Citigroup stopped taking applications for its $495-a-year Prestige card, a competitor to American Express’s Platinum line and JPMorgan Chase & Co’s Sapphire Reserve.
The bank will still serve existing Prestige customers, according to an emailed statement on Friday, and encouraged prospective customers to instead consider products including the no-annual-fee Citi Custom Cash Card, which it introduced last month.
“Our go-to-market strategy continuously evolves to feature different products and offers,” Citigroup said.
Many banks have tried to match the success of AmEx in the world of premium credit cards, which take years to become profitable for a bank. While it is the world’s largest credit card issuer, Citigroup is not known for its premium products, posing another challenge in attracting customers and persuading them to spend hundreds of dollars in annual fees year after year.
Citigroup’s move came as banks step up efforts to lure affluent customers to their cards as they travel and dine out again with the coronavirus pandemic easing. This month, AmEx revamped its popular Platinum card, adding more perks tied to private jet access and hotel stays and increasing the annual fee to $695.
The clamour for customers has attracted banks less known for their credit card offerings. Wells Fargo is in the process of developing a new rewards card after it debuted its cashback card last month.
Citigroup’s Prestige card is popular among travel junkies for a unique perk: customers who book a four-day hotel stay through the bank’s portal can qualify for a free night’s stay.
The New York-based bank said this week that its costs for the full year will climb by a percentage in the mid-single digits, an increase from the 2 per cent to 3 per cent jump it previously expected. Part of that comes from the firm’s desire to invest in its card business, chief financial officer Mark Mason told analysts this week.