Citigroup has made a splash in the premium credit card market by introducing a new high-end card, designed to reward travelers with extra points on their purchases, as announced on Monday.
The Citi Strata Elite Card aims to rival established offerings like the American Express Platinum and JP Morgan Chase Sapphire Reserve. Cardholders can earn more points on expenses related to hotels, car rentals, and attractions.
In addition, the card has extra benefits for American Airlines travelers.
“We inquired about what our clients truly value and tailored the benefits to fit a flexible lifestyle,” said Pam Habner, the head of Citi’s brand cards and lending. “This is unique as it features American Airlines benefits built right into the card.”
The card includes a $300 annual hotel credit, marking the latest addition to Citi’s lineup of premium reward cards.
Citi had previously debuted the Citi Prestige card in 2013 to compete with the American Express Platinum. However, after the Sapphire Reserve Card was introduced by Chase and Amex revamped their Platinum offering, Citi halted new applications for the Prestige card in 2021, although existing customers continue using it.
Mariano Toras, an economics professor at Adelphi University, commented that credit card companies need to keep competing with benefits because many people rely on credit. He pointed out that often, the rewards programs depend on fees and expenses paid by customers who may not be using the perks extensively.
“It’s a situation where some people end up subsidizing others,” he noted.
Here are four key points about the Citi Strata Elite card:
What is the cost of the reward card?
The Strata Elite card comes with an annual fee of $595, which is lower than the American Express Platinum’s fee of $695 and Chase’s Sapphire Reserve card, which costs $795 annually.
What travel perks does it offer?
This card provides customers with 6x points on air travel and 12x points for purchases related to hotels, car rentals, and attractions made through Citi’s travel portal. Booking through this portal could also net cardholders $300 for hotel stays over two nights.
Additionally, cardholders can earn 6x points on dining and delivery services from 6 PM to 6 AM on weekends, which translates to 3x points for general meals.
How do its perks compare to competitors?
Recently, competitors have enhanced their premium card offerings. Last month, JPMorgan Chase reported that its cards feature annual benefits exceeding $2,700, including a redemption program that boosts point value on specific travel offers, along with various credits.
American Express indicated plans to update its Platinum card perks later this year, though details about potential fee changes were not disclosed. Currently, it offers various credits for airline fees, hotels, and other benefits.
Do the cards offer non-travel spending perks?
Citi mentions that cardholders can expect an hour and a half points on all other purchases, alongside a $200 annual “splager credit” usable at retailers like American Airlines and Best Buy.
What should consumers think about before applying for a high-reward card?
While the allure of rewards can be tempting, Adam Rust from the American Consumer Federation advises that it’s more crucial for consumers to focus on aspects like interest rates, fees, and valuable perks. His organization advocates for consumer interests through research.
“Many consumers might not realize which cards are actually beneficial for them and often have cards with perks they don’t utilize,” he suggested. “Credit cards compete more on profits than on interest rates.”
