Citigroup cuts off its rival to Amex’s Platinum card

CITIGROUP Inc. stopped taking applications for its $495-a-year Prestige card, a competitor to American Express Co.’s Platinum line and Jpmorgan Chase & Co.’s Sapphire Reserve. The bank will still serve existing Prestige customers, according to an emailed statement 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 in the statement.

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’s the world’s largest credit-card issuer, Citigroup isn’t 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 comes as banks ramp up efforts to lure affluent customers to their cards as they travel and dine out again with the Covid-19 pandemic easing. Earlier this month, Amex revamped its popular Platinum card, adding new perks tied to private jet access and hotel stays and upping the annual fee to $695.

The clamor for customers has even attracted banks lessknown for their credit-card offerings. Wells Fargo & Co. is in the process of developing a new rewards card after it debuted its new cash-back card just 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 warned this week that its costs for the full year will climb by a percentage in the mid-single digits, an increase from the 2 percent to 3 percent 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.

“Given the faster recovery we are seeing today, we are accelerating investments in areas like cards marketing to capture this upside,” he said. “These are strategic investments that we are making to strengthen our franchise and drive long-term growth.”