U.S. Bank overhauling FlexPerks rewards program — an improvement?

For years, the U.S. Bank FlexPerks cards have had a love-it-or-hate it rewards system, when it came to airline redemptions. In 2018, depending on how you see it, U.S. Bank will “simplify” or “devalue” that system.

What’s changing

The changes, which will be rolled out in 2018 according to a letter being shared on Dr. of Credit and various forums, will affect U.S. Bank’s FlexPerks cards (there are three of them — the FlexPerks Select+, the FlexPerks Gold and the FlexPerks Travel Rewards).

The old system had a tiered-redemption structure, when it came to cashing in FlexPoints for airline tickets, which is pretty unique in the rewards world. Instead of points carrying a fixed value, ranges of ticket prices fell into redemption tiers, like so:

That means points could be worth between about 1.3 and 2 points each when redeemed for airfare. Ticket cost exactly $400? You’d need to redeem 20,000 points, for a 2-cent-per-point value. Ticket cost $401? You’ll have to use 30,000 FlexPoints for a lower value of about 1.3 cents per point. Thinking about it another way, you’re using 10,000 points to cover an extra dollar in airfare.

You could always redeem for other travel purchases, too, including car rentals and hotel stays, at varying point values.

Starting in 2018 (supposedly), FlexPoints will be worth a consistent 1.5 cents each when you redeem for airfare, as well as for hotels, car rentals and other travel expenses. As The Points Guy points out, that gives them the same value as the points earned on U.S. Bank’s luxury-card product, the Altitude Reserve. That could leave the door open for a consistent rewards currency that stretches across FlexPerks cards and the Altitude Reserve. And that, in turn, could open the door for transfers between your rewards accounts if you have multiple U.S. Bank cards (similar to how you can transfer Chase Ultimate Rewards points between your Sapphire Preferred/Reserve account and Chase Freedom account).

Upgrade or devaluation?

Making FlexPoints worth 1.5 percent for ALL travel redemptions does lower the point-value ceiling for airfares a bit. However, not all cardholders may miss the higher ceiling. Those who carefully made sure to redeem FlexPoints at a strategic redemption tier (to get a value of 2 cents per point) may miss this chance to maximize. More casual rewards users who may have been redeeming less strategically, however, won’t have to worry about getting bitten by the low 1.3-cent-per-point redemption tiers anymore. The trade-off here is value for simplicity. Those who value simplicity, however, will win under the new system.

Other ways to get 2 cents per point

If getting a value 2 cents per point on airfares is important to, you have other options:

The Chase Sapphire, Chase Sapphire Reserve and Chase Business Preferred allow you to transfer points to hotel-loyalty and frequent-flier programs, where they can be worth more than 2 cents each (if you redeem strategically for high-dollar fares in the lowest “saver” tier).

Similarly, cards from American Express (a CreditCardForum advertising partner) that earn Membership Rewards Points can also be transferred to AmEx’s travel partners, where you can maximize them (and potentially get a 2-cent-per-point redemption value). Starwood has a particularly robust transfer program as well.

If simplicity is what you’re after, it’s also worth mentioning generic travel rewards cards, such as the Capital One Venture card and the Barclaycard Arrival Plus. While points are worth only 1 cent each when you redeem for travel, you earn 2X points on all purchases with these cards, giving you a steady 2 percent return on spending. The Arrival Plus offers a 5 percent redemption bonus as well, bringing your return on spending up to 2.1 percent.

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