Citi Enters Luxury Card Market With Strata Elite Debut

Citigroup has entered the luxury card market with its new premium credit card.

As Bloomberg News noted in a report on the launch Sunday (July 27), Citi’s Strata Elite places it in competition with the likes of American Express (Amex) and JPMorgan Chase in targeting big spenders with a taste for travel and fine dining.

The company said the benefits on the card, which carries an annual fee of $595, could total almost $1,500 per year, with perks on things like hotels, car rentals, and experiences.

Aside from Amex and JPMorgan, the report added, Citi will be competing with other banks trying to target customers willing to pay annual fees in exchange for travel and hospitality benefits.

“It’s always been highly competitive — competition makes us all better,” Pam Habner, Citigroup’s head of U.S. branded cards and lending, told Bloomberg.

The report points out that the $595 fee — along with $75 a year for each authorized user — is cheaper than JPMorgan’s Sapphire Reserve. That card’s yearly fee is set to rise to $795 per year from $550, the bank announced last month.

Beyond the perks tied to Citigroup, the Strata Elite card is the first in Mastercard’s new World Legend line of cards, meaning it will offer added benefits, such as access to the Mastercard Collection, which offers perks like ticket presales and quicker airport security access.

“We designed benefits that we know our customers can use,” Habner said, adding that the card was created to reward customers for types of spending, instead of giving them coupon-style rewards to be used with specific companies.

The new card is launching at a time when banks are upping their efforts to reach higher-income consumers, while making it harder for lower-income borrowers to qualify for cards.

A recent report from The Wall Street Journal found that new card openings fell for the first time in a year during the second quarter, down 5% year over year.

That report also noted that lenders are increasingly aiming promotional at higher-income consumers, while tightening their criteria for new cards.

Research by PYMNTS Intelligence finds that subprime borrowers are nearly four times as likely to express interest in getting a new credit card than consumers with the highest credit scores.

Subprime consumers, or people with credit scores below 620, tend to use these cards for essential expenses. That’s partially due to a wish to increase their credit scores, while also making sure things like groceries are covered.