Alternate Bank Program Showdown Part 2: USBank vs Bank of America vs CapitalOne vs Barclays



Our second installment in this series covers USBank. Starting out as a regional bank in Minnesota, this is currently the 7th largest bank in the US. Although it still does not have a presence in all states, USBank offers a large portfolio of enticing credit cards, many of which featuring competitive rewards programs, which will be covered in this post. As before, please keep in mind that I am covering each of these bank programs as unified systems, but the reality is that most of these rewards are tied to a particular card and cannot be pooled or transferred between accounts save for a few exceptions, which I will indicate when appropriate.

 
 
 
 

USBank Cards that Earn Rewards
Earning USBank Rewards
Spending USBank Rewards
Rewards Expiration
USBank Rewards Program Summary

 
 
 
 

USBank Cards that Earn Rewards
The following is a list of the cards, which earn USBank rewards:
Altitude Reserve*
FlexPerks Gold American Express
FlexPerks Travel Rewards
FlexPerks Business Edge Travel Rewards
FlexPerks Select+ American Express

*Applications are open only to current USBank customers

Unlike Barclays, USBank has a standard mix of cards – from introductory to premium – with varying annual fees. Their major credit card currency is FlexPerks with the Altitude Reserve, which is the issuers’ top-tier card, using a separate program called Altitude Points. Despite the seemingly different programs, you are free to transfer FlexPerks TO Altitude Points, but not the opposite. Both personal and business cards are available for FlexPerks earning, although the Altitude Reserve is currently only offered in a personal version. For reference, this card does not have a direct competitor – it is placed somewhere in the middle between the Big Three Banks’ top-tier and mid-range cards (such as CSR and CSP from Chase, Platinum and PRG cards from AMEX, and Prestige and Preferred cards from Citi) by offering a generous travel credit, but fewer ancillary benefits despite an annual fee that’s almost as high. As usual, the details for the cards are illustrated in the spreadsheet below:

USBank Summary

Note that USBank’s top-tier card – the Altitude Reserve – is not directly available to those without a USBank relationship. This was their strategy when the card was first launched in 2017 but they seem to not have moved beyond this restriction despite it being available now for over a year. Fortunately, there are many accounts and ways you can qualify for this if you’re interested, but keep in mind that your eligible account must technically be open for a minimum of 5 days prior to being allowed to apply. This includes:

  • Checking or savings account
  • Certificate of deposit
  • Mortgage
  • Home equity loan or line of credit
  • Auto/Boat/RV loan
  • Personal loan
  • Private banking account
  • Consumer OR business card issued by USBank
  •  
    All of the cards with an annual fee do not carry any foreign transaction fees, which is a bonus for frequent international travelers. Being free, the FlexPerks Select+ card, however, comes with a 2-3% transaction fee that depends on the currency you use for your purchase. Contrary to the preferential rate that can be obtained for the Citi Prestige, I’m not aware of any annual fee reduction that is available from USBank for any of their cards.

    Similar to my review of other cards available from the Big Three Banks, take note that the Altitude Reserve comes with a built-in travel credit, which is very generous and accounts for over 80% of its’ annual fee. You are able to use it towards any purchases from merchants classified as travel, including direct purchases from airlines, hotels, car rental companies, taxis, limousines, passenger trains and cruise lines. Note, however, that this card’s perks such as airport lounge access and in-flight Wi-Fi, are more limited and are really geared towards casual travelers rather than road-warriors. Fortunately, this card still offers reimbursement for Global Entry/TSA Precheck. Again, despite the high upfront annual fee, the Altitude Reserve is either free or can even net you a large return, depending on your use and travel habits. The effective annual fee is just 75$ after the travel credit, which is the lowest of any other premium card. Thus, I think the Altitude Reserve is definitely a worthwhile consideration for the right person and can be one of the most valuable cards in your wallet, especially if you stick exclusively to USBank’s rewards program.

     
     
     
     

    Earning USBank Rewards
    As noted in the section above, the majority of the cards earn FlexPerks with the exception of the Altitude Reserve, which earns Altitude Points instead. These are tracked differently; you are able to pool your FlexPerks together and transfer them TO the Altitude system but not the opposite. So, while USBank does not have a truly unified program like the Big Three Banks we covered previously, it comes very close. The ability to earn points is summarized below:

    USBank Rewards Earn

    As you can see, the potential earning categories are broad and are generally well represented although, compared to Citi, USBank does not have an entertainment category. As the most basic and free card, the Select+ product is no-frills: you earn 1 point for each dollar of spending, regardless of the category. The Gold Amex card rewards travel, dining, and gas purchases, while the Business Edge and personal Travel Rewards cards have a very interesting twist by offering 2x points for the category with the most monthly spend out of three choices, as well as cell phone purchases. Both products give additional rewards for airline and gas station purchases with the main difference between the two being that the business card offers office supply stores for your third category, while the personal version counts grocery spending instead. Either of these can be quite useful, especially if your spending tends to fluctuate between categories throughout the year but, in order to take maximum advantage of this feature, you would ideally need to strategically minimize your spending in the other two categories to avoid averaging out your earnings in a given month.

    Finally, The Altitude Reserve is, at first glance, not that attractive – it earns 3x points on travel categories but does not offer dining perks like the Chase CSR. However, it really shines when you consider that it also allows 3x bonus points on mobile wallet spend. This is actually huge as mobile wallets are exponentially growing in acceptance and you can frequently use them not only for in-person payments such as the grocery store and fast-food places, but with online merchants such as GrubHub and Kayak and Fandango! A key consideration with this is the mobile wallet ecosystem that you are currently in or are thinking of joining (Apple Pay, Samsung Pay, Google Pay, or Microsoft Wallet) as the number of places that accept each one can vary widely. Additionally, I would argue that Samsung Pay in particular has a leg up on its’ competitor by offering not just NFC support, but also allowing you to pay for purchases in most stores by mimicking your credit cards’ magnetic stripe with a basic card reader. If you want to learn more about this technology, you can read about it here on their site as this is outside the scope of this review. Suffice it to say that with a little strategic planning and the right mobile wallet and technology, you could end up with a credit card that gives you almost unlimited 3x points back on all your purchases, which is truly revolutionary and a great reason to consider jumping through USBank’s hoops for this product.

    To finish up, let’s cover the category definitions that USBank uses:

    The Hotel and Airfare Travel category includes the below:
    “Merchants who classify their business as a travel category transaction (such as purchases made directly with airlines, hotels, car rentals, taxicabs, limousines, passenger trains and cruise line companies)”

    Mobile Wallet purchases are defined as:
    “The method of paying for a transaction by use of a mobile device (in-store, in-app or online) and includes ApplePay, Samsung Pay, Android Pay, Microsoft Wallet. If the transaction is an eligible mobile wallet transaction and an eligible travel category transaction, additional Points will only be awarded for one of the transaction types (Points will be applied as mobile wallet, not travel).”

    Dining purchases are defined as:
    “Any merchant classified as a restaurant. Purchases made at a restaurant may not be recognized as a restaurant, and will not qualify for additional Rewards.’

    Gas purchases are considered to be:
    (You guessed it!) “Any merchant classified as a gas station.”

    By this point, I think you get the idea and can see that, quite annoyingly, USBank has a circular definition by stating that a given category is defined by its classification, by which they really mean the merchant code used by that vendor. Thus, I will not cover the other categories beyond this. Given that they are this picky and conservative with category definitions, unlike other banks, I do not know if it is worth giving their call center a try and asking that they reward you missing points in the case of a miscategorized transaction, but your mileage may vary on this. I would love to hear from you if you had a case involving this and what their response was since I am still relatively new to their program.

    To make matters worse, USBank is basically as bad as Citi in terms of figuring out which purchases qualify for category bonuses. There is no breakdown of the number of points earned by transaction, no way of seeing pending points, and you have to wait until your statement closes to see the total number of points that were awarded. Once it closes, you can use their ‘Spend Analysis’ tool to at least see the general categories assigned to each purchase, as shown:

    USBank Rewards Earning Summary

    However, this is certainly not very user-friendly, especially if you put heavy spend in multiple different categories on your card or have multiple cards! This would be, by far, the main issue I would ask them to fix in the future. Thus, my advice, especially for big purchases that you expect will earn extra points, is to make a small transaction with the same merchant well in advance to ensure that the points post correctly or use a different seller that you know has gone through without a hitch in the past. This will save you a lot of calls and potential headaches (and likely denials) down the line.

    I will finish this section by adding that in a cue from Citi, USBank does not currently offer any ability to each extra points for shopping through a portal or via online offers, apart from the rare directly targeted mail and e-mail promotion.

     
     
     
     

    Spending USBank Rewards
    Now, onto the fun part! By now you’ve hopefully amassed a ton of points from maximizing strategic credit card spend and getting in on a record high sign-up bonus, and are eager to redeem all that hand work for a first class ticket. Not so fast – there are some additional quirks to note. Let’s begin with another spreadsheet, delineating what each USBank Point is worth:

    USBank Rewards Spending Summary

    It really doesn’t get any simpler! All points are created equal in their redemptions value no matter which card you earn them with. This actually did not use to be the case, but as of 2018 USBank re-aligned all of their rewards redemptions. I am still not sure why FlexPerks is technically considered a separate program from Altitude Points – perhaps there are future plan in the works – but, at least for now, you can consider them basically equivalent, with one exception noted below. Keep in mind that USBank does not offer any options for transferring points to airline partners – your points basically act as either a cash back vehicle or can be used to directly purchase travel. Looking back at our spreadsheet, it is clear that maximum redemptions involve travel purchases with the other options yielding an average of only 1 cent per point. An interesting feature is the option of using 35,000 points to pay for the annual fee on the Altitude Reserve card – as this number of points is otherwise worth a minimum of 350$ this is not a great redemption, but it becomes much more attractive if you have multiple authorized users as the point amount required does not change.

    Another recent feature regarding redemptions is also worth mentioning: you can make a choice of either getting slightly more than 1.5 cents in value per point by taking advantage of a 25$ incidental airline purchase allowance, or prioritize convenience by utilizing USBank’s Real-Time Rewards instead. The credit works only on airfare purchased directly through the dedicated Travel Center portal. For each ticket redeemed in this way, USBank will credit up to 25$ for eligible expenses such as baggage fees, food and drink purchases, or seat selection fees, made with one of the points-earning cards on the day of award travel. To receive this credit, USBank requires you to call member services at 877.978.7446 within 90 days of a qualified purchase. Once the request is approved, you will receive a statement credit within 4 to 6 weeks for the amount, up to a maximum of 25$. Maximizing this credit by purchasing two one-way tickets instead of a round trip is highly recommended, especially if each ticket is half price of the round trip fare!

    If this sounds like too much work to bother with, you can alternatively use Real-Time Rewards, which is a program that requires you to enroll your cell phone number. A text message for each approved qualified purchase made with your card will be sent to you, asking if you want to use your points for an immediate statement credit. This option can be used for all of the below with any of the FlexPerks cards or the Altitude Reserve:

    US Bank Real Time Rewards Categories

    A benefit of this option is that the statement credit is nearly instant and allows you to use any method for your travel purchase, as long as it is classified correctly by the merchant. Note that this redemption method does NOT qualify for the 25$ travel allowance, so you cannot double dip. Additionally, you can manually alter the qualifying amounts for redemptions but the absolute minimum is 10$ for most categories. USBank enforces separate minimum cut-off for lodging purchases at 500$ and car rentals at 250$, which cannot be changed. Note that you must have all of the points available in your account – you cannot do partial redemptions. The number of points required for Real-Time Rewards is based on the spreadsheet values above, with travel redemptions offering the best rate of 1.5 cents per point.

    Actually, if you account for the fact that the airfare booked with either of the above methods is treated much like any other ticket that you purchase and earns both award miles and award dollars from the carrier, you get more than 1.5 cents in value. Your ultimate value will vary slightly based on how many extra miles you earn but it’s only fair to account for them when figuring out the true net redemption value that you receive. However, it is also possible to inadvertently book basic economy fares, especially with the Travel Center, which may negate any of the above additional mile-earning benefits, depending on the carrier (looking at you, United!), and may come with nasty surprises such as inability to select a seat without paying extra. My advice for this is to always double check the fare code of the ticket you purchased with points and reference these with the fare codes for your carrier; if you risk getting stuck in basic economy, you have 24 hours to change or cancel your purchase.

    Beyond travel, USBank lets you use points for gift cards and statement credits at a flat value of 1 cent per point, adding some flexibility, but does not offer quite as many opportunities to redeem your points as Citi. Similar to many other programs, they also allow you to use points for merchandise purchases. While you may get up to 1 cent per point with this, there is also the possibility of getting significantly less. As such, I generally advise to avoid using this option.

    To finish this section, I will add that USBank is fortunately not as stingy as Citi and has not been known to send 1099-MISC forms, characterizing redeemed FlexPerks or Altitude Points as income. That being said, I would still be conservative and avoid excessive redemptions per calendar year as this may change at any time and there is nothing that prohibits them from doing so.

     
     
     
     

    Rewards Expiration
    Unlike many other issuers, USBank drops the ball here and makes FlexPerks expire 5 years after they are earned. This is unfortunate but at least they give you a sufficient amount of time to collect and use them. In one of the few differences between the two programs, Altitude Points do not expire as long as your account is current. Both programs take away all your points immediately if you close your account – there is NO grace period.

     
     
     
     

    USBank Rewards Point Program Summary
    Whew, you made it to the end and now know as much as I do about all the intricacies of USBank’s FlexPerks and Altitude Points! I hope this was instructive and serves as a helpful reference guide for you now and in the future. Despite some of this program’s quirks, I think it has a lot to offer someone interested in travel. Based on everything I’ve covered, I can summarize the advantages and disadvantages of the program in the following:

    MileNavigator Happy Face

    • Get up to 1.5 cents per point and an additional 25$ allowance for airline incidentals on day of travel with each award airfare redemption from the Travel Center
    • Altitude Points (but not FlexPerks!) never expire
    • Unique bonus earning categories such as mobile wallet purchases with Altitude Reserve, and one out of three possible categories, as determined by your highest monthly spend, on FlexPerks Travel Rewards cards
    • No 1099-MISC form for redemptions

    MileNavigator Neutral Face

    • No Entertainment bonus earning category
    • Can redeem 35,000 Altitude Points in lieu of annual fee on Altitude Reserve card, regardless of number of authorized users
    • Can use Real-Time Rewards option for redeeming points instantly for a statement credit
    • Points expire immediately upon closing card account
    • Cannot apply for Altitude Reserve card without existing USBank relationship

    MileNavigator Sad Face

    • FlexPerks points expire 5 years after they are earned
    • Difficult and not user-friendly method for tracking number of pending or earned points
    • Narrow and circular definitions for bonus-earning categories
    • No bonuses given for banking relationship
    • Lack of transfer partners

     

    Please keep in mind that I did not have time to include any of the additional benefits of having cards with USBank nor many ancillary benefits, such as lounge access or in-flight Wi-Fi passes with the Altitude Reserve card, in this review. This will follow in the future and is just as important as their FlexPerks and Altitute Points programa in determining whether they are a good fit for you!

     
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