Citi rolls out new high-fee Strata Elite Card. How does this differ from other premium cards?

Citigroup has introduced another offering into the competitive field of premium credit cards with its launch of a new high-fee, high-reward card offering additional rewards points on travel purchases, the company announced Monday.  

The international investment and personal banking giant announced the rollout of its Citi Strata Elite Card, which gives cardholders access to extra reward points for spending on hotels, car rentals and attractions. The card competes with American Express’ Platinum Card and JPMorgan Chase’s Sapphire Reserve Card. 

Citi’s card also includes additional benefits for travelers using American Airlines.

“We have curated flexible lifestyle benefits that we know our customers will want to use — because we asked them what they value,” Pam Habner, head of U.S. branded cards and  lending for Citi, said in a statement Monday. “And, this is the only branded credit card that has American Airlines benefits built right into the card.”

The card, which offers an annual $300 hotel credit, is Citi’s latest foray into the competitive marketplace of premium reward credit cards.

In 2013, the company launched its Citi Prestige card as a direct competitor to the American Express Platinum Card. Three years later, Chase launched its Sapphire Reserve Card, and AmEX overhauled its Platinum Card.

Citi stopped allowing applications of its Prestige card in 2021, though benefits continue for customers still using that card.

Mariano Torras, an economics professor at Adelphi University and chair of its finance and economics department, said the need for credit card companies to continue to compete with rewards is an outgrowth of "our overreliance on debt across all segments of society. This is just the latest manifestation of this."

Torras said that rewards programs from credit companies often rely on other members' late fees or other costs to cover the costs of those relative few who take maximum advantage of perks.

"What always ends up happening is some members of society end up subsidizing others," he said.

Here are four things to know about Citi's Strata Elite Card.

How much does the rewards card cost?

The Strata Elite card has an annual fee of $595, lower than the $695 for American Express' Platinum Card, according to Investopedia, and Chase's Sapphire Reserve Card $795 annual price tag. Chase raised its yearly fee in June. 

What perks does it provide travelers?

The Strata Elite card   gives customers six times the points on air travel, and 12 times the points on hotel, car rental and attraction purchases made through Citi's travel arrangement portal, Cititravel.com, according to Citigroup.

Cardholders also receive up to $300 off hotel stays of two nights or more, if booked through Citi's travel online portal.

Additionally, it offers six times the points at restaurants and restaurant delivery services on Fridays and Saturdays from 6 p.m. to 6 a.m. Outside those days and hours, cardholders can receive three times the points on dining, Citigroup said. 

How do perks differ among competing cards?

Citi's competitors have recently announced upgrades in their premium-priced card offerings.

As of last month, JPMorgan Chase's card gives users more than $2,700 in annual benefits, according to an emailed news release. The card offers a redemption program that doubles the value of points for certain travel offers, and $500 in annual credit for specific hotels and resorts.

Other perks include a $300 dining credit at certain restaurants, a $300 credit for StubHub purchases, a free DoorDash DashPass membership and free subscriptions to Apple TV+ and Apple Music.

American Express said in June the company would be updating its Platinum card's perks later this year, but did not say if it would be raising its annual fees. 

The card offers a $200 credit toward fees of participating airlines, a $200 annual credit on select hotel bookings, up to $100 in annual credits for purchases at Saks Fifth Avenue, and $15 a month in Uber Cash. Cardholders also receive five times the points for airfare purchases and hotel bookings, according to the company's website. 

Does the card provide perks for non-travel spending?

Cardholders of Strata Elite earn 1½  times the points on all other purchases, and receive up to $200 in annual "splurge credits" for purchases at brands like American Airlines, Best Buy, Future Personal Training and Live Nation, according to Citigroup.

What should consumers consider before getting a high-reward card?

While rewards can be alluring, Adam Rust, director of financial services at the Consumer Federation of America, said it's far more important for consumers to weigh factors like interest rates, annual fees and late fees, rather than perks alone. 

The Consumer Federation is a Washington, D.C.-based association of nonprofit groups that advance consumer interests through research and advocacy.

“Consumers may not necessarily know what card in the end is going to be the most useful to them and what card has benefits they’ll never utilize," Rust said. “Credit cards don’t compete on interest rates any more, they compete on the benefits.”

With AP