A little over a month ago, I looked at our credit card system and wondered if it made any sense to optimize our credit card rewards . We “only” use two credit cards and so our system is dead simple. If I’m in a restaurant, use the Citi Forward. If I’m not, I use my Costco TrueEarnings Amex card (we also have a third card, a Capital One card, for international use but since our international travel is limited the card is shelved until we travel). I know plenty of people who have more than four cards and while I don’t share their love of optimization, or at least their adherence to it, I would optimize if it were simpler.
I see the optimization issue as having two parts – spending and paying. The spending part refers to the card you pull out at the store. The paying part refers to paying the bill when it’s due. There’s a new company out there that will help you with the spending part – they’re called Wallaby . They’re still in beta and while I signed up, I haven’t used it yet (or even seen it).
The basic idea is that you carry one card, the Wallaby Card, with all of your cards “stored” on it. When you swipe it, it’ll automatically know which one to use when you swipe it. I put “stored” in quotes because that’s a nice conceptual way to think about it. They don’t discuss the technology behind it but I suspect nothing is stored on the card itself. When you swipe, it goes to processing and at that point they’ll look up your accounts, do the calculation, and then route the purchase to the appropriate card. Matthew Goldman, founder of Wallaby, assured us the routing occurs in “real-time in the payment cloud.” There’s really no reason to store anything on the card, so I suspect that’s how they implement it.
Here’s their video: