Lucky over at OMAAT writes today about a reader of his sending him the scoop on a survey related to a possible new premium card product from Citi tentatively called the “Explore” card.
Based on its $450 annual fee and similarities to the Chase Sapphire Reserve, one could safely assume it is at least possible that this card is being contemplated as a replacement for the Citi Prestige card – a card that went from amazing in its first year to good in its second year, but with one killer benefit that clearly made the card unsustainable long term in its current form – the 4th Night Free benefit.
The Citi Prestige stopped taking applications last month and we’ve been waiting to hear if they would relaunch it in some shape or form or not. This product survey for the Explore card may (or may not!) shed some light on that.
Based on what the OMAAT reader sent in, the new card would have a $450 annual fee (no word on a $100 annual fee discount for Citi Gold or Citi Priority like the Prestige did). The benefits may look something like this:
- $300 annual travel credit (would this be like the CSR with any travel counting?)
- 3x points on travel / dining
- Points worth 1.5 cents a point redeemed via the TY portal (exactly like CSR)
- A TSA Pre-Check or Global Entry fee credit (like CSR and most premium cards)
- Choice of a Priority Pass membership with unlimited visits or a limited (10 visit) Priority Pass membership with 10 but get 2x points on gym memberships (this is a weird choice to give in my opinion)
The existing Citi Prestige gives a $250 annual airline credit on flights, 3x on travel (but not dining) points are worth 1.25 cents in the portal (though back at launch one could redeem on AA for 1.6 cents which was a great feature), unlimited Priority Pass, and a TSA/GE fee waiver. But, of course, it also comes with that amazing 4th night free benefit.
My Take:
As you can see from my post title, I think this is the wrong move for Citi. Here’s why:
1) This clones the Chase Sapphire Reserve card in so many ways. Chase definitely unleashed a monster, but they also have their own profitability challenges with that card product. They also have an entrenched group of cardholders that enjoy the CSR because it’s the CSR. It got sexy branding. And it’s got by far the simplest of the rewards currencies of the Big Three.
Citi’s Thank You program in its current state is *very* utilitarian for the advanced user. Transfer programs like Avianca and Cathay Pacific can provide value that Amex and Chase can’t. But the program is *not* sexy. It’s *not* easy to use. It could be in the future if they invested time and effort to do so, but it’s not right now.
The only real reasons someone might choose this card over the CSR would be a loyalty to Citi or a preference to earn Thank You points. Those would not be sufficient to make this card a winner. especially with Thank You being the hardest of the Big Three transferable currencies to get max value from for the average user.
2) The fans of the Citi Prestige are inherently fans of the 4th night free benefit. While I’ve always maintained that unlimited 4th Night Free benefits weren’t sustainable, this contemplated card now lacks *any* killer perk. Why re-enter the premium card marketplace at all unless you have a plan to pick up real market share??
3) If Citi doesn’t want to make a real play for the Premium card market, perhaps it’s best to simply retool the Prestige to make it profitable and then spend time focusing on the Premier card or other (new?) mid-market cards where there is less competition. Mind you, as an enthusiast, I’d prefer they crush the premium space. But “Explore” isn’t that card, so if they won’t want to compete, perhaps attack a market with less current competition and crush that space instead.
There was a shakeup in Citi management just last month, when head of global cards Jud Linville stepped down. Anand Selva, a Citi veteran took over with a wider role encompassing retail banking, wealth products and Citigroup-branded cards. We don’t yet know what Mr. Selva’s plans are for the US cards group long term, but I hope that Citi Explore is not it.
What do you think? Let me know here, on Twitter, or in the private MilesTalk Facebook group.
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