U.S. Bank Makes Its Move into the Premium Card Space

Will Carlson by on Jun 05, 2017

U.S. Bank is the latest firm to enter the premium credit card arena with its newly launched Altitude Reserve card. Exclusively for U.S. bank customers, the travel rewards card includes features much like that of American Express’s Platinum card or Chase’s Sapphire Reserve , including a hefty initial spend bonus offer, a large travel statement credit, accelerated earnings on travel, exclusive benefits and access, a metal design and a high annual fee. While largely similar to other premium cards, the Altitude Reserve includes a unique characteristic differentiating it from the crowd: accelerated earnings on purchases made with mobile wallet technology. Will this benefit be enough to help U.S. Bank to break into the premium card space?

U.S. Bank Altitude Reserve Card

The main factor that differentiates the Altitude Reserve card from competitors is its unlimited accelerated earnings rate of three points per dollar on mobile wallet purchases; such rates typically pertain only to a specific type of merchant or partnering company. Unlimited accelerated earnings on mobile wallet purchases give card holders the ability to accrue more points across a diverse collection of business types, with the potential to earn even more rewards as mobile wallet technology becomes more widespread. In fact, U.S. Bank’s SVP of Retail Payment Solutions, Bob Daily,  said that the firm is betting on the rise of this technology, anticipating it as the main payment method for future travelers: “Acceptance isn’t everywhere, but you’d be hard-pressed to find someone to suggest it’s not going to grow…It’s very forward-looking in that regard.”

Given the excitement surrounding the Sapphire Reserve and the newly revamped Platinum cards, U.S. Bank knows it needs “something new to capture the imagination” of prospects in order to enter the premium card market and hopes this new benefit is enticing enough to attract new customers away from other premium cards. Curiously, U.S. Bank restricted access to the new product to existing U.S. Bank customers, which might deter those who are interested in the card but not interested enough to open a bank or loan account with the firm to get it. As of now, U.S. Bank’s innovative and future-looking earnings rate benefit appears to work toward improving existing client loyalty as opposed to growing the firm’s customer base.

For more Corporate Insight coverage of the premium card arena, see our earlier blog post on The New and Improved Platinum Card.