New U.S. Bank Shopper card might be the best option for big shoppers

This page was originally published in late 2022. See the U.S. Bank website for updated rewards rates and card details for the U.S. Bank Shopper Cash RewardsⓇ Visa SignatureⓇ Card.

U.S. Bank recently introduced a new credit card, the U.S. Bank Shopper Cash Rewards Visa Signature Card*, with industry-leading rewards on items bought from dozens of major retailers. The card lets cardholders opt into 6 percent cash back rewards from any two of the following retailers each quarter:

• • • Ace Hardware
    • Apple
    • Amazon.com
    • Anthropologie
    • Bed, Bath & Beyond
    • Best Buy
    • Chewy.com
    • Crate and Barrel
    • Disney
    • Home Depot
    • Ikea
    • Kohl’s
    • Lowe’s
    • Lululemon
    • Macy’s
    • Menards
    • Nordstrom
    • Pottery Barn
    • QVC
    • Restoration Hardware
    • Target
    • Walmart
    • Wayfair.com
    • Williams Sonoma

The 6 percent payout is capped at $1,500 in combined quarterly purchases made with the two retailers of the cardholder’s choosing. After that threshold, purchases earn 1.5 percent cash back.

There’s also a 3 percent “everyday” category. Cardholders can pick one of the following each quarter:

• • • Bills and utilities
    • Gas stations and electric vehicle charging stations
    • Wholesale clubs

Similar to the 6 percent retail category, the 3 percent selection is capped at $1,500 in quarterly spending. Purchases beyond the quarterly spending limit earn 1.5 percent cash back.

Plus, cardholders earn 5.5 percent cash back on prepaid hotel and car reservations booked via the U.S. Bank Rewards Travel Center. All other purchases pay 1.5 percent cash back.

New cardholders receive a $250 bonus after spending $2,000 within 120 days of opening the account. There is no annual fee during the first year. Beyond that, the annual fee is $95.

My analysis

This is a really interesting card. U.S. Bank clearly chose the categories and the rewards levels very strategically. The 6 percent and 5.5 percent categories are particularly compelling since it would be very difficult to top those payouts on any other card. The most generous retail-branded credit cards typically give 5 percent cash back when you use their card at their store. And that’s a very fragmented market, with many of those cards only eligible for use at that one chain of stores.

The 5.5 percent travel categories are at the high end of that market as well. There are two potential drawbacks, however. One is that the hotel and car reservations must be prepaid. I got burned once when I prepaid for a car rental and later had to cancel the trip. I was not able to get my money back.

The other possible issue is that customers generally do not earn hotel and car rental loyalty points and elite status perks when they book through third-party websites. Still, some travelers may believe that the 5.5 percent rewards outweigh these cons.

I also really like the 3 percent categories, particularly bills and utilities (since it’s very broad and rarely maximized on other cards) and warehouse clubs (another niche category that isn’t emphasized on many cards).

Therein lies the true beauty of the U.S. Bank Shopper Cash Rewards Card — even if you’re a cash back enthusiast, this card probably fills gaps in your existing rewards strategy. This isn’t yet another dining, grocery or airline card. There’s a good chance you’re earning no more than 1 or 2 percent cash back on most purchases this card emphasizes. There should be very little overlap between the Shopper Cash Rewards Card’s top rewards categories and the other cards you’re already using.

Whether signing up is worth it depends on how much you spend in these categories. It could be a lot. Some of these represent everyday staples (for example, Amazon, Target, Walmart and bills and utilities). Others could make sense on a more episodic basis; for instance, if you have a home renovation coming up and plan to buy a bunch of supplies from The Home Depot. Or if you’re buying new furniture at Pottery Barn or new electronics from Best Buy.

Let’s say you can maximize the $1,500 quarterly spending thresholds in the 6 percent and 3 percent categories. You would earn $540 in cash back each year from those purchases. That’s a blended return rate of 4.5 percent.

Assuming that the $95 annual fee, which kicks in during your second year with the card, cuts into those rewards, you’d still be $445 to the good. That represents a 3.7 percent blended return if you maximize the 6 and 3 percent categories, which is probably much better than the vast majority of cardholders are earning elsewhere.

The bottom line

With the Shopper Cash Rewards Card, U.S. Bank is essentially combining dozens of store credit cards into one offering and also throwing in other everyday and travel rewards opportunities. Like all credit cards, you’ll want to evaluate whether or not this card fits your particular lifestyle. For example, do you spend a lot of money in the card’s top rewards categories? Do you prefer cash back, or would you rather opt for a travel card instead? Which other cards do you already have, and do the benefits overlap?

As with any rewards credit card strategy, it only makes sense if you can pay your bills in full and avoid interest. The Shopper Cash Rewards Card has a variable APR ranging from 19.74 percent to 29.74 percent. As long as you can pay in full and as long as you would take advantage of its rewards categories, I think most households will find a lot to like in the U.S. Bank Shopper Cash Rewards Card.

Have a question about credit cards? E-mail me at ted.rossman@bankrate.com and I’d be happy to help.

The information about the U.S. Bank Shopper Cash Rewards Visa Signature Card has been collected independently by Bankrate. The card details have not been reviewed or approved by the issuer.