Buying gift cards with the Altitude Reserve

The new US Bank Altitude Reserve Card has the distinction of being the first card ever to offer a standard category bonus for mobile wallet payments.  Specifically, the card offers 3 points per dollar for mobile wallet payments (Apple Pay, Android Pay, Samsung Pay, and Microsoft Wallet) and travel purchases.  Many readers undoubtedly wonder if they can use mobile wallet payments to buy and liquidate gift cards as a way of earning points cheaply.  I’ve previously warned people away from this because I believed that US Bank would be watching for that behavior and shutting down accounts when they see it.

I recently attended a US Bank promotional event for US Bank’s new Altitude Reserve card, and I had the chance to talk extensively with John Steward, president of Retail Payment Solutions.  During our conversation he proactively brought up the gift card topic.  He said that they were ready to handle situations where people abuse the mobile wallet perk by buying lots of gift cards.  I asked whether they planned to warn people first, or immediately shut down accounts, or…?  He declined to elaborate.

I then asked if it was OK to buy gift cards in the course of regular shopping.  I gave the example of someone doing their regular grocery shopping and throwing in a gift card with the purchase.  He made it very clear a purchase like that would be fine.  I pushed a bit and asked “what about $500 gift cards?”  And his answer was along the lines of “yes, that’s fine. No one’s going to get in trouble for doing that.”  He followed up with (I’m again paraphrasing here): “Now, if someone goes from one store to the next buying gift cards on the same day, we’re not going to allow that.”

I tried pushing a bit more to learn the boundaries of what’s OK and what isn’t, but he politely refused to go into more detail.  He explained that if they gave out too much information about what they’re looking for, then people can use that info to work around the limits.  I can’t argue with that.  That’s true.

My experience buying gift cards with mobile wallet and the Altitude Reserve

I applied for the Altitude Reserve last Tuesday but the decision was pending.  On Friday, the card appeared at my door.  That was quick!  After activating the card, I added it to my phone’s Apple Pay Wallet, and then I made it my default card within Apple Pay (instructions for doing so can be found here).  On Saturday I successfully used Apple Pay at a pay-at-the-register restaurant, but two local clothing stores I visited were not able to accept mobile payments.

Then, yesterday I visited Toys R Us.  Based on John Steward’s comments, I think I can get away with buying a $500 Gift of College gift card every now and then.  I hope so, because I did.  When I entered the store, I first checked a register to verify that Apple Pay was accepted.  Yep, the Apple Pay symbol was clearly (or, rather, blurrily) there:

ToysRUs Apple Pay

I didn’t see an Android Pay symbol, but the Android Pay website lists Toys R Us as a supported merchant, so that should work too.

Checking out with my Gift of College gift card was a breeze.  I double-clicked my phone’s home button to bring up Wallet (that’s the name of the Apple Pay app) and it told me to hold the phone near the swipe terminal.  A second or two later I heard a friendly chime, and the phone vibrated to indicate that the payment was successful.  I signed the swipe terminal screen and that was it.  I walked out with an activated Gift of College gift card and, presumably, 1,518 Altitude Reserve points ($505.95 x 3 points/$) worth $22.77 towards travel.

Apple Pay Altitude Reserve

This makes a world of difference

In my post “There is a reason to get and keep the Altitude Reserve card” I argued that heavy mobile wallet spenders who plan to use points toward travel should consider this card not just for the signup bonus, but to keep long term.  I calculated how much one would have to spend on mobile wallet payments per week in order to do significantly better than with a 2%, 2.5%, or 3% cash back card, even when considering the Altitude’s annual fee.  The results: you would have to spend $327, $409, or $545, respectively, on mobile wallet payments (or travel) to do significantly better than the aforementioned cash back cards.  That’s a lot.  However, if you can get away with throwing in a gift card now and then with your regular purchases, it suddenly seems doable.

Personally, I’ll see how it goes.  If you’re a frequent traveler, then this $400 card is undoubtedly worth getting for its first year 50K signup bonus (worth $750 towards travel) and $325 in travel credits.  Whether or not it’s worth keeping beyond the first year will depend upon how much you use it to earn 3X rewards.

Summary

It seems that it’s fine to buy gift cards now and then through mobile wallet with the Altitude Reserve card, but don’t plan to do it a lot.  Unfortunately, I wasn’t able to get a definition of “a lot”.  Instead, I got the impression that about $500 per week is fine.  If I hear otherwise, I’ll let you know!

Last updated on March 31st, 2019

Regarding comments: Comments posted at the bottom of Frequent Miler pages and posts are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.

About Greg The Frequent Miler

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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JohnSteward
Guest

I remember you!

I’ll get my team to fix this, thanks. Nice meeting you. Take it easy on the buffet man.

Ed
Guest
Ed

“Fix this” ?? Is that good or bad? I sure hope US Bank doesn’t hurt themselves acquiring new customers for this card by being so picky about buying occasional gift cards like Amex has done with their RAT team. I had donated all my Amex points to charity when Amex penalized my account causing a negative balance. They didn’t even care that I used their own charity program to donate. Needless to say, I no longer use any Amex MR cards, nor do any of my family members.

Bob
Guest
Bob

lolwut do you really think that was anyone even remotely related to US Bank writing that comment? *eye roll* common sense is not so common huh?

Jesus
Guest
Jesus

Do you believe in me now?

joE
Guest
joE

Does us bank do a hard pull If I want to product change after the first year?

Jed
Guest
Jed

Based on my own experience and others I’ve talked to, U.S.. Bank does not provide any warning before shutting you down for manufactured spending.

trackback

[…] spend. If your local mall takes Android Pay or Apple Pay, you might even be able to use your Altitude Reserve to earn 3X on the purchase. See our Manufactured Spending Complete Guide for more information on buying and liquidating gift […]

Larry
Guest
Larry

So, your net is actually a little under $17 right? If you had deposited the money directly to a 529 you save $5.95.

For people who can afford to contribute up to the gift tax limit each year ($14,000), the net is about $476 in travel per year (per kid or other 529 beneficiary). More, I guess, for those unconcerned with exceeding their gift/estate tax limit. Not too bad, but unless supplemented with other manufactured and mobile spending not Really a game chandler even without the risk of shut down.

THEsocalledfan
Guest
THEsocalledfan

US Bank has a big credit card operation center in Fargo, ND. I know one of the folks who works their in a senior capacity, and she promised me they are looking hard for manufactured spending. I think Miler’s advice is likely correct, but do not kill your own golden goose.

Matt
Guest
Matt

My thought is that if you push this hard, you will be getting a call from Keith. Anyone who has dealt with AA from US Bank will be familiar with Keith. You do not want to be in a position where you have to talk with Keith.

Keith
Guest
Keith

Yep.

Mimi
Guest
Mimi

…or Christina

once one’s account is flagged, these 2 people from Cardmember Investigations are the ones you have to deal with. don’t think you can bs your way out with lies about buying VGCs, they are well aware of this.

those who are planning to go pedal to the metal with VGCs using their mobile wallet, careful…careful

Christina
Guest
Christina

I hate keith

Ajax
Guest
Ajax

Greg, just a quick tip about apple pay acceptance. You don’t have to look for the apply pay logo. 1) Any NFC enabled register accepts Apple Pay. 2) Almost all chip-
enabled registers also have NFC enabled. So, if a place has upraded to chip, it generally accept NFC and thus Apple Pay. One exception is CVS. They are blocking Apple Pay by disabling all NFC/contactless transactions. Usually if you see a register that looks like the one in your post (Verifone), you can assume Apple Pay will work. And, same goes for Android Pay

Ed
Guest
Ed

I’ve never seen such hesitation about a new card offer, but it’s understandable considering the relatively low bonus compared to the annual fee. That, coupled with their own warnings about what they don’t like you to buy much of makes this offer so unattractive compared to other offers. The only ones really interested are those who have more time to travel and don’t have the hotel or airline points to achieve all their travel wants. I’ll wait to see their reaction in regards to how they treat their new cardmembers. I would hope FM’s comments about being able to reasonably buy gift cards here and there comes true. If they act like Amex did, they’ll make a lot of customers mad and we’ll see people pull their business from US Bank. Moderation on both sides is reasonable.

TBB does PDX NUMERO UNO...................THE BUZZZZZZZED TOUR...................Coming This Fsll
Guest
TBB does PDX NUMERO UNO...................THE BUZZZZZZZED TOUR...................Coming This Fsll

If you see John Steward again, tell him the Daily Show is not the same without him

voyager10
Guest
voyager10

no kidding, he quit at the wrong time. I stopped watching it, but that’s besides the point.

Yuri
Guest
Yuri

So you bought a gift card to satisfy MSR? Do you hink it’s OK?

fengbaichi
Guest
fengbaichi

All my US Bank credit cards got shut down yesterday, because I used my Altitude Reserve card to purchase visa gift card. I was clearly told so by their investigation department. I should have read more carefully about the warning…

voyager10
Guest
voyager10

yes, I also had IRS come over yesterday to confiscate all my property because I used my Altitude CC to buy a gift card. People don’t buy gift cards.

Fester
Guest
Fester

I just got castrated by USBANK security for using my Altitude Card to buy gift cards…………………top that!

tee winn
Guest
tee winn

They pulled my tongue from my mouth and stabbed it with a rusty screw driver.

Alan
Guest
Alan
Denny
Guest
Denny

Counting the days until this gets killed – gonna be a LOT of angry MSers out there who get bloodied here. Hope they all come looking for you.

Chaser123
Guest
Chaser123

Bloodied?? Loosing one card out of 10 that you MS in is a scrape. Risk is minimal. Take this to the max!! I don’t care if USBank kills me as a customer

THEsocalledfan
Guest
THEsocalledfan

But if they cancel your points, what is the point?

Ed
Guest
Ed

I don’t see a huge enthusiasm for this bonus, so the initial group that applies won’t cause the bank much problems anyhow.

MSer
Guest
MSer

DP: Applied 5/1. Got the pending language 7-10 days or whatever (expected a denial). Card showed up on 5/4 without any emails notifying me it was approved. Bought gcs. Shut down 5/5.

Shittiest bank ever.

joE
Guest
joE

troll?

Ed
Guest
Ed

Kinda funny though. Ms humor. A true ms’r would never buy gcs that quickly, but would season the card with regular spend.

Keith
Guest
Keith

Doctorofcredit has a new post about a few people having their Altitude cards cancelled after purchasing only three gift cards. He vouches for at least one of the people not being a troll. But if all it takes is three gift cards, I’d expect to have seen a few more reports on the forums of shutdowns by now. Perhaps the shutdown card holders were just unlucky.

trackback

[…] Buying gift cards with the Altitude Reserve by Frequent Miler. Going to be an absolute shitstorm watching this play out I imagine. […]

banananon
Guest
banananon

Breaking news – credit card purchase of a VGC goes through. What a shocker.

No one was expecting them to watch transactions real time for MS.

Flo
Guest
Flo

Yet they are.

steven k
Guest
steven k

i want mobile pay bonus to stick around as long as possible.
so i say more power to us bank enforcers.
shut em down!

trackback

[…] few days ago, Frequentmiler chatted with one of the US Bank higher-ups and they indicated that there’s a team in place to make […]

trackback

[…] because I don’t want to get shutdown for simply spending too much. While Frequent Miler reports that U.S. Bank has said a small amount of gift cards are alright, I wouldn’t plan to generate […]

Mike
Guest
Mike

Fine?
I buy some airline GC and $500 VGC, the accounts was closed, the notice mail tell me, the Altitude can’t buy ANY kind of GC, $0 is maximum on Altitude Reserve.

Sue
Guest
Sue

Hi Greg, Could you still use the altitude card to buy Gift of College gift card ?