U.S. Bank Shopper cash rewards vs. store cards: When 5% beats 6%

Despite its attractive rewards rate and dizzying array brand behemoths it offers, the card may not be the right choice for everyone. Especially when you consider that many merchants on its list offer store credits that earn as much as 5% back with less effort.

Yes, the U.S. Yes, the U.S. It’s not a substitute for a store credit, if the store is where you spend most of your daily spending.

Consider these things when making a decision.

The U.S. Cash Rewards card is different from most store credit cards and general cash-back cards. The annual fee for Bank Shopper Cash Rewards ™ Visa Signature Card – NerdWallet Exclusive is $0 in the beginning, and then $95.

To determine the card’s overall value, subtract $95 from the cash back earned each year after the first year. Sign-up bonus for U.S. The U.S. Bank Shopper Cash Rewards ™ Visa Signature (r) Card – NerdWallet Exclusive – This bonus can help to offset that cost, but only if it is met. You will receive a $250 bonus if you spend $2,000 on eligible purchases within the first 120 day of your account opening.

Store cards have less lucrative bonuses, if any, but they don’t charge an annual fee and are less likely to put you under pressure to spend a lot within a certain time period.

The U.S. value proposition must be considered when evaluating the U.S. It is important to look at how cash back is earned and the restrictions on that earnings when assessing the U.S. value proposition.

The 6% cash-back rate is subject to certain restrictions:

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  This applies to 2 retailers and not all 24.
  

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  These two retailers must be chosen every quarter. You’ll only earn 1.5% back otherwise
  

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  Your earnings are limited to $1,500 per quarter in total spending at both of your retailers. You might reach that cap depending on how much you spend at these two retailers. You can get $90 cash back in the 6% category each three months or $360 per year.
  

It also has a 3% “everyday” reward tier. However, it too must be activated quarterly and there is a $1500 quarterly spending limit. The options include gas and EV charging stations, wholesale clubs, and bills and utilities. This is a broad range of “everyday” purchases but it does not cover all. The maximum earnings you can make per quarter with the 3% tier are $45, or $180 in a year.

The U.S. Comparison of the U.S. Bank Shopper Cash Rewards ™, Visa Signature(r), Card – NerdWallet Exclusive – Against a popular store card, the Target REDcard Credit Card – illustrates how to weigh both the benefits and the costs.

Let’s suppose you are a frequent Target shopper and you choose the U.S. Select Target to be one of the two 6%-back categories. You’ll earn $360 cash back if you do this each quarter and hit Target’s $1,500 limit every quarter.

However, after year one you would owe an additional annual fee which will bring your earnings down to $265.

Annual fees for the Target REDcard(tm), Credit Card are $0. The annual fee for the Target REDcard(tm) Credit Card is $0.

The $6,000 annual Target spending would result in $300 savings. There is no annual fee and you don’t need to spread your spending over four quarters to avoid caps.

Although 6% is more than 5%, the U.S. Bank Card’s annual fee changes the equation. You would need to spend $9,000.50 annually at Target in order to be able to beat a store card that charges an annual fee of 5%. However, this is not possible with the U.S. Bank card. Bank Shopper Cash Rewards(tm) Visa Signature(r) Card – NerdWallet Exclusive. Why? Why? Because Target will only give you 6% back if you spend $1,500 quarterly ($6,000 annually). After that, Target will only give you 1.5% back.

This example does not take into consideration all factors such as the sign-up bonus and other reward tiers on U.S. Bank Shopper Cash Rewards(tm) Visa Signature(r) Card – NerdWallet Exclusive.

However, it is clear that if Target is the main place you spend most of your daily spending, then the Target Credit Card will make more sense.

You can choose from 24 possible 6%-back retailers when you sign up for the U.S. Many of these retailers offer Visa Signature(r), Bank Shopper Cash Rewards(tm), Visa Signature(r), Card – NerdWallet Exclusive. These cards earn rewards up to 5% back and come with $0-annual-fee store credit. Here’s a complete list:

The U.S. The U.S. Bank Shopper Cash Rewards ™ Visa Signature (r) Card – NerdWallet Exclusive – This is a superior choice to any store card, if you are:

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  You should spend a lot each year to cover the annual card fee and earn rewards.
  

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  Spread that spending across multiple merchants.
  

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  You don’t mind managing the card’s quarterly bonuses categories.
  

You can get a lot of cash back if you keep your eyes open for the 6% and the 3% categories, and you use the card strategically. Here’s an example:

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  You can choose Walmart or Amazon for the 6% category. This will allow you to hit the quarterly spending limit each time, which is quite easy considering that these two merchants sell almost everything. The quarter would bring in $90.
  

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  You can select “bills” to get the 3% everyday category. This card will be used to pay your phone, power, water, and possibly a streaming subscription. You earn $30 cash back for every $1,000 you spend during the quarter.
  

• Everything else is paid for by the U.S. You pay for everything else with the U.S. Bank Shopper Cash Rewards ™ Visa Signature (r) Card – NerdWallet Exclusive. Earn unlimited 1.5% back, from dining to charitable gifting. Spend $1,500 and receive $22.50 back.

The total cash-back for the quarter would be $142.50. If you keep your spending habits consistent throughout the year, you could get $570 cash back.

The U.S. The U.S. Bank Shopper Cash Rewards ™ Visa Signature(r), Card – NerdWallet Exclusive provides the best value when it is used often, strategically, and across a range of purchases.

Some of the weaknesses that store cards have may be a reason to switch to the U.S. Bank Shopper Cash Rewards(tm) Visa Signature(r) Card – NerdWallet Exclusive. Some store cards have low credit limits and APRs, while others are restricted to the brand stamped on the front.

Reward points earned through a store credit card cannot be used at other stores. Many store cards do not offer any rewards, so the rewards may not be worth much.

The U.S. is a good alternative to store credit cards. You might also find that the Bank Shopper Cash Rewards ™ Visa Signature (r) Card – NerdWallet Exclusive is not a good fit. However, there are many other cards that offer a valuable middle ground.