Citigroup Launches Strata Elite Card With $595 Annual Fee and Premium Perks
Citigroup (C) is once again chasing high-end credit card spenders, launching 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," said Pam Habner, Citigroup's head of US branded cards and lending, in an interview.
Strata Elite joins an increasingly crowded industry as the largest brands in banking compete for the same well-heeled customers with credit card benefits.
JPMorgan Chase (JPM), the largest credit card issuer in the United States by purchase volume, increased the annual fee of its top-tier Chase Sapphire Reserve card from $550 to $795 last month and loaded it with more perks.
American Express (AXP), the country's second-largest credit card issuer, also announced a refresh later this year of its higher-end Platinum card, which presently has an annual cost of $695.
Last week, Capital One (COF) CEO Richard Fairbanks told analysts that the company is "leaning in hard" with its Venture X rewards card. That card, which will be available in 2021, has an annual charge of $395 and includes exclusive discounts.
Large banks control the premium US credit card industry. With average interest rates exceeding 20%, according to Federal Reserve data from May, credit cards have long been "one of the most attractive areas in consumer banking," according to CFRA banking analyst Ken Leon.
Habner, who previously introduced JPMorgan's Sapphire Reserve card in 2016, said Citigroup's new Strata Elite card will provide clients with "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 told me.
The launch of the bank's new premium card comes after Citigroup stopped offering privileges to wealthy spenders in 2021, when it stopped accepting applications for its premium Prestige card ($495 annual fee).
Citigroup is the third-largest credit card lender in the country, measured by purchase volume and outstanding credit amounts. Its branded credit card business increased by 11% in the second quarter compared to the previous year, reaching $2.8 billion. Its smaller retail services card business declined 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 will not be launching its own branded airport lounge as part of the Strata Elite. It will, however, provide cardholders with a "priority pass," a ticket that allows them to visit 1,000 airport lounges globally.
JPMorgan's Sapphire Reserve, American Express' Platinum, and Capital One's Venture X all offer the same advantage.
However, Habner stated that Citigroup intends to provide a broader range of benefits, including more customization and four annual passes to American Airlines' Admirals Club airport lounge network.
In exchange for the annual fee, cardholders receive six times the points on air travel and twelve times the points on hotels, auto rentals, and attractions booked through the company's travel portal.
Along with 1.5 times points on all other purchases, cardholders will receive three times points at restaurants, with the amount doubling to six times points on Friday and Saturday evenings.