With hundreds of credit cards on the market offering an alphabet soup of rewards programs, keeping track to maximize points and miles can feel like a part-time job. We are aware that artificial intelligence (AI) tools are emerging to help automate the process from alerts to redemptions.
But can AI really help maximize your credit card rewards? Let’s investigate the current state of AI in the credit card rewards space and what the future may hold.
An Overview of AI in Banking
Before diving into AI for credit card rewards specifically, it helps to understand the growing role of artificial intelligence in the financial sector more broadly.
Banks and financial institutions have heavily invested in AI over the past decade to improve security, increase efficiency, and enhance the customer experience. Chatbots now handle basic customer service queries. Fraud detection systems leverage complex algorithms. Portfolio management platforms ingest alternative data streams.
On the consumer side, AI ‘robo-advisors’ like Betterment and Wealthfront have exploded in popularity for automated, low-cost investment portfolio management.
So in many ways, individuals already interact with AI in banking daily. Applying AI specifically to simplify credit card rewards is a logical next step in the gradual permeation of artificial intelligence through the personal finance ecosystem.
Current AI Tools for Credit Card Rewards
In recent years, a variety of venture-backed startups have released AI-powered apps focused exclusively on the credit card rewards space.
Let’s analyze some of the notable players.
MaxRewards – AI for Credit Card Recommendations
One of the first movers in leveraging AI for credit cards was MaxRewards. Launched in 2018, the MaxRewards app asks you to link your financial accounts then analyzes historical spending patterns against its database of hundreds of credit card reward programs.
Sophisticated machine learning algorithms identify the 5 cards projected to earn you the highest returns tailored specifically to your spending habits. The app also provides tips to further optimize rewards earnings.
For example, the AI may determine the Chase Freedom Flex suits your grocery and dining expenditures. Whereas the Citi Premier best covers your travel and entertainment purchases.
MaxRewards essentially serves as a personalized credit card matchmaking and optimization engine powered by intelligence algorithms.
The app itself is free but they do partner with card issuers and earn commissions when users apply for recommended products. So the incentives align – more rewards for users and more business for MaxReward’s financial providers.
CardRatings – AI for Rewards Tracking
Whereas MaxRewards focuses on new user acquisition, CardRatings targets maximizing rewards for existing cardholders through intelligent tracking.
Available as a mobile app or browser extension, CardRatings connects directly to your credit card accounts and creates a unified dashboard showing all balances, recent transactions, and most importantly, rewards earnings and redemptions across various programs.
The AI assistant monitors your purchases, alerting you when charges trigger elevated bonus categories or if you’re nearing an anniversary point bonus threshold.
An automated tracker eliminates manually tallying points and ensures you don’t leave any potential rewards unearned through forgotten activations or category bonuses. Set customized alerts and let CardRatings handle the vigilance!
Subscription plans for the app start at $7 per month paid annually.
Point.me – AI for Redemptions
On the card rewards redemption side, Point.me leverages machine learning to scour millions of frequent flyer and hotel loyalty datasets. The app then identifies how to maximize the value of your accumulated points and miles.
For example, you can input 130,000 Chase Ultimate Rewards points earned from your Sapphire Reserve. Point.me’s algorithms go to work, returning tailored flight and hotel redemption suggestions across various loyalty programs that are 4-5x the baseline value if used for simple cash back.
The AI factors in variables like loyalty program devaluation risk, fuel surcharges, high-demand travel periods, and more to uncover the most lucrative transfer partners and redemptions.
Free to use initially, Point.me charges subscription fees ranging from $60 to $300 per year for full functionality. But savvy travelers leverage the platform to stretch points into first class flights and luxury resort stays.
Future Possibilities at the Intersection of AI and Credit Card Rewards
While the apps above focus heavily on the accumulation and redemption stages, there’s wider untapped potential for AI innovation across the entire credit card lifecycle.
Here are a few possibilities that may emerge in the coming years:
AI Chatbots for Instant Rewards Support
Think 24/7 access to a personalized virtual assistant able to answer any credit card rewards question thrown at it – no waiting on hold for a call center!
AI chatbots can handle common inquiries like annual fee or bonus policies, account management tasks like setting travel alerts, and even complex questions on combining points programs.
The leading premium travel cards from Amex and Chase do provide text-based support apps. But they lack true conversational AI capabilities only in early stages of exploration.
Over time, rewards chatbots may become our go-to resource, reaching human- parity in usefulness and convenience.
Intelligent Spend Optimization
Beyond high-level card matching already offered by some platforms today, granular real-time spend optimization represents an intriguing AI application.
Imagine swiping your credit card at the grocery store. In the split-second it takes to process, an algorithm calculates whether your Chase Freedom or Amex Blue Cash Preferred would earn more rewards based on current bonus categories and previously earned points.
It then prompts a recommendation to switch cards and maximize earnings on the transaction. Multiply this by every single purchase made and the incremental value could really add up!
While technically complex to implement, early beta products hint at possibilities on the horizon.
Dynamic Rewards Redemption
Transferring points to airline and hotel partners can reap tremendous value but requires strategic timing. Award chart sweet spots change constantly in unpredictable ways.
Tracking the myriad programs becomes near impossible even for savvy travelers. But machine learning algorithms can handle such dimensionality with aplomb!
Expect AI-based apps that monitor loyalty programs around the clock, identifying opportune times and redemption pathways to maximize the points and miles you’ve accumulated across credit cards old and new.
Should You Leverage AI for Credit Card Rewards?
In closing, here are a few key summarizing points:
- AI is already transforming the banking sector in major ways and applications to credit card rewards are rapidly expanding.
- A variety of AI personal finance apps now help consumers choose optimal cards, track rewards earnings, and maximize redemption value.
- Over the next 3-5 years, expect AI chatbots, intelligent spend optimization, and dynamic redemptions to push capabilities even further.
- While still early days, savvy cardholders can absolutely benefit from tapping AI tools to take more rewards “set it and forget it” than ever possible before.
So, if you find it hard to keep pace with the breakneck world of credit card points, miles, and redemption strategies, consider handing it off to artificial intelligence.
When used properly, AI absolutely can help maximize your credit card rewards in groundbreaking new ways yet to fully materialize. The future looks bright at the intersection of credit cards, consumers, and creative algorithms.
