Big Changes Coming for U.S. Bank Smartly Visa Credit Card
Update: The changes listed below have been confirmed through internal memos at US Bank. We also have confirmation that these changes will apply to new cardholders applying on or after April 14. Those who already have the card before that date will not be affected by the changes (for now?). (HT: r/creditcards)
We wrote last month about possible changes to the U.S. Bank Smartly Visa Credit Card, which first launched in November of 2024 with the highest cash back rate for everyday purchases. Cardholders can earn 4% cash back on every purchase, as long as they have $100,000 or more in U.S. Bank accounts.
In mid March, the U.S. Bank Smartly Visa Card was no longer available for in-branch applications, and U.S. Bank has also stopped allowing product changing to that card.
As we wrote at the time, pulling the card just four months after launching it sounds hard to believe, but we could see changes that make to more difficult to earn that 4% cashback rate. A new rumor points in that direction, with details of some of the possible changes.
That includes the following updates that are rumored roll out April 14th, 2025:
- Bonus earn rate will exclude the following categories: Educational/school, gift cards, insurance, taxes, business to business transactions, and 3rd party bill payments.
- Earning bonus will be capped at $10,000 spend the statement cycle. Base 2% earning will still be unlimited.
- Only checking account balances will count towards the balance requirement to earn the higher cash back rate with the U.S. Bank Smartly Visa Credit Card.
- In order to earn 2.5%, you will need a balance of $10,000 or more (up from $5,000). The two other tiers remain unchanged at $50,000 for 3% cash back and $100,000 for 4% cash back.
- The changes will apply to new cardmembers after April 14, 2025. Existing cardmembers will be grandfathered in.
Conclusion
Making changes to the card makes more sense than discontinuing it. However, these rumored changes will basically make the card a simple 2% cash back product, with no signup bonus.
Keeping $100,000 in an account that earns no interest, just to earn an extra 2% cash back on $10,000 spend per month, doesn’t make much sense.
If the rumor is correct and you decide to keep the card and and $1,000 in the checking account, then you would be earning an extra $2,400 in cash back annually if maximizing spend every month, compared to any other 2% cash back card. But you are missing out on at least $4,000 in interest every year on that $100,000 balance that is not earning any interest.
I’ll mention again, that this is still just a rumor for now, but some changes are bound to happen. Let us know what you think!
HT: Doctor of Credit
So if I spend $10,000 per month for 12 months on non-insurance and non-IRS payments (which are the lion’s share for most of us), I would earn $120,000 x 4% = $4,800. Subtract $4,000 for the 4% I’m NOT earning on the $100,000 I have to keep in a non interest-bearing checking account and I net $800. By keeping my $100,000 investment account at BofA and earning 2.6% on of all my spend, I only have to spend $30,476 annually to earn to same $800. And I can do better still as BofA allows insurance and IRS payments. I’ll keep my BofA card and US Bank Altitude Reserve (until they nerf that too).