Economy

Credit Card Makeover. Now More Complicated!

This one should definitely be filed under: Do we really need that? Really?

In November Citibank is going to issue a credit card with lights! And buttons! And a microchip! And a razor sharp edge for knife fights! Okay, I made that last one up, although it might be the most useful. So their "2G" credit cards (The name itself makes my teeth hurt.) will have two buttons, one you press before you make regular purchases and one you press when you want to use accumulated frequent whatever points.

The New York Times approached this story with its standard enthusiasm, quoting expert after expert saying things like:

“Creating greater flexibility on how you redeem rewards points has been percolating in the industry for two or three years now,” said David Robertson, publisher of The Nilson Report, an industry newsletter.

And:

“It’s a big deal,” said Megan Bramlette, director of research for the Auriemma Consulting Group, a payments industry consultant in New York. “If once a month a consumer can fill up their gas tank for free, and they don’t have to do anything except push a button before they swipe their card, that’s cool. And that is something that I think will resonate with consumers.”

I love the phrase "percolating in the industry" I imagine all the "payments industry consultants" talking excitedly at conference hotel bars. If only we could make a better card!

There's a decent critique over at the Time "It's Your Money" blog that goes into quite a lot of reasons why this idea will likely cost you more money.

I'm also wondering just how much it costs simply to produce these 2G cards, and also if consumers will get them without having to incur annual fees or other charges above and beyond the usual. Citi declined to offer any specifics about their outlay for high-tech cards, or whether cardholders will have to subsidize them via increased fees.

What Citi is undeniably saying is that they're offering a reward program that's plain better than their old one. But is it? It's certainly not a more generous program.

The cards being embedded with computer chips now offer 1% cash back on most purchases, and 2% back periodically on certain purchases. Just a few months ago, these same cards gave a more generous 2% cash back year-round for staple purchases, including groceries and gas. The decrease in rewards is a trend long in the works: Not long ago, these same cards gave 5%, then 3% back for purchases at supermarkets, drugstores, and gas stations.

But my question is simpler, do we really need a more complicated credit card? It totally sets off my design aesthetic gag reflex.

Maybe I'm wrong and credit card customers are salivating for more innovation in their wallets, but I just don't see it. Most people I know want fewer credit cards, less complexity, simpler interfaces, not more.

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