Citigroup is launching a new high-end credit card tailored for frequent travelers, known as the Citigroup Strata Elite card. This move is part of Citigroup’s effort to compete for high-end customers.
The Strata Elite card is set to be introduced on Monday and is targeted at cardholders who seek direct travel rewards. It is reported that the card’s annual fee is $595, which is lower than the American Express Platinum card and JPMorgan Chase’s Sapphire Reserve card, with the latter recently increasing its annual fee from $550 to $795. Analysts predict that the annual fee for the American Express Platinum card will also be raised to $695 later this year.
Citigroup’s Strata Elite card will offer high reward multiples for specific consumer groups, including weekend dining and food delivery services. Cardholders will also receive $300 in hotel spending credits annually and a $200 “splurge” credit to use at Citigroup’s partner merchants like American Airlines, Best Buy, and others.
Pam Habner, the head of Citigroup’s U.S. branded cards and former JPMorgan Chase executive, stated in an interview with The Wall Street Journal, “Some credit cards have become a bit out of touch over time, which is regrettable.” She added, “Customers have told us that they are busy and don’t want to deal with a bunch of coupons and benefits. We want to address their core needs.”
Gonzalo Luchetti, the head of Citigroup’s U.S. consumer banking business, mentioned in an interview with Huari that credit card issuers are learning how to raise the annual fees for high-end credit cards without causing a high churn rate. “Prices are definitely going up over time, and people are willing to bear higher costs.”
Citigroup bank has previously entered the high-end credit card market. In 2013, Citigroup launched the Citi Prestige card to directly compete with the American Express Platinum card. This card gained high praise from travel enthusiasts for its generous rewards program and additional perks.
In 2016, with the introduction of the popular Sapphire Reserve card by JPMorgan Chase and the comprehensive overhaul of the American Express Platinum card to enhance its competitiveness, the status of the Citi Prestige card gradually declined.
In 2021, Citigroup stopped accepting new applications for the Citi Prestige card, but existing cardholders can still enjoy the card’s benefits.
While credit card issuers have been reducing the opening of new accounts for low-income customers, the competition for affluent customers has been intensifying. High-spending customers with high credit scores are attractive to banks as they are willing to pay high annual fees and are less likely to default on payments.
Citigroup has been seeking to expand its credit card business to compete with more influential rivals in the consumer banking sector. The introduction of high-end credit cards aligns with its efforts to establish deeper relationships with wealthier customers.