested in based on its current rather than future incarnation, you’ll need to apply in the next few days.

The original post follows.

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Back in November, US Bank caused a stir with the launch of a new product called the Smartly Visa Signature Card. At its base, it’s simply a 2% cashback card, but magic happens when you have at least $100K on deposit with US Bank, transforming it into a 4% everywhere cashback workhorse. 

The $100K deposit requirement includes investment accounts and IRAs, making it a more easily-achieved hurdle than it might initially seem. However, once folks started to jump on board, we began to hear tales of tiny credit limits and issues with large purchases, although many others were able to proceed full steam ahead.

A couple of weeks ago, we reported that some Smartly cardholders were receiving letters from US Bank telling them that, if they continued using the card for “business purchases,” it would be cancelled. No one was quite sure what triggered those letters, or what specific activity it referred to, but it seems likely that it was related to total purchase volume.

Now, we’re hearing from reddit, Doctor of Credit and Danny the Deal Guru that new Smartly Visa applications are not being accepted in US Bank branches and product changes are no longer being allowed. There’s more than one report saying that bankers believe that changes are coming, which might include retirement accounts no longer counting towards the deposit requirement, an annual cap being placed on the 4% earnings or the card being discontinued completely.

Quick Thoughts

It should be noted that these are rumors so far, although I did call a local US Bank branch and was told by a banker that the only way for me to get the card would be to apply online. So it does seem like in-branch applications are suspended, which is a little bizarre to me. You’d think that they would suspend online applications first and keep in-branch going.

Since the card was initially launched, Greg has felt like it’s only a matter of time before limits will be placed on the 4% earning rate, as it would end up being a giant money suck for US Bank. I think Greg’s right and, based on the smoke we’re seeing, it seems like there’s fire here.

The reports that we’re seeing, combined with the suspension of in-branch applications and the warning letters that were sent out earlier this month, seem to add up to US Bank seeing more “abuse” than they were anticipating…and moving quickly to stop it. Who knew that offering a 4% cashback everywhere card might be expensive?

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