The combined forces of new government legislation and decreased consumer credit card spending have led to an unrelenting assault on the revenues from credit card products.
Over the past two years, we’ve seen banks and credit card companies implement product overhauls and Citigroup has recently caught up with a new selection of ThankYou credit cards among other changes. Many customers have become increasingly determined in reducing their high-interest debt while sticking to debit cards and cash. Card companies also received the negative spotlight when they cut credit limits and raised interest rates.
New Cards to Replace Some Older Cards
Citi has rolled out its newest line of credit cards called ThankYou Cards, named after Citi’s existing rewards program. Three new cards will be introduced early next year: ThankYou Premier, Preferred, and Prestige.
Part of changes in Citi’s credit card offers will cause a number of cards will be discontinued, including its PremierPass, Diamond Preferred Rewards, Simplicity Rewards, Home Rebate and Driver’s Edge Options cards, according to a New York Times article. Cards that earn American Airlines miles will not be affected.
Cardholders who have cards that are up on the chopping block will be receiving notification letters in coming months to either transfer their accounts to a new card or to close their accounts entirely.
Notable Card Changes
The new Citi ThankYou cards offer a relatively reduced rewards structure with 1 ThankYou point per $1 spent. On purchases at supermarkets, drug stores and gas stations, the Premier and Prestige cards will earn 1.2 points and 1.3 points per $1 spent, respectively.
Annual fees may be the next target for credit card companies as they seek new sources of profits. The Premier card charges an annual fee of $125 (first year’s fee is waived) and the Prestige card has an annual fee of $450. The hefty fees from these cards would be offset by the frequent air traveler because they offer a 15% on all air travel and no foreign transaction fees.