U.S. Bank Adds Secure Cards Amid Inclusion Push
The news: American Bank launched two new secure card products tied to existing programs, according to CNBC.
- The US Bank Altitude Go Visa Secured card offer 4X points per dollar spent on meals; 2X points per dollar spent at grocery stores, gas stations and streaming services; and 1X point per dollar spent on all other qualifying purchases. The no-annual fee card also offers a $ 15 credit for annual streaming service purchases.
- The US Bank Cash + Visa Secured card gives 5% cash back on the first $ 2,000 spent on qualifying purchases in two categories of the cardholder’s choice. They also earn 2% cash back on common expense categories like gas stations or grocery stores and 1% on all other qualifying purchases.
What this means: US Bank may use its rewards-centric secure cards to compete with customers who have limited or poor credit histories.
Unlike many secure cards available on the market, US Bank’s new products offer rewards — a superior feature American consumers like credit cards. It can help US Bank stand out from potential cardholders with lower credit scores and compete for this demographic against. Discover, whose Discover it Secured card is positioned as the first secure product for novice cardholders, according to NerdWallet.
The opportunity: US Bank can use the new cards to launch customers into its ecosystem and as a way to diversify its services.
- US Bank’s new card products are related to existing Unsecured card programs: The issuer has three unsecured Altitude cards and one unsecured Cash + card. He can use the secure cards to operate the 53 million American adults without a traditional credit score or those with a risky credit history and help those customers qualify for a US bank card product that generates more income.
- The new cards also help diversify US Bank’s product portfolio, allowing the company to serve a larger customer base with different creditworthiness and spending habits and to maximize its earning potential.
The overview: Over the past year, issuers have attempted to attract a wider range of clients, particularly those with no credit history or at risk. This took the form of new access to government-backed credit initiatives and reduce barriers to qualification.
US Bank takes a different approach to financial inclusion by offering an attractive rewards solution that enables customers to improve their credit and access other financial services, thereby creating customers who could have high potential value at life and that can serve the overall revenue ambitions.
Go further: Discover the Credit Access segment in our “Credit cards in the “next normal””To learn more about secure credit cards and other tactics used by issuers to improve financial inclusion.