US Bank CASH+ Visa Sig Card NERF!!

[navigatethis12]

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@longtimelurker wrote:

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While I often agree with navigate, I think this is just unnecessary.  As darkpearl says, it is perfectly reasonable to lament the severe nerfing of the card.   Yes, it may not have been a sustainable business model, but that is the fault of US Bank,  not us.   The cards weren't made to give a little back, they were made to make US Bank money, and they put out a rich reward  model to attract market share.  And now they changed it, and we can comment without being told to set up a new credit card company.

And opinions can differ if this is the best 5% card as well.  Choosing your categories is nice, but only if the categories are useful.

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If the post came off as rude I didn't mean it, so I apologise. I'm just speaking of the people saying the card should be sock drawered now and is completely worthless. I understand that everyone has different cateogories that will benefit them, but I imagine most people have a mobile that they can use the 5%. At least they aren't amusement parks, medical visits, and other not high spenind categories that Citi usually offers. Again, I apologise if you took the post as being rude. I was just trying to provide a different viewpoint instead of everyone seemingly not understanding why US Bank would decide to change the categories and make a cap. I don't even think there was this much chaos when American Express introduced their cap for the Blue Cash cards.

[HiLine]

I agree with navigatethis12. In my view it was expected that US Bank would soon modify their reward program to cut the losses. The change was dramatic because the original reward structure was one of the most unsustainably generous in the history of reward credit cards. That people were able to extract thousands of dollars in rewards in a mere 6 months is a testatement for that. The reason the reward program was nerfed was because many consumers were abusing the rewards. US Bank did nothing wrong and does not deserve the blame, IMO.

[longtimelurker]

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@HiLine wrote:

I agree with navigatethis12. In my view it was expected that US Bank would soon modify their reward program to cut the losses. The change was dramatic because the original reward structure was one of the most unsustainably generous in the history of reward credit cards. That people were able to extract thousands of dollars in rewards in a mere 6 months is a testatement for that. The reason the reward program was nerfed was because many consumers were abusing the rewards. US Bank did nothing wrong and does not deserve the blame, IMO.

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My view is that US Bank did do something wrong (but it probably doesn't matter to them!).   They constructed the program, and they really did make a mistake, not understanding the potential for heavy use.  Once they saw that, they fixed the program.  That causes some negative reaction, which is what we have seen here, but as long as enough people continue to use it and sign up, they are OK.  

Through a different lens, you could consider that  US Bank acted as a greedy abuser, creating a very attractive program to build market share (it is a regional not national bank) and then changed the rules, after people had got the card (with HPs etc) when they might have applied for other cards had they known...

So, not clear cut!

That said, as I have often posted, the card is STILL a good one for many.   For new applicants for any card, the question is: "Is this a good card for my needs?"  Whether the card was better in the past doesn't matter, if you cannot get that better deal.

[Brax]

It's good to read there are some that look at the big picutre of the long-term sustainability of this card and not about how awful the Cash+ has become for no longer allowing them to extract thousands of dollars in uncapped rewards from a conservative bank much smaller than the top several banks. Yes, it was foolish for US Bank to offer uncapped rewards with something like Bill Pay or airline tickets but they're a conservative bank with less experience with those who game the system a bit that the larger banks have historically tolerated for longer durations before making changes.

For now, the Cash+ still compares very favorably to the gimmicky rotating reward categories of the Chase Freedom and Discover IT. Year-round 5% cashback on up to $8000 in restaurants and 2% cashback on grocery stores is more than good enough for me.

[darkpearl]

I definitely still use my card. The categories are still very attractive, but we definitely enjoyed having no caps when purchasing things like electronics and furniture for our new house. It's also a very pretty card and I love whipping it out at CVS, haha. Ideally, in a few years when my fiance's credit has improved enough, he would get his own card and then we'd have FOUR 5% categories. I've used the categories for: hotels, charity, furniture, electronics, of course bill pay when it was around. This also would have been a great card to have in college because of the new bookstore category. Every quarter I work out how much I anticipate spending in each category and choose the best two. My BOA has the 25% redemption (but on at least $300 worth of cash back) so I wish US Bank had kept that feature, but the BOA is 1.5% not 5% so I guess that's why...

[longtimelurker]

And if making money via manufactured spend is the goal, this card wasn't a card of choice anyway, even before!

[HiLine]

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@longtimelurker wrote:

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@HiLine wrote:

I agree with navigatethis12. In my view it was expected that US Bank would soon modify their reward program to cut the losses. The change was dramatic because the original reward structure was one of the most unsustainably generous in the history of reward credit cards. That people were able to extract thousands of dollars in rewards in a mere 6 months is a testatement for that. The reason the reward program was nerfed was because many consumers were abusing the rewards. US Bank did nothing wrong and does not deserve the blame, IMO.

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My view is that US Bank did do something wrong (but it probably doesn't matter to them!).   They constructed the program, and they really did make a mistake, not understanding the potential for heavy use.  Once they saw that, they fixed the program.  That causes some negative reaction, which is what we have seen here, but as long as enough people continue to use it and sign up, they are OK.  

Through a different lens, you could consider that  US Bank acted as a greedy abuser, creating a very attractive program to build market share (it is a regional not national bank) and then changed the rules, after people had got the card (with HPs etc) when they might have applied for other cards had they known...

So, not clear cut!

That said, as I have often posted, the card is STILL a good one for many.   For new applicants for any card, the question is: "Is this a good card for my needs?"  Whether the card was better in the past doesn't matter, if you cannot get that better deal.

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All good points. I hope they maintain the product for a while. I'm planning to eventually get the card. Even after the downgrade, it is still very attractive as a no-annual fee card.

[enharu]

There's two possibilities behind what's really going on. Of course, this is just pure speculation.

1. like longtimelurker said, they did do something wrong. They underestimated their customers who literally dropped a bomb on them. In order to correct things, they began making adjustments to what it is now.

2. The other possibility is that US Bank is afterall just a regional bank, that is much smaller in size compared to BofA, Chase, Citi and Wells Fargo (source: http://www.ffiec.gov/nicpubweb/nicweb/Top50Form.aspx). Wells Fargo, which is 4th largest US Bank, has over 4 times the amount of assets US Bank has. That's how big of a gap there is. And even Wells Fargo cannot, or simply can't be as bothered to, get their credit cards right. 

In order to break into the market, US Bank needed a very compelling product to divert market attention towards them. I honestly doubt the actuaries and bankers employed at US Bank are this stupid to not forsee the potential losses that can be incurred. And despite them knowing that, they went ahead with it. In a way, think of it as a bait and switch tactic.  When the card first came out, it did attract quite a bit of attention and also garnered rave reviews, though it's still hard to compete against the juggernauts in the market. My guess is that they are pretty much just writing off these losses as "marketing costs", with eventual plans to nerf the card. However, the awards, quotes from reviews, original ratings of the card are what it is. Despite the nerfs, which one can argue makes this a very different product, US Bank can still use these as marketing material in magazines, TV ads, etc. Most customers will not even know that the card had underwent these nerfs, and still think its a really great card.

However, despite all these changes, this is still an excellent card with the way it is. I can easily spend over 2k at restaurants in a month, and with the current changes, I have been limited severely by the 2k cap. Sure, I don't like that, but having 5% on 2k spending beats having nothing. I'm still going to spending that money regardless anyhow.

[Crashem]

I get the fact that us bank screwed up intentionally or unintentionally and is trying to cut their losses at this point. However, by not dropping the 5% to 2% after hitting cap is just dumb. Basically abusers will just use to limit and sock drawer. They are just limiting their losses instead of trying to make card useful and make money. As a result, this card likely will see sd for me which is annoying as I know they were making good money given the amount of 1% volume I was doing. Taking the hp and reduced average card history is the kicker. But what bothered me most was the way the letter tried to hide the new 5% caps while claiming to be transparent etc.

[Open123]

While greatly reduced, especially from before, it's still the *best* rotating category card, in my view.

1.  $2,000 is still a higher threshold than Freedom, Discover, or Dividend.

2.  The option to choose is inifnitely better than being assigned potentially useless categories.

3.  $25 for initial $100 is still nice.

Choosing 5% dining and bookstores makes this better than the Forward.  For its intended market and purpose (rotating cashback cards will never be geared towards those who spend great amounts), which card is better?

I can't think of one.