Which Cash+ categories should I choose?

I’ve mentioned before that U.S. Bank’s Cash+ card may just be the best cash back card there is.  U.S. Bank allows cardholders to choose two 5% cash back categories from a long list, and one 2% cash back category among gas stations, grocery stores, and drug stores.  All other purchases earn 1%.

Where things get really interesting is that there are multiple ways to easily increase your earnings with this card.  First, by opening a Platinum checking account, you get an extra half percent cash back for all purchases.  So earnings go from 1%/2%/5% to 1.5%/2.5%/5.5% just by opening this account.  If you have a credit limit of $25,000 or more across all of your U.S. Bank cards, the Platinum checking package is free.  Even better, each time you withdraw cash rewards of $100 or more, U.S. Bank throws in a $25 Visa gift card bonus.  So, by simply redeeming your rewards $100 at a time, you can increase your earnings by 25%.  By stacking these two opportunities, the earnings go to 1.875%/3.125%/6.875%.  Those are pretty spectacular cash back earnings, especially for a no-annual fee card!

Time to Choose for Jan-March 2013


Each quarter, it is necessary to pick your 2% and 5% categories.  Here are my thoughts about each…

2% Categories (effectively 3.125%)

Gas/Grocery/Drugs: I can only pick one of these in order to get an effective rebate of 3.125%.  I don’t tend to spend much on gas (I work from home!), so the real debate is between groceries and drug stores.  For reasons that will be apparent to frequent readers of this blog, I’m leaning towards drug stores.

5% Categories (effectively 6.875%)

I can pick two of the following.  Which should I pick?

Department Stores: I used this option this past quarter and regretted it.  I found that neither Sears online, nor Kmart in-person counted as department stores.  I simply don’t often shop at regular department stores, nor do I know of any that have really good gift card racks.

Restaurants: I do eat out a lot, so this could be a good choice, but I already get 5X from my Citi Forward card at restaurants.  When paired with a ThankYou Premier card, 5X is worth 6.65% towards airfare.  That’s good enough, so I think I’ll pass on this option.

Home Improvement Stores: I do have some real home improvement purchases on the horizon, so this one is very tempting.  The main argument against this category is that it is easy to buy Lowes and Home Depot gift cards at office supply stores with my Ink Bold card for 5X Ultimate Rewards points.  On the other hand, I noticed that OpenSky showed up on my credit card bill as a home improvement store.  Maybe they’ll bring back the 150X MyPoints promotion…

Electronic Stores: This is another tempting category.  I may buy a new computer sometime soon and it would be great to get 6.875% cash back for the purchase!  Also, there would be some interesting lab experiment opportunities such as checking out at Target via the electronics counter…

Airlines: Thanks to having so many miles & points, I hardly ever pay for airfare anymore.  I don’t see a good opportunity here for me.

Hotels: I’m a little tempted here because I may go for the Hyatt Diamond Challenge beginning in February.  If so, I’ll need a number of paid nights to qualify.  That being said, my American Express business credit cards give me 5% cash back for Hyatt transactions thanks to the OPEN Savings program.  So, this wouldn’t save me much money over what I could do already.

Bill Payment: This option covers telephone charges, cable, internet, and insurance.  Through my Ink Bold card, I get 5X on all of those except for insurance.  I’m not sure that my quarterly insurance payments are high enough to justify selecting this category.  However, I’m tempted to pick this category for just one quarter and prepay my insurance for the whole year…

Fast Food: See restaurants, above.

Furniture Stores:  Know any furniture stores with good gift card racks?  I didn’t think so.

Car Rental: I still have a bunch of Hertz points from last Spring’s Daily Getaways.  I don’t see myself spending much in this category unless there’s a great mile earning opportunity.

Charity: I picked this last quarter and I’m tempted to do so again.  It’s a great way to get something back while doing good.

Movie Theaters: My Citi Forward card has this one covered at 5X already.

Help me choose

So, what do you think?  Among the 5% categories, I can only pick two, but I’m torn between Home Improvement, Electronics, Charity, and (to a lesser extent) Bill Payment.  What do you think I should do?

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Greg is the owner, founder, and primary author of the Frequent Miler. He earns millions of points and miles each year, mostly without flying, and dedicates this blog to teaching others how to do the same.

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  1. Is there a limit to how much cash back you can get?

    Drugstores is a no-brainer.

    Electronics is probably the best option. It may be interesting if you can get some gift cards. Also you may able to double dip via the UR mall. Furniture would be good if you actually had something significant in mind. After that it seems like charity and bill payment are the only other options that make good sense for you.

  2. When I called US Bank, they said the additional .5% with the Platinum Checking account was only for the 1% cash back purchases. Have you had a different experience?

    • See: The way it works is that all transactions get 1% cash back, then the 2% categories get a bonus 1% cash back extra, and the 5% categories get a bonus 4% cash back extra. So, the Platinum .5% is on that initial 1% cash back (that you get from all transactions). In other words, you start with 1.5% cash back on all transactions then get an addition 1 to 4% on some of them.

  3. Electronics. You can combine your 6.875% with the 2% you get for the Best Buy rewardzone to buy Kindle (aka Amazon) giftcards. BBY periodicaly runs promotions which can sweeten the deal. And I haven’t checked recently, but you used to be able to buy Visa GCs there with BBY gift cards–max denomination of $200 with a $5.95 activation fee.

  4. @FM, are you sure that it’s a 25K limit on the card? Looks to me more like 25K outstanding balance. From the site:

    “$25,000 in combined personal deposit, investment and/or credit balances *10”

    “*10-Outstanding credit balances include personal purpose loans (some indirect not included), U.S. Bank Home Equity Loans, Home Equity Line of Credit, Premier Line, U.S. Bank Home Mortgage and U.S. Bank credit cards.”

    When I used to work for a bank and we had packages like this, only credit used, not credit available, counted toward the packages.

    • mikeef: I know that it doesn’t sound right, but I was told this by an agent on the phone and through a private message when I contacted them to confirm. I also have now gone through two statement cycles with no fees on my Platinum account despite only having a $500 balance.

  5. I like how you went one by one and stated if you would use this card for that category. I guess it sounds like the remaining three are your only real choices.
    Like you said, you can buy gift cards to most places at OD with IB so that eliminates most of the 5% categories. Any chance they will add new categories or add new things to the bill pay?

  6. @FM, I was releases from AMEX FR yesterday morning and all they did was lower my SPG card’s credit line down to 3K, but left my HH card at 8.9K, so I called them and requested a 3K credit line transfer to the SPG card. I’m glad it all worked out after a lot of faxing and time on the phone.

  7. @FM: Regarding the 25K issue, that’s a really big boo-boo on somebody’s part. I’d keep an eye on it, just in case. I’m sure that, with a PM from a representative, they’d refund a charge, but the bank’s current position makes no sense for them (Of course, it’s great for us.).

  8. I chose restaurants because I’d rather have cash back than TYP. Also, I chose home improvement because they have decent gift cards and you never know when you’ll need a washer/dryer or some other big item available at Lowe’s or HD.

  9. Do you have several CC with US bank? Or did you get >$25,000 credit balance with Cash+? Any idea why you have to apply for this card in person? It used to be possible to apply online.

  10. I called USBank to verify definition of “credit balance”. The banking representative explicitly told me that it means the balance one carries at the end of the billing cycle not the CC credit limit.

    He also said that 0.5% applies only to “other” category. It does not apply to 2% and 5% bonus categories and those are left unchanged. Either you found a great loophole or the USBank reps are playing off different sheets of music.
    Thanks for the great work on your blog!

    • Ross: I agree that the .5% doesn’t apply to the extra cash back you get from the 2% and 5% categories, but it absolutely does apply to the first 1% which you get from every purchase. The way it works is that all transactions get 1% cash back, then the 2% categories get a bonus 1% cash back extra, and the 5% categories get a bonus 4% cash back extra. So, the Platinum .5% is on that initial 1% cash back (that you get from all transactions). In other words, you start with 1.5% cash back on all transactions then get an addition 1 to 4% on some of them. Regarding the definition of credit balance, all I can say is that I have had multiple reps tell me the same thing and I have not received a fee.

  11. FM, your explanation makes logical sense. I will stop by my local branch to get yet another explanation from the bank. It looks like a training issue. Thanks!

  12. Does anyone know if Bed Bath & Beyond counts for the 5% (Home Improvement Stores)? I know that with American Express, Bed Bath & Beyond is coded as “Home Furnishings”. Maybe Home Furnishings and Home Improvement are lumped together as a similar merchant category? I think Bed Bath & Beyond sells gift cards.

  13. Has anyone been able to apply on the phone for this card? On the web site it says apply in branch, but there aren’t any within 100 miles of me.

  14. Ross, as per FT and FW gospel – DO NOT CALL! FM says it works a certain way, you want the truth, try it out. But
    do not go to every employee to ask!

  15. On a related note, I used to use Kiva lens quite a bit but now seems to be gone. FM, is this still around? Its a real PITA to go through loans one by one at $25 a pop.

  16. Greg Z: there are certainly times where calling is a very bad idea (I.e. “hello, United? Can I really book this flight to Hong Kong for only 4 miles?”) but I don’t think this is one of them. People just want to know for sure how to avoid the monthly fee before signing up for the Platinum checking account. US bank should be able to answer that question in a straightforward way, but it seems like their agents aren’t trained properly in this regards.

    BTW, Kivalens is back!

  17. All lot of thinking going on for minor upside methinks. Amex Blue Cash gives 6% at grocery stores – just load up on gift cards.

    Between Blue and Ink cards, you’re pretty much covered. But there is always the Amex Hilton for 6x at drug stores if you want.

    I put my USB Cash plus in the drawer except when I feel like making a few donations to Kiva…

  18. I don’t understand why you would buy Lowe’s gift cards for 5x when you can do TopCashback to Plastic Jungle and get the same gift cards for 10.5% off with a little advance planning. Which is a fascinating little trick I learned from you.

  19. I have my categories set for home improvement, bill payment and drug store. The home improvement covers upcoming home remodeling and gas gift cards at my local Lowes. The rest is self-explanatory.

  20. I chose grocery because I do my actual (food) grocery shopping at SuperWalmart, which AMEX does not count as a grocery store, but Cash+ does. And I have a 5% drugstore card (old AMEX BC) anyway.

  21. I loaded my Target prepaid card with my cash plus at the electronics counter and it came up as groceries per US bank CSR. Has anyone got a 5% back from buying electronics at target?

    • I just tried a test purchase in Target electronics dept. and it did not earn 5% electronics either w/Cash+. I think the electronics register actually sends the same MCC code as the rest of the store and not an ‘electronics store’ code. What is interesting is I did an MCC supplier search beforehand and this Target store came up with an extra MCC entry for electronic store, but the description mentioned it as a ‘kiosk’ inside target that I wonder if it could be related to those mobile phone kiosks… which I’m not sure are even operated by Target (and probably can’t load a Target AMEX)… though I haven’t looked into it further yet. Curious to hear more comments on this.

    • Ham: Oh well! Thanks for doing that test. Of course, you can sign up for the grocery 2% option and load up at Target. That would be pretty good.

      Cam: Interesting info. I don’t know anything about Target kiosks. Anyone else?

    • Hsin: Great question. I don’t know. That would be a nice trick if it worked! I didn’t pick department stores this quarter, but I’m willing to test anyway to see what mcc code shows up (unless someone else out there has tried it?). Have you ever bought from them before? If so, can you check your credit card statements to see how it is classified?

      • I didn’t buy anything from it before. In fact, I am going to apply for the US Bank Cash+ this week and I will try it out for you guys!!

  22. Any further update on whether the extra .5% from the platinum checking package also applies to the first 1% of a bonus category purchase? I, too, was told by a US Bank representative on the phone–who said he had this very credit card himself–that the extra .5% was provided only on non-category bonus purchases, i.e., purchases that did not qualify for a bonus. Has anyone seen hard evidence of this either way on their credit card statement? Thanks much.

    • Sharon Simon: Yes, I can absolutely confirm that you always get the extra .5%. Here’s an example. I made a $1000 donation to charity after having picked charity as my 5% category. Then when I look under “reward history” I see three cash rebates. The first is for $10. This is the base, 1% rebate. The next is $40. This is the extra 4% you get within 5% cashback categories. And, the final one is $5 with the words “US Bank Platinum Package Bonus”. This is the .5% bonus from the Platinum checking.

  23. In case anyone is curious, I decided to go with Electronics and Home Improvement this quarter. In other news, there are rumors that US Bank is going to devalue this card’s benefits in May by capping 5% spend at $2K per quarter, limiting to 1 $25 bonus card per year, and changing some of the 5% categories.

  24. Rumors, where? Just got the card, would be disappointing.
    It says that it takes up to 3 days until the bonus categories have been activated. Is there a way to confirm that they are active?

  25. Zz: people on FatWallet, SlickDeals, and a reader email to me all said the same. I’m working on verifying through US Bank before I publish. I’m not sure how to confirm that the bonus categories are active.

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