The $400 annual fee recently posted on my US Bank Altitude Reserve Visa Infinite card (USB AR). We performed our usual review of the benefits of the card compared to the annual fee and made a retention call to US Bank.
In short, despite the card’s benefits, we were a bit on the fence about keeping it if we didn’t receive any retention offer. Fortunately, we received a retention offer of 4,000 US Bank points (worth $60 at 1.5 cents per point). This wasn’t as much as we were hoping for, but it easily tipped the balance in favor of keeping the card for another year.
Background of Our USB AR Card
I was approved for the USB AR card in early June 2018, on my second attempt at applying. We wrote about our denial-then-approval experience in an article that we wrote in our pre-launch phase before Middle Age Miles was publicly available. Yet, this article has been one of our most popular and most-read posts, presumably because of the widespread interest in this card.
- Middle Age Miles: Persistence Pays – Approved for the US Bank Altitude Reserve Card! (6/4/2018)
During our first cardholder year, we spent about $18,000 on the card. Virtually all of the spend was in the 3x bonus category for mobile payments. Our best and most-often use for the card has been during our European trips. There, we’ve used the USB AR card through Apple Pay, which is accepted almost everywhere in Europe, for almost all of our non-restaurant-or-travel purchases (and sometimes for those types of charges as well, as restaurant purchases made through Apple Pay and travel purchases in general earn 3x on the USB AR).
As an example of the added value of the USB AR card 3x bonus category for mobile payments, consider our recent trip to Switzerland & France. On that trip, we charged about $1,300 on our USB AR card via Apple Pay. Almost all of this spend was in categories that would not have earned a bonus on any other card. For that spend, our next-best alternative would have been a 1x card with no foreign transaction fees such as an Amex Platinum or Gold card (1x Membership Rewards (MR) point per dollar) or our Chase Sapphire Reserve (1x Ultimate Rewards (UR) point per dollar). All of these points are worth about 1.5 cents each. Thus, we received an extra 2,600 points ($1,300 * 2 points/dollar) by using the USB AR – that is, an extra $39 in points rebates (2,600 points * 0.015 cents/point). Considering that we usually make about 3 trips to Europe each year, the benefit to us of having and using the USB AR for otherwise non-bonused purchases may be worth upwards of $100 per year to us.
Basics of the US Bank Altitude Reserve
Basics of the USB AR card and its key benefits include:
- Annual fee: $400
- Annual travel credit: $325
- Sign-up bonus: 50,000 points (for $4,500 minimum spend within 90 days)
- Bonus categories: 3x US Bank points on travel purchases and mobile wallet spending
- Point redemption value:
- 1.5 cents per point for travel (statement credit)
- 1 cent per point when redeemed for cash or other statement credits
- Real-time mobile redemptions via text message
- 12 complimentary Gogo Inflight Wi-Fi passes per year
- $100 Global Entry credit once every four years
- No foreign transaction fees
Other benefits of the USB AR card include:
- Membership in the Andrew Harper Travel Club
- We haven’t found any meaningful value yet in this membership – but in fairness, we haven’t focused closely on it
- Silvercar rental car discount using the VINFINITE code
- Access to the Visa Infinite Luxury Hotel Collection
- Priority Pass (note that the PP benefit that comes with the USB AR is VERY LIMITED – if you have any other PP access, you should ignore this one)
- GroundLink car service discount of 15% plus a $30 one-time credit
- Benefits at Relais & Châteaux hotel properties
- Visa Infinite concierge service
- National rental car Executive status and a limited discount
- Avis rental car limited discount
- And some other protections and services
Analyzing the “Keep or Cancel” Decision for the USB AR Card
For starters, there are no known product-change options for the USB AR card, so this is a pure “keep or cancel” decision.
Let’s see if the benefits we get from this card justify the $400 annual fee:
- We can get basically face value for the $325 travel credit, as it is applied automatically and is valid for a wide variety of travel purchases, including airfare, hotels, rental cars, and some other travel-related charges
- Even if you discount this credit slightly, it’s almost certainly worth at least $300
- We will use some and perhaps all of the Gogo WiFi passes
- At face value, these could save $150 or more
- That said, we’ll assume for purposes of this analysis that the WiFi passes are worth zero, because for us the card is a keeper even if we didn’t use any of the passes
- The 3x bonus category for mobile payments is a unique benefit that is best-in-class for a wide range of charges that would otherwise be unbonused
- We’ve already discussed that using USB AR to earn 3x in Europe where Apple Pay is almost universally accepted is probably worth $100 or more per year to us
- Our best guess is that we had at least $5,000 in charges during our first cardholder year using Apple Pay in the US (3x USB points), where the next-best alternative would have been an Amex Blue Business Plus card (2x MR points). Using USB AR for these charges earned us an extra 5,000 points, worth about $75
- Apple Pay is becoming much more widely accepted in the US; thus, if anything, the extra number of points we can earn should increase this year
- In addition, earlier this year we purchased a Samsung Gear S3 watch and loaded Samsung Pay with the USB AR card onto it, which gives us even more options for 3x earning
- Finally, redemptions at 1.5 cents per point for travel purchases are pretty easy using real-time mobile rewards
For us, even with our most conservative assumptions, we’d be getting value of at least $475 from the card with little to no effort, easily exceeding the card’s $400 annual fee. And we get this amount benefit even though we hold other premium cards with good bonus categories, such as the Chase Sapphire Reserve and the Citi Prestige – as well as holding the best card for non-bonused spend in the US, the Amex Blue Business Plus.
As always, you should do the math based on your own circumstances, such as your spending habits and your alternatives for points-earning. But we suspect that the USB AR card would come out a “keeper” – at least by a modest amount – for most people.
Note that it’s also an option to redeem 35,000 USB points for the annual fee, rather than paying $400 in cash. This redemption would give the points a value of 1.14 cents each, well below the 1.5 cents you can readily get by using your points to reimburse travel purchases using real-time mobile rewards. We definitely recommend that you do not use 35,000 points to pay your annual fee!
Our Retention Call
We already knew that we wanted to keep our USB AR card, but we went ahead and made a retention call to US Bank anyway. As usual, I told the agent that we recently received our statement where the annual fee posted, we’re trying to decide whether to keep the card or cancel it, and we were wondering if there was anything they could do to help make it worth it for us to pay the annual fee and keep the card.
In response, the agent at first balked, saying that they can’t reduce the annual fee. I told him that I understood that they can’t change the annual fee, and then I clarified that I was asking about any retention offers. The agent said that he would check. After a very brief hold, he came back and said that he could offer 4,000 bonus USB points (worth $60 at 1.5 cents per point). I gently advocated for a higher offer, telling the agent that we had more than $18,000 in spend and that I’d had a friend who received an offer of 10,000 bonus points. This didn’t go anywhere – the agent said that 4,000 was the best that he could do.
At that point, I thanked the agent and said that I’d accept the 4,000 bonus points and pay the annual fee. The agent read a short disclosure and said that the bonus points will show on our next month’s statement.
As we mentioned above, the USB AR card was already a keeper – but the bonus points from the retention offer were a nice little sweetener that made it easier to keep the card.
It’s worth noting here that our understanding and research suggest that 10,000 USB points used to be a fairly standard retention offer, but this seems to have gone by the wayside in recent months. It seems that more often than not recently, people have not been receiving any retention bonus at all. I certainly went into the call prepared to receive no offer. Hopefully you’ll receive a good offer on your own retention call!
$400 for the USB AR card is a big annual fee, but most of it can easily and quickly be made back by using the $325 travel credit, and for us the additional value we gain through the unique and best-in-class 3x category for mobile wallet payments puts this card comfortably into the “keep” category. The modest 4,000-point retention bonus was icing on the cake.
We hope you’ve enjoyed our “Keep or Cancel” article on the US Bank Altitude Reserve card, including our retention call data point, and we hope that it helps you in your own analysis of what to do with your cards. As with every credit card and points-and-miles decision, the underlying factors are different for different people. You have to analyze the situation given your own personal circumstances, and come out with the decision that’s right for you.
What do you think about the US Bank Altitude Reserve card and our “keep or cancel” analysis? Any other factors we should have considered, or any way you would weigh things differently? Please share with us and other Middle Age Miles readers in the Comments!
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