I haven’t seen many Smartly card users sharing about this, so I thought I would. Feel free to double check my math. With 4% cash back at the Smartly (at 100k asset level) and a 2.95% service fee for using a credit card, the fee still earns points. So the calculation goes like this: (.04x1.0295)-.0295=0.01168
I’ll confirm it once I redeem, but right now it shows I’m earning 4% in the USB app.
That’s the advantage of any card with cash back over 2-3%. It opens up all kinds of opportunities to use it for things you usually wouldn’t charge to a card due to fees, like rent, daycare tuition, and income taxes.
@BookwormBard
Just a reminder that this kind of benefit is really funded by the bank making money from other sources, mostly through interest and the pay-over-time option (US Bank extendpay).
Even though USBS is a Visa Signature, the fees aren’t even close to 4%; you can check in their pdf that Bill Pay items are typically listed at 2.65% plus $0.10.
@Gracen
Wouldn’t most of the money Smartly makes be from USBI rather than interest?
The goal is to get high-net-worth individuals to bring their money to a less popular bank among younger people. If they can get someone to transfer over a million-dollar portfolio and sign up for advisory services, they stand to gain around $10k a year.
Works for estimated tax payments and actual taxes due as well.
I switched my daycare recurring payment to Smartly last week. They asked if I needed financial aid and didn’t understand why anyone would want to pay with a credit card since they charge a 3% fee.
Vick said:
I switched my daycare recurring payment to Smartly last week. They asked if I needed financial aid and didn’t understand why anyone would want to pay with a credit card since they charge a 3% fee.
Haha, sounds like a good chance to ask for a discount.
Your math checks out. It’s not a bad cash back rate, but Bilt earns 1x points with no fee, which I think is worth at least 2-3% cash back if you redeem through Hyatt. Still, it’s a fair point that high cash back cards sometimes make it worth it to pay a credit card fee, especially if you’re working towards a sign-up bonus.
@SophiaMartinez
Hyatt pricing is often so inflated that redeeming through Hyatt basically cancels out any benefits you think you’re getting in rates. I believe Hyatt rates shouldn’t be used as a general comparison here. They’re just misleading.
@Flynt
I think both can be true. Hyatt pricing is inflated, especially abroad, but it can still be a better deal than straight cash back.
I’ve stayed at luxury hotels costing over $1k per night for 30-35k points. Realistically, while some might have been worth less, they’re not usually down to $300-350. At worst, the ones I’ve stayed at have been worth at least $600-700 in my opinion. And I’m very happy with those redemptions.
@SophiaMartinez
Both can be true, but in general, I’m not convinced point redemptions are better value. Without knowing specifics, I’d guess you could find that $300-350 per night rate via travel aggregators or booking directly, possibly even with cash back from credit cards. The reason is, at the end of the day, the transaction still goes through the hotel, who has their lowest base rate that keeps them profitable, regardless of how you pay. If you know a travel agent, asking to see their rates can be eye-opening—it shows how the points game often feels convoluted and can end up charging people more for the same service.
I’ve made a longer post about my reasoning further down in this discussion.
@Flynt
Honestly, I have nothing to say if you really think you can book a $1k hotel for $300 through Expedia and Rakuten. If you’ve got some crazy method for that, keep it up because that sounds unbelievable.
I’m also not sure how their profitability matters. Their markup will exist whether I pay cash for $1k or use points and pay 30k, so if I find a better deal, I’ll go for it if it’s a place I want to stay. I wasn’t saying they’re losing money on my award redemption.
@Flynt
So Hyatt is counting on most people using points and then inflating prices so those redeeming at higher values feel they are getting amazing deals? Do Hilton and Marriott have the same issue with the Amex system?
@Cassidy
From what I’ve seen and heard, yes. I focus on Hyatt here, but I think this issue is pretty widespread in the points ecosystem. Articles about crazy high values are usually the worst offenders and make it obvious. Sure, there are cases where individuals do really well, but they’re rare (often involving underbooked flights or hotels, so the gains are questionable). Most point redemptions amount to about the same as their retail value; if that weren’t the case, partners wouldn’t keep doing it because they wouldn’t be making money, which they are on average.
@Flynt
Depends on the hotel honestly. I use points for a Category 4 hotel every year or so, and it’s just as pricey as other hotels in the area.
@Flynt
Hyatt pricing should simply ask: how many points did it take to book that hotel room? And how many points would it have cost for a similar Marriott? If Hyatt wins, then it wins.
@SophiaMartinez
In my opinion, Bilt is worth about 0.75%. But hey, still $18 on my $2500 rent.
@SophiaMartinez
Team cash back isn’t playing games with points. We like straight cash back without the complicated runaround.
Dayton said:
@SophiaMartinez
Team cash back isn’t playing games with points. We like straight cash back without the complicated runaround.
Honestly, I prefer more people to focus on cash back. Feel free to spread the word.
@SophiaMartinez
Don’t you have to make payments from your bank account with Bilt?