Robots predict how you’ll spend your points

You’re going to use those credit card points on that trip to Tahiti this year; you just don’t know it yet.

A growing number of credit card companies are using artificial intelligence software to convince customers to use their credit card points in a certain way, be it redeeming their points for travel, dining, shopping or gift cards, with the goal of keeping those customers spending more and loyal to their cards.

Companies have used your past purchases to market you items for years. If you buy a tennis racket from Amazon, soon you’ll get ads from Amazon trying to sell you tennis balls.

What credit card companies are doing differently is using other measurements that would typically not be associated with a particular type of consumer behavior as predictors. Banks and other credit card companies have some of the most intimate details on an average person’s spending; knowing how much a person typically spends a month on particular categories and what merchants they shop at, and in some very limited cases, information on what exactly they purchased, such as a hotel room or airline tickets.

“It used to be ‘we saw you shop at Apple, so we are going to send you ads for Apple.’ Now, you may not have spent a dollar at Apple previously, but because you spend at other retailers or fit the profile of an Apple customer we can target you,” said Jesse Wolfersberger, senior director of decision sciences at Maritz Motivation Solutions, a company that recently partnered with British bank HSBC on its credit card rewards program.

In the case of Maritz, the company sent marketing emails to 75,000 HSBC customers. A portion of customers received an AIrecommended particular category of credit card reward — travel, merchandise, gift cards or cash back — while the rest received standard marketing emails. Roughly 70 percent of the targeted customers who ended up redeeming their points chose the recommendation generated by the computer, Wolfersberger said.

“What we see is when people are more engaged with a rewards program they tend to spend more,” said Marcos Meneguzzi, head of cards at HSBC.