NEW YORK (MainStreet) — Citibank’s new credit cards offer perks for consumers - but you’ll have to earn them.
Citi (Stock Quote: C) is revamping its “Thank You” credit card line this year to consolidate its consumer rewards offers but it comes with a price.
The card provider plans to drop its PremierPass, Diamond Preferred Rewards and Simplicity Rewards cards in favor of the “Thank You” line, which made its debut in 2004, but the cards will come with higher annual fees. The Thank You Premier card now carries a $125 annual fee (although he first year’s fee is waived), while the Prestige card commands $500.
The change shows a shift in focus toward the “one dollar for one point” model that so many banks are adopting nowadays. Thank You cards offer one reward point for every $1 spent, with added points for its Premier and Prestige cards on purchases made at more debit-friendly locations like gasoline stations and mini-marts.
The upside is high with the Thank You card, and as Citi’s website states, “With no points cap and no expiration of points, there’s no limit to the points you can earn.”
Citi is also trying to pump up spending for its Thank You Premier card customers. Right now, new Thank You card owners can earn an additional $200 if they make $1,000 in purchases during the first three months of owning the card. That provides 20,000 bonus points that customers can redeem for the $200 in cash.
The move comes at a time when banks seek new revenue sources after regulators clamped down on profits earned from controversial items like overdraft fees and late credit card payments last year, which have already cost banks almost $2 billion, according to a new study from Moebs services. Revenue from overdraft fees went from $37.1 billion in 2009 to an estimated $35.4 billion in 2010, Moebs reports.