Could this card be a keeper?

I am referring to US Bank FlexPerks card. It has a unique earning structure, like no other card out there. Right now it comes with a 20000-point sign-up bonus, though personally, I would wait and see if they increase it in connection with the Olympic games. Also, be aware, you could be approved for a lower version that comes with a 10000-point bonus.

What I wanted to do in this post is compare it to the Amex Blue Cash Preferred, which in my opinion is the best “keeper” card for most middle class families at the moment.  First, here is the earning structure of the US Bank Flexperks card:

• Get 20,000 Bonus FlexPoints after the first $3,500 in net purchases in the first 150 days
• Award travel starts at just 20,000 FlexPoints (up to a $400 ticket value) on over 150 airlines with no blackout dates or redemption fees
• Earn one FlexPoint for every $1 of eligible net purchases charged to your card
• Earn two FlexPoints for every $1 spent on gas, grocery or airline purchases – whichever you spend most on each monthly billing cycle – and on most cell phone expenses
• Earn Triple FlexPoints for your charitable donations
• $0 Annual Fee* the first year, after that $49*
• Earn 3,500 bonus FlexPoints each year when you spend $24,000 in Net Purchases. You can redeem these FlexPoints for your annual fee or combine them with other FlexPoints for travel

I have mentioned before that we put around 24,000 dollars on credit cards each year. Out of that amount, around 6000 is spent on groceries and 3,600 on gas. Amex gives 6 percent cash back on groceries (on up to 6,000 dollars per year) and 3 percent on gas and comes with a 75 dollar annual fee. So, if we only used Amex, here is how our rewards would break down:

1) Groceries: 360 dollars in cash back.

2) Gas: 108 dollars.

3) The rest: 144 dollars.

The total comes up to 612 dollars.  Of course, I assume that Amex is widely accepted in your area. That’s over 2.5 percent in cash back with a 75 instead of a 95 dollar annual fee, unlike some other “king” credit cards. *Cough* Chase Sapphire Preferred *cough*. Not to mention, with Amex you could potentially make up for the annual fee with various promotions. Remember that percentage number. If you are using points and miles earning cards for all of your non-bonus spending and not getting at least 2.5 CPM (cents per mile), maybe it’s time to rethink your strategy.

Now let’s look at Flexperks card.

As you can see, it only gives double points on groceries or gas, where you spend the most. But it also gives double points on cell phone and triple points on charity. Let’s assume you spend 100 dollars per month on cell phones for your family and donate around 100 dollars per month to charity.

1) Groceries: 12,000 points.

2) Cell phone: 2,400 points.

3) Charity: 3,600 points.

4) The rest: 15,600 points.

The total comes up to 33,600 points. But notice how you get 3,500 points when your spending equals 24000 dollars per year, which is the case here! So if we add 3,500 points, our total comes up to 37,100 points. That amount is less than 3,000 points short of potentially getting 2 airline tickets worth 400 dollars each. On top of it, you get a 25 dollar credit for baggage fees with each ticket redemption.

Additionally, US bank Flexperks program runs many promotions where you can get extra points for free with very little effort.  So I would say it’s reasonable to expect that a regular family can get close to 40,000 points per year through their normal spending, even if you don’t factor in charity contributions. So, even with a 49 dollar annual fee, you can potentially get close to 800 dollars in value from 2 airline tickets. Of course, it’s unlikely that your airfare will be exactly 400 dollars.

Basically, it works in increments of 20,000 (up 400 dollars for airfare), 30,000 (up to 600 dollars), 40,000 points (up to 800 dollars) and so on, where you get double the value for airfare. You don’t have to redeem each year, but may collect the points till a good opportunity presents itself.

Additionally, Visa is more widely accepted, so that’s another plus. And currently, US Bank codes Walmart as a grocery store, while with Amex it depends on location. Incidentally, I just noticed on my last statement that Amex started coding Walmart in our area as a warehouse store.  Also, if you spend more than 500 dollars per month on groceries, the math would be even better, since the bonus  is uncapped.

You could also buy Visa gift cards at Walmart or a grocery store  because you would get 1,000 points on each 500 dollar card. So, the activation fee of 4.95 could potentially provide up to 20 dollars in airfare. Then you could spend those Visa cards on regular bills.

This scheme would actually work for people like myself if I didn’t have frequent flier miles and didn’t churn cards. I just used 40,000 points to get a ticket for my mom, who lives in Europe. The price was  672 dollars  and usually hovers between 650 and 800 dollars.

Of course, this card wouldn’t work for many  families, but potential value for some is certainly there. So, with that, I will be adding it to my special section “keepers for some, not for most”.

Bottom line: this card could be a good “keeper” candidate if you spend a considerable amount  at Walmart and are able to buy Visa gift cards there, have a high cell phone bill, able to donate to your favorite charity through  a credit card, and like to redeem your points for airfare.