The news: US Bank launched two new secured card products that are tied to existing programs, per CNBC.

• The US Bank Altitude Go Visa Secured card offers 4X points per dollar spent on dining; 2X points per dollar spent at grocery stores, gas stations, and streaming services; and 1X point per dollar spent on all other eligible 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 eligible purchases in two categories of the cardholder’s choice. They also get 2% cash back on everyday spending categories like gas stations or grocery stores and 1% on all other eligible purchases.

What it means: US Bank can use its rewards-centric secured cards to compete for customers who have limited or poor credit histories.

Unlike many secured cards available on the market, US Bank’s new products offer rewards—a top feature US consumers value in credit cards. This can help US Bank stand out to potential cardholders with lower credit scores and compete for this demographic against Discover, whose Discover it Secured card is positioned as the top secured product for beginner cardholders, according to NerdWallet.

The opportunity: US Bank can use the new cards to launch customers into its ecosystem and as a way to branch out its services.

• US Bank’s new card products are tied to existing unsecured card programs: The issuer has three unsecured Altitude cards and one unsecured Cash+ card. It can use the secured cards to tap the 53 million US adults without traditional credit scores or those with subprime credit history—and help these customers qualify for a US Bank card product that generates more revenues.
• The new cards also help diversify US Bank’s product portfolio, which lets the firm serve a wider base of customers with different credit standings and spending habits and maximizes its revenue potential.

The bigger picture: In the last year, issuers have tried to attract a broader range of customers, particularly those with no or subprime credit history. This has taken the form of new government-backed credit access initiatives and lower qualification barriers.

US Bank is taking a different approach to financial inclusion by offering an attractive rewards solution that lets customers improve their credit and access other financial services—creating customers who might have a high lifetime potential value and can serve overall revenue ambitions.

Go deeper: Check out the Credit Access segment in our “Credit Cards in the ‘Next Normal’” report to read more about secured credit cards and other tactics issuers are using to improve financial inclusion.