Citigroup Kills Some Card Perks as It Unveils New Reward Options
Citi Ends Card Perks Including Trip Insurance, Price Protection
(Bloomberg) -- The world’s largest credit-card issuer is eliminating some of its credit-card perks as it launches a new way for customers to use points.
Citigroup Inc. will discontinue free trip insurance and price-protection guarantees from all its U.S. cards, while other perks, including car-rental and lost-baggage insurance, will be pulled from some accounts. Separately on Tuesday, the bank introduced a new way for customers to redeem their ThankYou points.
“Citi continuously evaluates our products to ensure that associated benefits best meet the needs of our customers,” the New York-based company said in an emailed statement, citing “sustained low usage” of the rewards being discontinued. The changes take effect Sept. 22.
The bank’s new offering -- known as Pay With Points -- will alert customers any time they make purchases eligible to be paid using ThankYou points. Card holders will be able to select what purchases they would like to redeem for points using the bank’s mobile app. Each point will be valued at 0.8 cents when redeemed using Pay With Points, so an $8 purchase would require 1,000 points.
“Our customers work hard to earn these points and we want to make these points as rewarding as possible,” said Mary Hines, head of customer engagement and innovation for Citigroup’s branded cards business.
Banks fought a rewards war for years as they sought to capture more of their customers’ spending. But competition has begun to plateau in recent quarters as card issuers focus more on profitability and retaining existing customers.
Hines said when customers redeem their points they’re more engaged and loyal to the bank. A recent Citigroup survey of 1,000 cardholders found that customers were 86% more likely to redeem rewards points if they could be used in real time.
To contact the reporter on this story: Jenny Surane in New York at jsurane4@bloomberg.net
To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Steve Dickson, Daniel Taub
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