PSA: Don’t Buy Gift Cards with your U.S. Bank Altitude Card

Many of us got the US Bank Altitude and want to use it to manufacture spend for the 3x rewards when using mobile payments (worth up to 4.5%) or to meet the minimum spend requirement.

A 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 sure people won’t buy too many gift cards to take advantage of the 3x Mobile Payments. They declined to comment whether they’d give out warnings or not. We’ll call them the US Bank RAT team.

Today, Milesperday posted a story about someone (I heard the story first-hand as well) who bought a few $500 Visa gift cards and got their Altitude shut down. They bought two $500 Visa cards at the drugstore and a week later they tried buying a $500 card at the grocery and it got declined. They found out that their Altitude card had been shut down for ‘abuse’.

All the purchases had other items mixed in as well and the card had been used for regular purchases too, which makes it a bit more surprising. Either US Bank has Level 3 data telling them that it’s Visa gift cards or they guessed.

A number of other people also report being shut down due to gift card purchases (1, 2, 3, 4, 5, 6).

Note that in the FM interview the person specifically said buying a few $500 gift cards is fine so long as they aren’t doing many on the same day. My guess is there’s a disconnect there between what the spokesmen are saying and what they are actually doing. It’s hard to tell someone to their face that people will be shut down for buying a few $500 cards since it sounds unreasonable. So it comes out in conversation that that would be fine, even though it’s really not fine.

It’s quite surprising that they’re coming down so hard on people who buy a few gift. Don’t know what they’d lose by giving a warning or being more transparent about the limits. They likely want to make a statement right away.

We’ll add this to the post about Sparing your Credit Cards from Shutdown.

FAQ

Will US Bank give me a warning first?

Nope. You’ll get a letter in the mail a few days later.

Is it only gift cards or all MS that’s problematic?

So far, we only know of gift cards causing shut down (it’s likely that’s what they are flagging as of now). It’s worth keeping away from extreme forms of MS that don’t involve gift cards to keep eyes off the account.

How many gift cards can I buy?

Seems like two $500 cards within a week triggered shut down. I’d keep away from buying more than one gift card in a long time.

Will mixing in other items help?

No, it might not help (might depend on L3 data, but not necessarily).

Will using the card on lots of ordinary, small purchases help me clear more $500 cards?

No.

Can I buy third-party gift cards in high denominations, e.g. $500 Amazon gift cards?

Unclear at this time.

Doesn’t seem reasonable to me that they’d shut you down for buying a few $500 Amazon gift cards during holiday shopping, but it’s unclear if they saw L3 data that it was a Visa card or if they just assume so. I wouldn’t rely on getting back in by explaining to them it was Amazon and not Visa.

Will it help if I buy gift cards without a mobile wallet so that there’s no ‘perk abuse’?

That doesn’t seem to make a difference.

Will this cause all your US Bank accounts to be shut down?

Yes, reports indicate that all cards will be shut down.

Even FIDO?

Yes, your Fidelity visa card from Elan will be shut down too since it’s administered by US Bank. (Based on a DP I’m familiar with).

Haven’t heard that bank accounts get shut down, though.

Is this issue on the Altitude card exclusively or all US Bank cards?

It seems they are now looking for gift card activity on any card and shutting down accounts for that.
    Chuck
  • On May 11, 2017, 14:46

View Comments (186)

  • Don't pay the bill if they do not fully refund annual fee and permit the use of your points at stated value (150%). The idea that buying gift cards is a legitimate reason for a bank to rescind credit and close accounts is absurd. They are charging swipe fees on those transactions. The merchant selling you those gift cards are paying those processing charges. Further if you are paying your credit card bills timely - at least the stated minimum - then you are fulfilling your obligation. You are buying a legal product for legal use. Terms and conditions are NOT law or even legally binding. Impose your terms and conditions as a consumer - it's all a joke. If you get shutdown stand up for yourself or make US Bank eat the whole balance. The reality is you will have a charge off on your credit report and $10-20k of gift cards, not a bad consolation. It's on them if they make that choice for you.

    • Hi Kocasino, can you explain the data points and timeline? I had an Altitude card shutdown and points rescinded back around 2017 when the s*** hit the fan for the first time.

    • Bro, tanking your credit score is not worth it for this. By all means take them to arbitration or small claims court but don’t tank your credit score by not paying. It affects your ability to get housing, banking, get some jobs, cell phone service, etc.

  • Is this the case with all off their cards or just the altitude?
    Is it safe to get the SUB on a "business triple cash" with a few simon mall cards?

    • Just the Altitude card.
      Be normal though. Make it look normal but ONLY Simon Mall gcs on a statement just in case the bank has to look at your account.

  • Sudden? They don't allow gift card purchases and you purchased through Fluz, which is a site that only sells gift cards. LOL

    • Oh. Sorry. Well, in that case, I'd fight it. I'm sure you included that in your letter. Hope that reinstate your acct. GL.

  • There are some prepaid gift cards that the bank itself underwrites. In that case, the fees may be redundant.

    Also, some rules are made up solely to prevent abuse. It's alot easier to buy dollars that you get to retain, than to buy services. When people buy thousands of dollars of just more dollars, the bank ends up paying a premium out in bonuses... based on circular purchases.

    But, to disallow purchasing gifts entirely... on cards with large limits to begin with, is a bit over the top, to be sure.

  • I cancelled the USB Alt cc already so I can safely say that I MSd 99% my way to SUB and succeeded by doing things that appeared to them as everyday purchases. I'm sure there's a lot other ways that work as long as we think outside the box.

  • I lowered my cash advance limit on this card and Plastiq went through fine but I was later charged a 4% cash advance fee. I'm surprised that nobody has mentioned that here so maybe it's a new development.

  • I cannot understand why people are complaining about the bank closing accounts when cash equivalents are being purchased for manufactured spending. The fact that other banks are not as severe is irrelevant. I have about every awards card the day has come out and I have always used organic spending to meet all spending requirement. Anything else, you are just asking for trouble.

      • I disagree with this comment...not all GC purchases are related to MSing. I know someone who pays for daycare services but they dont take CC because the daycare doesnt want to pay for the 3-4% transaction fees but will accept debt transactions. So there are people out there who would buy VG and spend the balance amount towards actual spending costs. Sure for someone who sits at a desk all day long looking at transactions it may look like MSing but in reality its legit spending and if someone keeps their records in order can proof the trail. This is where US Bank needs to look at each case by case and should give warning/a chance to provide the necessary details before making a harsh decision. Its that or they choose to lose the business to their competitors who are more forgiving in unique circumstances.

      • Look at PIA's complaint. Its not just cash equivalents. According to PIA no VGC were bought, just Samsung Pay being used to its max of 10 transactions and they shut them down and lost all points.

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