Posted by Chuck on May 11, 2017
Manufactured Spending

Published on May 11th, 2017 | by Chuck

174

PSA: Don’t Buy Gift Cards with your US 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.



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Dan
Dan

Makes me kind of glad I didn’t jump on the Altitude bandwagon.

UPS guy
UPS guy

+1. Now I don’t feel so bad we don’t have a branch in our state.

NYchurn
NYchurn

+1 (NYC)

Simon
Simon

Makes me regret I didn’t jump on the CSR bandwagon.

Nick
Nick

idk, the 3x on mobile wallet purchases is still a pretty awesome deal.

NinjaC
NinjaC

not if ur account is shut down amirite?

George
George

Points are useless if you can’t use them, or if there value is not as much as you thought they were going to be. You’ve been warned.

AZ
AZ

+1, not a fan of US Bank.

Sal
Sal

Not a us-bank fan never will.

The Value Traveler
The Value Traveler

This is why I waited. Needed to smoke to clear first

William Charles

Still worth it for the sign up bonus IMO. Easy cancel after first year.

Low Spender
Low Spender

Not a horrible card if a person can easily spend $4500 on that one card within 90 days without any MSing, but that’s not what some folks were planning for. I’m glad I didn’t get the card.

Rob
Rob

By no stretch of the imagination would 3 gift cards be considered abuse by anybody anywhere. The abuse here is by the bank. They list nothing in their terms and conditions about what items are acceptable for purchase, but then they violate your privacy, stick their noses into your shopping bags, and then retroactively decide whether your purchases are to their liking? That is abhorrent. Can they just shut you down if you have other charges they don’t like? What about political contributions to the party they don’t support? Maybe they can peek at what medication you are buying and shut you down if they think you might be dying of cancer? The potential for this kind of abuse of your private information is a can of worms they just opened up…they are going to be sorry they ever tipped their hand that they can see your purchases.

Reg
Reg

+1 billion.

Regardless of the type of spend. The policy precedence seems wrong.

Scott
Scott

Disagree. I bet if you dig into the full cardmember agreement, there is some provision allowing shutdown for abuse of the account or rewards system by purchasing cash equivalents or prepaid cards.

The Terms and Conditions on the application page has this: “We will not award Points for Advances, Convenience Checks, Balance Transfers, Interest Charges and Fees, credit insurance charges, or transactions to fund certain prepaid card products. We reserve the right to adjust the number of Points for Purchases or to stop issuing Points for Purchases on the Account, upon notice to you. Upon approval, refer to the U.S. Bank Altitude Reserve Visa Infinite Cardmember Agreement for full details.”

Dan
Dan

They’re still not being transparent, because they say they reserve the right to adjust points, etc …. but they didn’t say anything about reserving the right to shut you down if you purchase cash equivalents.

AB
AB

They can shut you down for any or no reason at all. This is nothing new for credit cards or nearly any business-to-consumer agreement nowadays.

Dan
Dan

Wasn’t saying they don’t have the right to shut you down – was saying they weren’t being transparent about it.

Rob
Rob

Any reason? Really? Like being from a race that has historically higher default rates? They tried that with “red-lining” mortgages once upon a time.

Scott
Scott

Again, have you read the full cardmember agreement to verify? I don’t have the card so I don’t have the full agreement, but I’d bet there is something in there. Read through it and let me know. Banks are pretty smart about covering their asses.

I don’t get the anger about them not being transparent. They don’t owe you any sort of transparency. Churners pretty clearly exploit the system and often times violate card agreements, etc. We’re just lucky the banks don’t enforce the rules and/or make money off of fees/interest/etc.

Tony
Tony

They have absolutely no obligation to be transparent. This has been the way banks have always operated.

And yet you complain about something you already agreed to? You are free to use other banks.

Dan
Dan

Who said I already agreed to it? I don’t do business with U.S. Bank.

Rob
Rob

Exactly, so if they will not award points for purchases of cash equivalents, how is buying one an abuse? Just don’t award the points as they say and after a purchase or two when people don’t get their points they won’t use that card. They also will shoot their product growth in the foot, but hey, those are the breaks. But shutting down an account for abuse because they bought 3 gift cards is absurd.

Chris
Chris

Read your agreement. They can shut down your card at any time, for any reason and at their sole discretion. I’ve had two banks do this to me. There’s no fighting it. You agreed to it when you signed up.

Lynn
Lynn

Why does it bother them if one buys a $500 giftcards or a $500 gift?

Parkerthon
Parkerthon

Because people MS. And they don’t want people profiting off their reward system in the crazy manner that people came to MS. They want people using the card for everyday purchases. So yeah, they set those terms. More power to them, I am not a heavy MSer but do occasionally pick up VGCs and gift cards in reward category stores to stack savings on large purchases. Large or not, this is dwarfed by the very solid amount of normal spend I do with any card that occupies a regular spot in my money clip. I won’t be applying for this card or any others by a bank that scrutinizes my purchases that closely… this certainly won’t win them the free publicity and positive exposure that frankly helped push premium cards like Sapphire and Platinum into the mainstream with the non-MS wealthier crowd. I understand controlling heavy MSers, but this sounds way overboard and frankly abusive in the other direction.

wade
wade

What is an MSer?

joE
joE

x3 mobile was dead before this card even came out. People were delusional to think that this would last longer then a few month. Again sub-par card by a sub-par bank, now put up with the sub-par experience.

Nil
Nil

Still a very good card in the first year and very much worth it.

banananon
banananon

Buying $1500 in GC’s in the first couple weeks of opening the card was a pretty dumb move. MS’ing this is going to be about the slow ramp.

It will be interesting to see if FM gets banned with just one card purchased.

Ryab
Ryab

Totally agree. On top of that, there was an article warning us about potential shut down due to buying gift cards.

Ray
Ray

Doesn’t RAT Team mean Rewards Abuse Team Team?

Dan
Dan

Yep. It’s like in government we use Common Access Cards (CACs). People always say CAC Cards. Annoys the hell out of me.

Scott
Scott

ATM Machine

NinjaX
NinjaX

old Hilton HHonors

Amy
Amy

PIN number.

Zachek
Zachek

the Department of Redundancy Department.

Greg N
Greg N

Haha, that’s good. But RA Team doesn’t have the same ring to it.

BS
BS

This is actually good news for a lot of people because it means at least they are trying to keep the 3x longer.

Reg
Reg

I’d like to make a larger point about the DOC community as a whole. I surely don’t believe that the cardholder is putting out a fake story as there seems to be many data points and corroboration.

That being said, a commenter on MPD got an unfair response when he asked for proof of the shutdown. If this were fake, then the person fabricating the story has a lot to gain by scaring people off.

Again, not saying it’s the case here, so relax, just making a larger point in general.

Do other people think it’s unreasonable to ask for proof of the shut down?

Stvr
Stvr

I think all of these commenters are fake. 100%. Why are you taking this at face value??

I see the comment from Vinh vouching for the story but he likes to troll his readership to get ahead too

Reg
Reg

Totally understand where you’re coming from, but I don’t think that Chuck and Will should be thrown into the same boat as “other” blogs.

They work their butts off to make sure they don’t make money on us through affiliate links and instead they always try to get us the best deals. I appreciate that, that’s the reason I only visit this blog, if possible. Not to mention all the other effort they put into this thing. Much appreciated

William Charles

Chuck apparently knows the person who got shut down as well and they privately shared the story first. I understand where you’re coming from, but I think sharing the story is still worth it even if there is some chance it’s fake. If it was somebody I didn’t know, I probably wouldn’t have posted it but it seems Chuck does know this person so that’s good enough for me at the moment.

This also gives others a place to share DPs/stories.

JakeFromStateFarm
JakeFromStateFarm

I’m in agreement with you. I have a hard time believing that in the 10 days since the card launched, less if it took a day or more to get it in the mail, they’ve taken the time to analyze spending or set up metrics to search for MS activity.

I feel that it is more likely that:

1 – Someone got their card and grossly abused the Mobile Payment feature via heavy MS at locations where the average person does not spend hundreds of dollars and it caused a flagged in the fraud department which lead to an investigation and or eventual shutdown.

2 – The heavy MSers and bloggers are spreading misinformation to keep this avenue operating as long as possible. (Look back on all the Five Back misinformation that was pushed on reddit and multiple blogs shortly after the program went live if you don’t believe me)

3 – A combination of both of the above possibilities.

William Charles
JakeFromStateFarm
JakeFromStateFarm

Similar to other claims across other blogs and forums , but I’ve yet to see anyone provide evidence of their shut down letters.

William Charles

Well if they have just started shutting down people, they won’t have received a letter yet.

Scott
Scott

Not all that surprising. The application page has this language in the terms and conditions:

“We will not award Points for Advances, Convenience Checks, Balance Transfers, Interest Charges and Fees, credit insurance charges, or transactions to fund certain prepaid card products. We reserve the right to adjust the number of Points for Purchases or to stop issuing Points for Purchases on the Account, upon notice to you. Upon approval, refer to the U.S. Bank Altitude Reserve Visa Infinite Cardmember Agreement for full details.”

I’m sure the full agreement has more detail and a provision allowing them to close your account for just about any reason. I’d also guess most cards have similar provisions, but those banks just don’t enforce them.

P
P

But what if you used Apple Pay which according to Apple “Apple Pay retains anonymous transaction information such as approximate purchase amount. This information can’t be tied back to you and never includes what you’re buying.”

JohnFromATL
JohnFromATL

You are confusing the T&Cs for what data Apple keeps and what data your credit card company receives. Apple is keeping some aggregated information for selling/using in marketing. This is crappy of them, but whatever. Small cost of convenience. Most of us willingly give away much more by signing up for rewards programs.

However, when they say that your purchase information is anonymous, this is what they are referring to. Certainly you do not assume your information is anonymous to your credit card company…

kingofkingsforu
kingofkingsforu

It might be a strategy by the bank to spread rumors , so that people will stop MS on this card.

Just to spread the fear. This is much cheaper than to maintain a RAT team

Zachek
Zachek

This is exactly what I came here to say. It really wouldn’t be too hard to plant the DP seeds of doubt in a few disparate places to secure the desired public perception. Certainly seems safer than paying a crack RATeam. But, if Chuck vouches for at least one of the DP’s that’s enough to give me pause. I’d like to see the letters once/if people start receiving them.

JohnFromATL
JohnFromATL

Chuck – I recommend clarifying the FM reference, since you seem to imply that the US Bank rep stated you it would be ok to buy multiples of $500. The US Bank VP never said it was okay to buy multiple $500 gift cards.

Greg asked if it was okay to “throw in a gift card with a purchase”, and got the response of yes. Then asked what about if it was a $500 gift card, again paraphrased to yes. But I got the distinct impression from his writing that this is where it became more uncomfortable. When pushed further. the US Bank rep went on to say that he would not state the specifics that would trigger action by the bank in order to prevent any loopholes from being abused.

Charles Chang
Charles Chang

Shoot, just bought a vgc from Walgreen today.

Charles Chang
Charles Chang

BTW: if your account got closed, do they give you any chance to redeem the earned rewards? Does closing the altitude trigger closing other accounts?

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