U.S. Bank has announced that it’ll be launching a new credit card soon called the U.S. Bank Smartly Visa Signature Card. It’s a card that’ll earn 2% cashback everywhere which isn’t particularly exciting seeing as there are many cards on the market with that earning rate.
What does make it far more eye-catching is the fact that it’ll be possible to boost the total earnings up to 4% cashback.
We don’t know yet when this card will be launched, but U.S. Bank has a landing page for the card where you can join a waitlist.
As mentioned above, the card will earn 2% cashback as standard. You can then boost the cashback rate if you have a U.S. Bank Smartly Savings account and have the following amounts deposited:
- 0.5% bonus cashback (i.e. 2.5% total cashback) – Have a qualifying balance of $5,000-$49,999
- 1% bonus cashback (i.e. 3% total cashback) – Have a qualifying balance of $50,000-$99,999
- 2% bonus cashback (i.e. 4% total cashback) – Have a qualifying balance of $100,000+
As you can see, you’ll have to have $100,000 deposited with U.S. Bank in order to earn the highest 4% cashback rate. That could be a steep ask for many people, but you don’t have to hold that amount in cash in a Smartly Savings account. Instead, you can have $25 in that savings account and the remainder in any mix of the following types of account:
- Consumer checking account(s)
- Money market savings account(s)
- Savings account(s)
- CDs and/or IRAs
- U.S. Bancorp Investments
- Personal trust account(s)
That’s useful because the Smartly Savings account is currently only offering 4.1% APY. Although that’s a solid rate, there are many savings accounts out there offering at least 5.1% APY.
$100,000 in total deposits matches the amount needed to earn Platinum Honors with Bank of America. Platinum Honors provides the opportunity to earn up to 5.25% cashback depending on which cards you have, so if you only have $100,000 to deposit then it could make more sense to go the Bank of America route. However, if you have at least $200,000 in eligible savings, depositing $100,000 with both U.S. Bank and Bank of America could be worth doing if you’re able to generate a lot of spend on your credit cards and don’t want to cycle your Bank of America card(s). What’s worth remembering though is that Bank of America cards only earn up to 5.25% cashback in certain categories, whereas this Smartly credit card will offer 4% cashback on all purchases.
The cashback will be redeemable at full value when redeemed as a deposit into an eligible U.S. Bank deposit account. If you want to redeem the cashback (earned as points) as a statement credit on your credit card or through other redemption options like gift cards, you might not get that full value.
If you end up applying for this card, something important to be aware of is that if you don’t earn or redeem the points on your account for 12 consecutive statement cycles you’ll lose your entire points balance. While some card issuers might close accounts due to inactivity after a year, I can’t think of any that will forfeit all your points/cashback earnings too. That’s a disappointing policy and one that’ll mean you won’t want to accidentally sock drawer this card. If you’re earning 4% cashback then that might not be an issue as you’d likely be putting at least some spend on it, but it’s a policy that’s worth being aware of.
When U.S. Bank launched the Altitude Reserve card back in 2017, they were initially very sensitive to people buying gift cards using their mobile wallet to earn 3x points per dollar. It’ll be interesting to see if they’re quite as sensitive to people racking up 4% cashback on this new Smartly credit card once it’s launched.
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So if you forego an extra 1% interest on $100,000, that’s $1000 you have to overcome. If you earn an additional 2% cash back with the card, you need to spend $50,000 before breaking even.
If you account for the fact that interest is taxable and cash back isn’t, assuming 30% marginal taxes, you need $35,000.
If you can transfer investments to US Bank and the fees are comparable, then this becomes a potentially attractive option, but I didn’t delve further than this article into that.
Anyone know if a joint account will allow 2 players to get the increased rates?
I put too much spend on SUBs that get 10x, I know it’s apples and oranges but seems like over 70% of my spend this year has been on SUBs, so I have no interest in this card, but good if you want one card.
US Bank’s investment options are pretty gross though – their self-directed account has a $50 AF. Adding insult to injury, they still have a per-trade fee and an oh-so-generous 100 free trades per year. BofA/ME is at least free.
Transferable point strategies can yield higher values. However, if your objective truly is cash back and you’re doing actual spending (not MSing) and your qualifying balance is via an investment account (and not savings), this is attractive. Indeed, this might be a better card than the Altitude Reserve for some.
Two big questions are whether the rate will be uncapped and whether the card will have foreign transaction fees.
I agree with Captain Greg that a caveat must be made regarding BofA’s Cash back opportunities.
To be clear, the 5.25% isn’t everywhere, right? The better comparison might be 2.625% vs 4%. When the alternative is a 2% card, this new card seems like an outstanding deal. Wouldn’t you agree?
That’s correct, I should’ve clarified that in the post – I’ve just added that regarding the 5.25%. This card would indeed be an excellent deal on everywhere else spend for minimal effort. Depending on the transaction value/type of their everywhere else spend though, some might prefer buying fee-free Visa and Mastercard gift cards at office supply stores when there are sales to earn more than 4% cashback on other types of cards.
And I think 5.25% CB is only for $2500 per quarter on some restricted categories. Citi Custom Cash 5 TYP or 5.55 TYP with Rewards Plus is an easy win to me.
BoA 5.25% on some niche categories with small cap is overrated imo. But BoA 2.625% with everything however is very good.
Yes 5.25% on the bofa ccr is only in select categories and up to 2,500. I have the card and it is used up in a purchase or so.
One of the categories is online purchases which is so easy these days with order online and pickup in store. It is also easy to get multiple of the cards from BoA my family has 5 of these cards.
US Bank still has fees on their investment program as well, that most including Merrill Edge has eliminated and also a $50 AF. So, you’d definitely have to weigh if possibly paying more for your investments is worthwhile for a card that likely won’t remain at that rate for too long.
I think the best I can do now is charge taxes to an Amex biz blue and then buy tix at a value of 1.5 c for 3 pct earnings at a cost of 1.82-1.87 pct. This seems like a much better deal as I can deposit the money right away instead of waiting until I have a trip… or is there a better deal out there?