US Bank Smartly Credit Card Review: Up to 4% Cash Back w/ $100,000 in Qualifying Balances

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US Bank recently announced the US Bank Smartly Visa Signature Card, a new rewards credit card that offers up to 4% cash back on all purchases, if you have enough qualifying balances with them. This is the newest entrant to relationship banking, where banks offers you extra perks for combining multiple account types with them like savings accounts and investment/retirement accounts.

The card is not open to applications yet, but you can get on an e-mail waitlist. Here are the details of how that “up to 4% cash back” breaks down according to this US Bank press release and CNBC article.

Base rewards of 2% cash back on all purchases, with no limit. Technically, this card earns 2 points per $1 spent in eligible net purchases. In order get 2% cash back, you must redeem those points into an eligible U.S. Bank checking or savings account.

Bonus rewards of 0.5%, 1% or 2% cash back based on your qualifying combined balances at US Bank. You must also have an open Bank Smartly Savings account. Your qualifying combined balances with U.S. Bank include “open consumer checking account(s), money market savings account(s), savings account(s), CDs and/or IRAs, U.S. Bancorp Investments and personal trust account(s).” Business accounts, commercial accounts, and the Trustee only (IFI) client relationship do not qualify.

  • $5,000 – $49,999.99 earns 2.5% total cash back. Total of 2.5 Points per $1 (a base of 2 Points plus the Smartly Earning Bonus of 0.5 Points),
  • $50,000 – $99,999.99 earns 3% total cash back. Total of 3 Points per $1 (a base of 2 Points plus the Smartly Earning Bonus of 1 Point).
  • $100,000+ earns 4% total cash back. Total of 4 Points per $1 (a base of 2 Points plus the Smartly Earning Bonus of 2 Points).

Other bits: CNBC article reports no annual fee. Points will expire if there is no reward, purchase, or balance activity on your account for 12 consecutive statement cycles. Bank Smartly Credit Card and Bank Smartly Savings available in all 50 states.

Bank Smartly savings account. Let’s take a closer look at the Bank Smartly Savings account, which also earns difference rates based on both your balance inside the Smartly savings account itself AND your qualifying combined balances at US Bank. Here’s their current interest rate grid, updated as of 9/3/2024.

Importantly, these rates can change at any time. But right now, if you have at least $25k in Smartly and $25k in combined qualifying combined balances across US Bank, you can get the current top rate of 4.10% APY.

There is also a $5 monthly maintenance fee, which is waived if you have a Bank Smartly® Checking account (or Safe Debit account which also costs $4.95 a month). The Bank Smartly® Checking account itself has a $6.95 monthly fee, waived with $1,500+ average account balance, qualifying U.S. Bank consumer credit card, or combined monthly direct deposits totaling $1,000+.

Therefore, technically if you get this credit card, that would make the Bank Smartly Checking account free, which in turn would make the Bank Smartly Savings account free. Right now there is also a $450 bonus for new Bank Smartly Checking customers with a direct deposit requirement.

Rough opportunity costs with depositing cash at Bank Smartly Savings. Let’s try some rough theoretical numbers. Let’s say you actually have $100,000 in cash lying around, but you could get ~5.10% APY elsewhere and so you would be giving up ~1% APY to park your money at US Bank instead. If you held all of it at Bank Smartly Savings to qualify for the 4% cash back on the credit card, you’d be giving up $1,000 in taxable interest each year ($100,000 x 1%).

In exchange, you are getting 2% extra cash back over your existing, flat 2% cash back card. Cash back rewards are generally considered non-taxable as they are a rebate on your purchase. If you assume a marginal tax rate of 0% (this is just a guess), then you’d need $50,000 in annual purchases ($4,166 a month) at 2% extra cash back to break even with the hit from the lower interest. If you assume a marginal tax rate of 22%, then you’d need a little less: $39,000 in annual purchases ($3,350 a month) at 2% extra cash back to break even with the hit from the lower interest.

US Bank self-directed investments accounts! As with the Bank of America Preferred Rewards program, an alternative way to satisfy the balance requirements with minimal opportunity costs is to transfer over existing assets into a self-directed US Bank brokerage account. For example, you could transfer over $100,000 in index ETFs inside an IRA or taxable brokerage account. This would appear to fully satisfy the requirements as a “U.S. Bancorp Investments” account. This way, US Bank also gets a stronger foothold in the world of wealth management, as all the banks seem to want these days.

Be careful though, as US Bank’s self-directed brokerage account has a slightly higher fee schedule than much of the competition. Stock trades are $4.95 each, although you get 100 free trades per calendar year if you have both a Bank Smartly Checking account and paperless statements. There is a $50 annual account fee and a separate $50 annual IRA fee; these are waived if you have $250,000 in combined statement household balances.

My quick take. If all of these details actually hold through launch, they would be a significant improvement over the best current situation of 2.62% cash back on all purchases via the Bank of America Preferred Rewards program and a BofA cash back credit card. (The Robinhood 3% credit card is still “coming soon”.) But will it last? Even the BofA 2.62% has remained something of an outlier, but my hunch is that it has encouraged enough of people to keep a ton of cash at BofA earning zero interest so that BofA is still happy overall. Given that this new US Bank program actually offers a decent interest rate and an even higher cash back rate, I am concerned about its longevity. On the other hand, maybe this is US Bank’s big push to become a major player on the national level of Bank of America or Chase.

I’d have to open a lot of new accounts to go for this one. Savings account, brokerage account, credit card, move over assets, all for a bonus that is based on my credit card spend so will trickle in slowly. (None of these have a big upfront bonus.) Given the amount of shady stuff US Bank will probably have to deal with when paying 4% cash back, I’d have to trust that it will last long enough to be worth the effort.

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Comments

  1. Exactly on the quick take. It’s a lot of overhead, and add in the uncertainty of if this will remain and it’s a tough decision.

  2. Good analysis. Yeah, it sounds like a lot of work with a lot of uncertanties. As a simpler alternative … A little-known benefit of the Fidelity Rewards Visa Signature card (no annual fee, no foreign transaction fee and it pays 2% on every purchase) is that the cash back percentage increases up to 3% if Fidelity manages your money. Wealth Management Clients with $250,000 to $1 million in eligible assets get 2-1/4% cash back, $1 to $2 million get 2-1/2%, and $2 million plus get the 3% maximum cash back. Fewer hoops to climb through. Fewer fees. Better brokerage services. Higher money market rates. Etc.

    • Fidelity Wealth Management is pretty expensive though. The blended gross advisory fee on $2 million is very close to 1% annually (it is tiered based on first 500k, next 500k, next 1mil, etc). That’s $20,000 a year.

  3. A 4% credit card sounds amazing! I had the 3% Aod for a while that just got nerfed this summer, and set up the whole preferred rewards at Bank of America.

    They had a $1000 bonus plus around $200 per account (checking, credit card) so $450 seems low but is still significant considering I can just park my Roth IRA and claim rewards.

  4. 4% flat cashback is a little too good to be true, but definitely looking forward to it and curious to see how long it lasts.
    Personally I’d still keep 100k at BofA for the 5.25% cashback on Online and replace the 2.62% with this 4% flat.
    Ideally 250k worth to avoid the fees, but even 100k+ is a good deal if you spend more than $3623 for a net positive with the USB card.

  5. Thank you for this analysis! I’d like to see it last for a year or so before I move $100k in assets over to U.S. Bank (though it looks like a rollover IRA would count).

    I’m really enjoying the Robinhood card and signed all my kids up (including the 3yo). But I’d jump ship for another percent in a heartbeat, provided this isn’t a short-term gimmick. Hopefully this card and the Robinhood card are the first pieces of seeing 3% and higher rewards cards in the future.

  6. The Guy Next To Me says

    As someone with less than optimal finances, it would be nice to get half a percent more than the Citi Double Cash card offers just by parking 5k.

  7. Thanks for the info.
    Not worth the hassle for me, but if enough others jump in, competitors will start doing the same withe fewer hurdles, maybe.
    So I am hoping this takes off

  8. Does the Savings account have a monthly fee with $100K balance?
    Does 4% cashback will start as soon as with a new Savings account? or it needs to be 3 months average?

    I would use the card to pay IRS estimated taxes. Based on your detailed analysis, I believe I should do better with the 4% card even with losing 1% APY from Primis or Fidelity (APY 4.97% now

    Again thank you for your post and analysis

    • To my knowledge, there are no CC pays “EXTRA” reward points for payments to TAX, Insurance, or Health (Doc + Hospital) .
      Anyone knows otherwise?

    • No fee on savings accounts with that balance ($10,000+ waives the Money Market monthly service fee). As for the 3 month average – “for account(s) open less than 3 months, the average daily balance of the applicable time frame”

      Sounds like if you move the funds over at the time of opening you’d hit that pretty quick. I’d recommend doing slightly over (Say, $105,000) so that the average doesn’t put you at $99,000 if processing time takes more than a day.. Otherwise you’d have to wait for the first interest payment to help the average out.

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