US Bank's quietly great credit card

I got into a discussion on Twitter back in May about the most "under-covered" credit cards in the travel hacking blogosphere, and decided to lay out my argument here for why the US Bank Flexperks Travel Rewards credit card might be the second-best credit card for the working travel hacker.

The "old" Blue Cash card still gives 5% cash back in all the best bonus categories

The best card currently available is the American Express Blue Cash card, which gives unlimited 5% cash back at gas stations (for purchases up to $400, then 1%), drug stores, and grocery stores after spending $6,500 on the card each year of card membership.

That's so lucrative I've argued that even if you prefer airline miles for high-value "aspirational" redemptions, in many cases you'd be better off simply buying those miles with your 5% cash back rather than earning them with the airline's co-branded credit card.

But for any number of reasons your spend on a Blue Cash card is – at some point – going to be throttled.

Most of us book revenue tickets from time to time

Over at Milenomics, one of my favorite travel hacking blogs, the author strives for EQM-Zero, on the grounds that it's so easy to earn rewards currencies that spending actual money is a mug's game. The ideal year of travel for Milenomics is the year he earns no elite qualifying miles – the year he doesn't pay a penny to the airlines directly.

I agree with everything about that — except that some rewards currencies book into paid fare classes.

For example, if you earned Barclaycard Arrival miles through the RewardsBoost portal when American Express gift cards were still available there, you might have been earning up to 6.6% cash back — if and only if you were redeeming your Arrival miles for paid hotel rooms or airline reservations. If your total costs after liquidation were 1%, that would make for an 80% or higher discount on your travel, which is competitive with virtually any loyalty currency out there.

The other typical case of booking into a paid fare class is when award redemptions simply aren't competitive with revenue fares. Delta's stingy low-level award availability means there are times you might be faced with a sub-$300 ticket that would cost 40,000 Skymiles.

Note that I haven't said anything about earning elite status here: in the current climate of airline devaluations I think most travelers are better off ignoring the elite status treadmill and, as Milenomics puts it, Being Your Own Elite.

The Flexperks Travel Rewards card is cheap

The annual fee for the Flexperks Travel Rewards card is $49. They have a gimmick, however, whereby after you spend $24,000 on the card each cardmember year, you earn 3,500 bonus Flexpoints. And then they let you redeem those 3,500 Flexpoints against your $49 annual fee (getting 1.4 cents each in value).

Flexperks Travel Rewards are (not that) convoluted

Many credit card rewards programs give you options to redeem your miles for revenue tickets and other cash equivalents:

  • Citi ThankYou points can be redeemed for mortgage and student loan rebate checks, or revenue tickets booked using their portal;
  • Chase Ultimate Rewards points can be redeemed for cash back at 1 cent each or for revenue tickets at 1.25 cents each through their booking portal;
  • Barclaycard Arrival miles can be redeemed for half a cent each in cash back or 1 cent each against travel purchases over $25 made with the card;
  • American Express Membership Rewards points can be redeemed for 1 cent each for revenue tickets using their booking portal.

US Bank's program, by contrast, is more complicated: Flexpoints can be redeemed in bands, starting at 20,000 Flexpoints for revenue tickets costing up to $400. Up and down the chart, Flexpoints are worth as much as 2 cents (a $399 flight will cost 20,000 Flexpoints) and as little as 1.33 cents (a $401 flight will run you 30,000 Flexpoints).

Unlimited 4% in gas or grocery is terrific

If unlimited 5% cash back in both gas station and grocery store bonus categories is the gold standard, unlimited 4% earning at one or the other must be a close second.

Besides its annoying redemption bands, the Flexperks Travel Rewards card has one more twist: you earn 2 Flexpoints per dollar spent at either gas stations or grocery stores (or airline tickets) each statement cycle; you receive the bonus Flexpoints in the category you spent the most in.

Of course, to receive 4% back in value you'd need to hit the absolute top of a redemption tier with each and every redemption. Without a doubt, that's a tall order.

But now watch this.

Unlimited 2.66% in gas or grocery is also very good

It's true that the Amex Everyday Preferred, with its $95 annual fee, offers 3 Membership Rewards points per dollar spent at gas stations (with 30 monthly transactions), which can be redeemed at 1 cent each for paid travel or transferred to their travel partners.

It's also true that the Chase Ink Plus and Bold (also with $95 annual fees) earn 2 Ultimate Rewards points per dollar on up to $50,000 spent at gas stations. Those points could be redeemed for 2.5 cents towards paid travel or transferred to their partners, where it would be easy to get more value from them, for example on short-haul Avios redemptions.

But I know of no other card that offers unlimited 2.66% in cash value per dollar spent at either gas stations or grocery stores. And remember, that's the absolute minimum value you'll receive – the higher your fares are within each redemption band, the more valuable your Flexpoints become.

It actually gets better

I know this is getting a bit long already, and you might already be convinced. But there are two more things I'd be crazy to leave out:

  • The Flexperks Travel Rewards card earns 3 Flexpoints per dollar spent on Kiva loans. Even if you redeemed your Flexpoints for cash (at 1 cent each), you can use this card to earn 3% interest on as much money as Kiva will let you lend out. If you focus on short, 6-month loans, you can earn low-risk, 6% interest on your savings using this card;
  • With each Flexperks flight redemption, you also receive up to $25 in credit against purchases made with the operating carrier during your trip. If you are already redeeming Flexpoints at the top of a band, that can push you over 2 cents each. And if all else fails, you can buy a $25 gift card from your flight's operating carrier on the day of travel. Note that you do have to call into US Bank after your travel is completed to request the credit. 

Applying for US Bank cards sucks

You knew there had to be a catch, and here it is: many people with multiple recent credit card applications have trouble getting approved for US Bank credit cards.

The single most important thing you can do to increase your chances at approval is to freeze your IDA and ARS credit reports. I get e-mail from readers at least once a week lamenting the fact that they applied for a US Bank card without freezing those reports and ended up being denied, despite their perfect credit profiles.

It doesn't cost more than the price of a couple certified letters, and it can help you get in on one (or two) of the most lucrative credit cards available today.

So my suggestion is to do it, and do it today.