NEW YORK (CNNMoney.com) - The spend-to-save phenomenon is gaining more steam as EmigrantDirect becomes the latest bank to introduce a credit card that allows consumers to sock away a few extra dollars into a savings account with every purchase.

EmigrantDirect, the online branch of New York-based Emigrant Savings Bank, launches its Platinum MasterCard Thursday -- a card that offers consumers up to 1.25 percent cash back on purchases every six months. The money will be directly deposited into the customer's high-yield online savings account.

The company is promoting the card as the highest cash-back reward on the market, eclipsing American Express (Research)' "One" credit card which offers consumers one percent back on purchases.

But there is a catch: to fully benefit from the 1.25 percent reward consumers will have to hold an average $10,000 balance in their EmigrantDirect high-yield savings account.

"The balance can go up and down and we won't penalize (a cardholder) if you dip below that," said Susan Miller, vice president of Emigrant Bank. "But you can't make a one-day deposit of $10,000" and expect to reap the maximum benefits.

An EmigrantDirect customer with a $10,000 balance in a high-yield savings account can expect to earn back $12.50 on every $1,000 charged. The rebate will be deposited every six months into the account.

All cardholders with a smaller balance can still earn cash back but at a rate of 0.5 percent.

Miller said the company, which currently boasts an average balance of more than $30,000 for its online account holders, is launching the card to "encourage savers to save more."

It's a mantra that's being increasingly heard among financial institutions as companies -- citing an abysmal savings rate among Americans -- come up with new products that purport to help consumers save each time they spend.

Bank of America (Research), through its "Keep the Change" program, allows its debit card users to round up the price of any expenditure to the next dollar and place the difference in a savings account. The company will then match that figure by 100 percent for the first three months and 5 percent after that up to $250.

American Express is offering a credit card with a twist. Through the "One" program, American Express will deposit one percent of customer spending into a high-yield savings account – currently at a rate of 3.8 percent – every month and consumers can contribute extra funds to their account directly from their separate checking, savings or brokerage accounts.

But critics have been wary of spend-to-save products, particularly those that rely on credit card purchases.

"Taking on debt to accumulate savings is an obvious contradiction," said Travis Plunkett, legislative director of Consumer Federation of America. "It seems more like a clever marketing ploy than a legitimate method for increasing savings."

But EmigrantDirect's Miller said the company is targeting its own customer base, which is primarily made up of savers. To sweeten the pie, EmigrantDirect also raised its yield Thursday to 4.25 percent from 4 percent, allowing for account holders to grow their balance at a higher rate.

"People have a level of spending that they are going to do anyway," she said. "We'd love for them to do that spending on our card."

Greg McBride, senior financial analyst at Bankrate.com, a personal finance website, said that while for some credit card users, a 1 or 2 percent cash rebate would do little to offset interest charges or the money that is spent on purchases.

But for the 40 percent of consumers that pay off their credit card balance and pay no interest on balances, these type of programs are ideal, he added.

"Those cardholders are loyal, high volume card users with little credit risk," he said. "If you are among that 40 percent, these type of cards are a win."

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