Yesterday I wrote about the new Citi Rewards+ Card, which will become available as of January 10, 2019. This is a new no annual fee card, that offers some unique bonuses on purchases. Check the post yesterday for all the details of the new card, because in this post I want to focus on the one thing I (and probably many others) find the most interesting.
The Citi Rewards+ Card “rounds up” your purchases
Arguably the coolest feature of this new card is Citi will round up your purchase to the nearest 10 ThankYou points. Make a $1 purchase? You’ll earn 10 ThankYou points. Make an $11 purchase? You’ll earn 20 ThankYou points.
I love this perk mainly because of how creative it is. We’ve seen a never-ending race between card issuers to offer bigger and better bonus categories, and there’s only so far they can go. So to see an issuer add something unique like this is cool.
Understandably this benefit has raised a lot of questions.
“Can I set up automatic payments online somehow for $0.01 each?”
“So, like, can I just do self check-out at a grocery store and scan every item individually?”
I wanted to look at those points a bit more closely in this post.
Those looking to game the system
Let me first address those people who may be thinking to themselves “hmmm, I wonder if I can automate payments online somehow so that I can keep running my credit card for one cent per transaction.”
Sure, if you could run your credit card for $0.01 and earn 10 ThankYou points, that would be awesome. That would be the equivalent of 1,000 ThankYou points per dollar.
But don’t even think about it. If you even try to scale this at all, you’re likely to get shut down on two fronts:
- Whatever company you’re processing the purchase with will lose money on every transaction, and if you’re doing thousands of transactions (which would be needed to scale this), they’re almost definitely going to shut you down
- Surely Citi will similarly be tracking any sort of suspicious behavior, and will shut down those who are making thousands of small purchases
So usually I don’t even address the gaming aspect of this stuff, but in my opinion it’s not even worth considering doing that. Citi isn’t dumb, and they know what they’re doing. At least that’s my take.
Doing the math on “normal” purchases
Like I said, I really like the creativity of this card, and that it offers a different kind of bonus category. I plan on getting the card, and am excited to use it mainly because it will make me think even more about each transaction when I’m at the register.
But for those thinking of splitting up purchases into many transactions to earn 10 points per dollar, I think it’s important to look at the actual numbers at play here.
Let’s say you’re making a $1 purchase (though what even costs a dollar anymore nowadays?). At the absolute most, you’re looking at earning an incremental 8.5 points, since there are several cards that offer 1.5 transferrable points per dollar spent, like the Chase Freedom Unlimited® and The Amex EveryDay® Preferred Credit Card from American Express.
If you’re like me and value all those points currencies at ~1.5 cents each, you’re looking at an incremental 8.5 points per purchase. At a value of 1.7 cents per point, you’re looking at an incremental return of under 15 cents per transaction.
And that’s the absolute best case scenario, since it assumes you’re making a purchase not otherwise eligible for a bonus category. Buying a cup of coffee? You could otherwise earn up to 5x points on that purchase, so even a $2 purchase would be better placed on another card. At the supermarket? You can earn up to 4.5x points on that purchase.
With a maximum incremental return of 15 cents per transaction, it’s really not worth trying to play any “games” here. I like this new card and plan to get it because miles & points are a big mental exercise for me, and I love thinking about which card to use every time I make a purchase. It keeps my basic math skills sharp.
But I’m absolutely not going to try to play any games here by splitting up purchases, etc., in order to maximize this.
You’re looking at an absolute maximum incremental return of under 15 cents per purchase. If an extra transaction takes just 30 seconds, for example, you’re looking at the equivalent of earning $18 per hour by doing that (15 cents times 120). That’s not accounting for everyone you’re annoying, that’s assuming you’re making $1 purchases, and that assumes that purchase wouldn’t otherwise be eligible for a bonus category. It’s just not worth it.