Credit Card Lets You Choose Paying By Credit Or Rewards Points

Would you like to pay with reward points, or credit? Just press the button on your credit card and a microcomputer rewrites the information on the magnetic strip, letting you switch payment types. A tiny light lets you know which one is active. That’s a new kind of credit card, the “2G,” Citibank is testing out starting next month.

The 2G will be offered to Citi Dividend Platinum Select MasterCard and Citi PremierPass Elite rewards program customers. The technology, called “Redemption,” was developed by Dynamics, Inc, which made a big splash recently demonstrating cards that let switch between several credit card accounts on one card and cards that required you to enter a PIN on them before swiping.

Credit Cards Soon to Get a Makeover [NYT via LowCards]
Redemption product page [Dynamics]

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The Credit Card That Rewrites Itself

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  1. Loias supports harsher punishments against corporations says:

    Would be great, except my point – which are currently worth $0.10 each essentially – will probably be reduced in response to the convenience of using this new card.

    • UnicornMaster says:

      I think they’re closer to $0.01, e.g. 10,000 points earns you $100.00
      In which case how many points would you need to buy an iPod?

  2. DanRydell says:

    Sounds like a solution to a problem that isn’t really a problem.

    • bbf says:

      That’s what I thought at first… but then I realized that they’d probably charge an OVERDRAFT FEE if you spend more from your rewards pool that you have earned, thus providing the credit card issuer another way to charge a fee. ;-)

  3. Downfall says:

    You could just as easily say “I’m paying for this with rewards” as you charge it, and then pay it with rewards the regular way at the end of the month. Unless you’re constantly flirting with over the limit fees– and, if you are, you should be on a low-interest card instead of a rewards card– it’s the same thing. Geez.

  4. ShruggingGalt says:

    Network Logo credit cards? We don’t accept that brand here.

  5. muralivp says:

    Please post the name of the bank that gives so much rewards points that switching between how to pay is so common and useful.

    • Bunnies Attack! says:

      I have one of the cards mentioned above.. the premierepass.. and it gives you one point per mile flown. I went to china and got like $300 instantly. The real issue with this card though is that you only get 1 cent/pt with $100 gift cards and only certain stores have $100 cards (less than $100 has worse exchange rates). If this gives instant redemption at 1 cent/pt anywhere I can see this being a huge advantage vs other cards

  6. HogwartsProfessor says:

    What if you stick it in your back pocket and butt-switch it without realizing it?

  7. The cake is a lie! says:

    I think it is an awesome step in the right direction. Clearly only really useful for hard core spenders, but it is still pretty cool.

    I used to work for American Express and the average monthly charging for a business account was $8000. If you were getting those kinds of points every month, then it might be worth it. Then again, most of those charges are tax deductible anyway, so I don’t know I would use my points if it was going to screw up my taxes. I’d rather cash them in for gift cards and other things with real value.

  8. ElleAnn says:

    Wouldn’t it be easier to have a box on the citicards website which says “Apply points to bill” ? You input how many points you would like to apply to your bill, and your bill is adjusted downward. I have a citi card which gets dividend dollars, and I have often wondered why they issue paper checks instead of asking me if I want to use my dollars towards my bill.

    • Loias supports harsher punishments against corporations says:

      There’s a good chance your rewards are monitored and processed by a 3rd party. Your bank can’t issue you a check directly or apply it to your balance because the 3rd party does this for them.

    • Sudonum says:

      AMEX already allows this, they also allow certain items purchased online to be paid for with points. I had that option with concert tickets last month.

  9. aloria says:

    AMEX recently introduced this as well for amazon.com– when you check out you can opt to use the points towards your balance as long as you put any remainder on the AMEX card.

    • Cantras says:

      My response to this was :O … :D :D :D

      My assumption has been that a big part of the profit to reward cards was that people wouldn’t redeem them, or would sit on them forever. I’m betting I can burn through them pretty quick now.

  10. kilgore says:

    Scam? No points if you use reward points. Points if you use credit card traditional way. Customer screwed, credit card company makes more money. Cc company ftw

  11. Ephraim says:

    Great…. from the banks that refuse to give you chip and pin, so you can actually use the card all over Europe.

  12. wickedpixel says:

    I’d prefer not to have to buy replacement batteries for my credit cards, thanks.

  13. blinky says:

    would prefer a secure id chip.

  14. r586 says:

    ummmmmmm…. why not just deduct the rewards points form the bill, you know if you have $20 in rewards points then you pay $20 less at the end of the month, why does more complexity need to be added?

  15. sonneillon says:

    They are really trying to make RF Chips relevant in credit cards. Give it up. It is just as easy to swipe a card and there is significantly less risk of someone picking it by just driving by you.

    On a side note I handle RF Chips with a hammer.

    • crazydavythe1st says:

      RF chips? You don’t even have to read the article – just the summary – to see that the information is written on the magnetic strip.

      “Just press the button on your credit card and a microcomputer rewrites the information on the magnetic strip, letting you switch payment types.”

    • jamar0303 says:

      I take it you don’t travel much. In Hong Kong the 7-Elevens already don’t take mag-stripe-only CCs?). Cash, Octopus, EPS, or Visa PayWave. And when I only have HK$500 bills and am only buying HK$20-odd of stuff I’d rather take out my Visa PayWave-enabled card and be done with it. Some people are just such luddites…

      And, for that matter, drive-by readings? Hardly possible. Not if you’re smart. I ask for cards with embedded IC chips because it makes things easier.

      • sonneillon says:

        It’s easily possible. The gear costs about 600 bucks. I can pop ever RFID that walks within 10 feet of my car unless it is encrypted (many are not but ones issued recently probably are) or in a shielded wallet (most are not)

        • jamar0303 says:

          And I’d blame America for that. We could have taken on Sony’s FeliCa format when it came out, but nooooo, they had to have their own proprietary format. The encryption on FeliCa cards, on the other hand, has never once been successfully hacked.

  16. Groanan says:

    I prefer the method my USAA credit card uses: The more I spend the more I get back as cash credited to my account at the end of the year.

    It incentivizes me to move money through my credit account, and it doesn’t require me to use any sort of gimmick.

  17. bluevideo says:

    Meanwhile I can’t get my credit card accepted in most of Europe without enduring some hassle… and in 6 months, Canada fully goes chip-and-pin as well.

    At least give me the option of a chip-and-pin card I can actually use abroad, ferchristsake.

  18. aydiosmio says:

    Surprised no one has suggested simply having two stripes (maybe move the embossed name to get it out of the way of the mag head).

    I wish the company best of luck licensing their product though.

  19. gman863 says:

    Chase offers a slightly less high-tech version of this called “Pay Yourself Back”

    After you enroll your card online in Chase Rewards, you can set up e-mail alerts when your points balance exceeds 2500 (=$25 rewards credit). Go online and select a purchase within the past 60 days that is equal to or less than your earned rewards; credit for the reward points redeemed will be on your account within 7 days.

    Yeah, it actually takes about three minutes to do this; however it beats waiting for a once a year payback or having to track your own points and manually redeem them.

  20. JonBoy470 says:

    The same company also offers a cards that allow multiple accounts on the same card (selectable by button) as well as a card that rewrites its security code with each use, and a card where you type in a “PIN” on the card itself in order to render the full number visible on the card and render the card usable. The latter two technologies can apparently be combined on a single card, rendering it immune to skimming or unauthorized use.

    Pretty bad-ass tech, in my opinion, especially how it re-writes its own mag stripe.

  21. jamar0303 says:

    I can see another application- for those people who keep offshore accounts (not necessarily to hide from the taxman- look at interest rates in Australia compared to the US). Use buttons to switch between two A/Cs for payment.

  22. webweazel says:

    “demonstrating cards that let switch between several credit card accounts on one card”
    I would gladly pay $5 from my own pocket to have one of these. I would also pay $10 from my own pocket to have one that would save and switch between all these goddamn “rewards” cards that every freaking store out there is pushing, making my wallet look like a miniature phone book. Then I could carry TWO cards instead of 30.

  23. PLATTWORX says:

    I saw a news story on this. The cards cost more and most consumers will not grasp how to use them properly. Neat idea that I don’t see actually selling to banks.