Earlier today Citi announced a new credit card: Citi Rewards+. You can find the official press release here, or click here to read Nick’s take on the new card. Overall, the card is unremarkable except for one crazy feature: the card “rounds up to the nearest 10 ThankYou® Points on every purchase.”
This means that a $1 purchase earns 10X. And a 10 cent purchase earns 100X. And a 1 cent purchase earns 1000X. Those with the Citi Prestige card should be able to pool their points and optionally cash out points at a penny each. This means that 10-cent purchases will be free after rewards. Smaller purchases will be money makers.
All of this reminds me of the old Chase Freedom card and Chase checking combination. It used to be the case that Chase offered such customers an extra 10 Ultimate Rewards points per dollar for each Chase Freedom purchase.
So, guess what people did? They gamed it to death. One guy reported that he had written a script to buy Amazon gift cards for 1 cent each (back when they allowed that), over and over. Chase caught on and shut down such accounts. I reported on this and coined the term “perk abuse” in my 2012 post (which is still mostly applicable today): Why Chase cancels accounts (and how to protect yourself). Chase soon discontinued this Freedom card feature.
Now, Citi is excitedly unveiling a card with a very similar rewards structure to the old Freedom plus checking combo. And so you know what’s going to happen. People will game it like crazy. And, sooner or later Citi will shut down accounts. Then, they’ll either discontinue the card or change its rewards. It’s only a matter of time.
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[…] Perk abuse, coming soon […]
I agree. I wouldn’t touch this card and reset my 24-month clock for the 15K bonus in a hope of making a fortune on 10x transactions. This is not gonna happen nowadays. I think this card is more suitable for cashback folks who don’t buy into the annual fee cards on principle and who’d be thrilled to earn 10x points on an occasional small purchase.
On a related note, it’s funny how even among travel hackers there are different “factions” with different approaches to the hobby. I guess, I should be considered ultra conservative, as I’ve always avoided extreme gaming and never had any of my accounts closed. Even though my friends and family believe I’m an anarchist. 🙂
Andy
They all think that I have a zillion people I deal with PHD’s ect .They think I’m a travel wiz Untrue they won’t change their cards to Get the Points to travel anywhere @ a Lower cost . I did my first EU trip in 2010 spent $800 per nite or $10k total . Has to B a better way . I got it down to like $150 total per nite after 16 trips .Blogs did it not MEs..
CHEERs
Note that the MC interchange fee is 1.58%-2.3% + 10c. Citi does not lose money on any transaction; worst case it doesn’t gain much on 1c transactions..
Interesting. So, SquareUp absorbs the cost for tiny purchases when they charge a fixed 2.75% fee?
Yes.. for Square it’s even worse as they are also paying fees to the payment network (an additional 0.13/0.14% or what with MC)
Be nice I have SQ stock .But Fast it use to take 20 seconds with non SQ but 2 seconds after they upgraded ..
CHEERs
They have new fraud detection in place to prevent abuse. Typically if they notice 10 microtransactions (below $1 each) in a given day, it will flag and be manually evaluated (yes, they have a team that evaluates). The account will then be marked as a high risk account. After another 7-14 days (depends on vacation), the accounts will be evaluated again. If the account is being abused (continual microtransactions), it will be closed without reason. Good luck to those who try this. Welcome to 2019, where banks have more scripts protecting them.
Do you work for Citi?
Not Citi, but experienced in fraud from previous roles in tech.
I don’t have time for games like this but I think most people play games just to see if they can do it . I just do the Game just to see how much value I can get out of the cards . So far unreal and it seams the more costly the stuff is the better u can do.
CHEERs