(Bloomberg) — Citigroup Inc. stops taking applications for its $495-a-year Prestige card, a competitor to American Express Co.’s Platinum line. and the Sapphire Reserve of JPMorgan Chase & Co.
The bank will continue to serve existing Prestige customers, according to an emailed statement on Friday, encouraging potential customers instead to consider products, including the Citi Custom Cash Card with no annual fee, which it introduced last month.
“Our go-to-market strategy is constantly evolving to offer different products and offerings,” Citigroup said in the statement.
Many banks have tried to emulate AmEx’s success in the world of premium credit cards, which takes years to become profitable for a bank. Although it is the world’s largest credit card issuer, Citigroup is not known for its premium products, posing a new challenge in attracting customers and convincing them to spend hundreds of dollars in annual fees year after year.
Citigroup’s move comes as banks ramp up their efforts to lure affluent customers to their cards as they travel and dine out again with the easing of the Covid-19 pandemic. Earlier this month, AmEx renewed its popular Platinum card, added new benefits to private jet access and hotel stays, and increased the annual fee to $695.
The call for customers has even attracted banks less known for their credit card offerings. Wells Fargo & Co. is developing a new rewards card after debuting its new cashback card last month.
Citigroup’s Prestige card is popular among travel junkies for a unique benefit: 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 warned this week that its full-year expenses will rise at a percentage in the middle single digits, up from the previously expected increase from 2% to 3%. Part of that stems from the company’s desire to invest in its card business, Chief Financial Officer Mark Mason told analysts this week.
“Given the faster recovery we’re seeing today, we’re accelerating investment in areas like card marketing to reap this advantage,” he said. “These are strategic investments we are making to strengthen our franchise and drive long-term growth.”
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