Perk abuse, coming soon


Perk abuse

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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