Ameriprise's New 2.5% Card Charges $150 a Year. You'd Have to Spend $30,000 Just to Tie a Free 2% Card.

If your Ameriprise advisor slides a new “unlimited 2.5% cash back” card across the desk this month, do one division first. The card costs $150 a year, and that fee is bigger than it looks.

Run the numbers and it takes about $30,000 a year in spending just to tie a free 2% card.

Read footnote 1

Doctor of Credit flagged the new Premier Visa Signature on November 4. It’s issued by Elan Financial Services, and the headline promises 2.5% with “no caps, no categories.”

The fine print is more particular. You earn 2 points per dollar. Take them as a statement credit and each point is worth 1 cent. That’s 2%, the same rate plenty of no-fee cards pay.

The 2.5% only happens when you deposit the points as cash into an “eligible Ameriprise account,” where each point is worth 1.25 cents. Deposits happen in 30,000-point chunks, and 30,000 points takes $15,000 of spending.

Here’s the catch. Your IRA doesn’t count. Neither does any other retirement plan, and neither does a 529. Eligible accounts are things like an Ameriprise brokerage account, the ONE Financial Account and the Cash Reserve Certificate.

Translation: the bonus half-point only shows up if your rewards stay inside Ameriprise.

What it costs you

Compare it with a free 2% card. Wells Fargo’s Active Cash, for one, pays unlimited 2% with a $0 annual fee.

The Ameriprise card’s edge is half a percent, or $75 for every $15,000 you charge. The fee is $150. So you need $30,000 a year in spending, every dollar deposited to Ameriprise, just to break even.

At $15,000 a year, you’d deposit $375, pay $150, and keep $225. The free card pays $300. You’re $75 behind.

At $45,000 a year, you’d keep $975 to the free card’s $900. That’s $75 ahead.

Cash it out as statement credits instead and you’re $150 behind every year, at any spending level.

The sign-up bonus covers year one: 15,000 points after $1,500 in 90 days, worth $150 as a statement credit. Year two is when the math above kicks in.

Who should take it

The fee is waived for Achiever Circle Elite, which Ameriprise reserves for clients with more than $500,000 in eligible assets on your card anniversary. If that’s you, this is a good flat-rate card. It’s 2.5% with no fee, plus no foreign transaction fees and a Priority Pass lounge membership.

Everyone else: not worth it under $30,000 a year. If your spending tops that and you already keep an Ameriprise brokerage account, it’s your call, and the margin stays thin.

Do this

Pull your last 12 statements and add up the charges. Under $30,000 and below Elite status? Skip it and use a free card from our no-annual-fee picks.

If you take it anyway, set your redemptions to the brokerage deposit. Points expire five years after they post. Our rewards guide covers how to stack a flat card with a category card, and our card rankings compare the rest.

How Candid Yak makes money. Some of the products we write about pay us if you apply or sign up through our links. That never changes our verdict, our rankings, or the numbers in this article. We call a bad deal a bad deal whether it pays us or not. Some brands shown in our comparison tools are placeholder examples while we finalize partner agreements, and we label them as such.