Citigroup (C) is once again courting high-end credit card spenders as it rolls out its new Strata Elite premium card on Sunday with a $595 annual fee.
“The modern customer, who is affluent with a passion for travel and dining, told us they want to maximize the rewards they can earn in the categories they care about,” Pam Habner, Citigroup’s head of US branded cards and lending, said in an interview.
Strata Elite joins an increasingly crowded field as the biggest names in finance all chase after the same well-heeled consumers with credit card perks.
Last month, JPMorgan Chase (JPM), the largest US credit card issuer by purchase volume, raised the annual fee of its top-tier Chase Sapphire Reserve card to $795 from $550 and loaded it with more perks.
The country’s second-largest credit card lender, American Express (AXP), also promised a refresh later this year of its higher-end Platinum card that currently comes with a $695 annual fee.
Capital One (COF) is also “leaning in hard” with its Venture X rewards card, CEO Richard Fairbank told analysts last week. That card, which launched in 2021, comes with a $395 annual fee and special offers.
Big banks dominate the premium US credit card market. With average interest rates above 20%, according to Federal Reserve data in May, credit cards have long been “one of the most attractive areas in consumer banking,” CFRA banking analyst Ken Leon said.
Habner, who previously launched JPMorgan’s Sapphire Reserve card in 2016, said Citigroup’s new Strata Elite card will offer customers “the highest earning potential of any card in the market.”
“They very clearly told us we don’t want a card that has a coupon book filled with merchant offers we may or may not use,” Habner added.
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The rollout of the bank’s new premium card comes after Citigroup exited the business of courting wealthy spenders with perks in 2021, when it ceased accepting applications for its premium Prestige card ($495 annual fee).
By purchase volume and outstanding credit balances, Citigroup ranks as the country’s third-largest credit card lender. Its branded credit card business grew 11% in the second quarter compared with the year-ago period to $2.8 billion. Its smaller retail services card business fell 5% to $1.6 billion.
“Part of competing in this space is ensuring that we have innovative products that appeal to the needs and interests of our customers,” Citigroup CFO Mark Mason told reporters earlier this month.
Citigroup won’t be rolling out its own branded airport lounge as part of the Strata Elite. It will, however, offer cardholders “priority pass,” a voucher that grants access to 1,000 airport lounges worldwide.
JPMorgan’s Sapphire Reserve, American Express’ Platinum, and Capital One’s Venture X all come with the same perk.
But Habner said Citigroup aims to offer a wider range of perks with more customization and four passes per year to the American Airlines-owned Admirals Club airport lounge network.
In exchange for the annual fee, cardholders get six times points on air travel and 12 times points on hotels, car rentals, and attractions booked on the company’s travel platform.
Along with 1.5 times points on all other purchases, cardholders will get three times points at restaurants, with that amount doubling to six times points on Friday and Saturday nights.
“Our customers are busy,” Habner said. “They’re living exciting lives, they’re change makers, they’re traveling the world. They don’t want to have to have a math degree and a spreadsheet to try to keep track of their card rewards program.”
David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto, and other areas in finance. His email is david.hollerith@yahoofinance.com.
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