CardsFTW #178: Citi Fumbles the Strata

Money20/20

Money20/20 is just a few days away. I’m exhausted just looking at my calendar. I’m also humming with anticipation. Money20/20 is an overwhelming and wonderful experience each year, and I am looking forward to seeing so many people. I heard a rumor that the “LOVE” sign is gone, so who knows how I’ll find anyone. If you see me, ask for a business card, which comes in a unique package courtesy of my friends at BurgoPak.

I think Money20/20 will be big this year. Our Totavi Money20/20 Event Tracker now features more than 100 events, marking our highest total since we began in 2023. We probably won’t top 2022, but the good times are back.

As a programming note, we will not publish CardsFTW next week, due to exhaustion. (I’m planning ahead.)

Citibank Strata Fumbles

The Wall Street Journal published a damning piece on the challenges Citibank has experienced with the launch of its new high-end Strata card. Designed to compete with Chase’s Sapphire Reserve and American Express’s Platinum card, the Strata card doesn’t seem to be doing well. The card has a lower fee and a stated goal to be different, but they probably didn’t mean like this.

Cardholders have reported onerous requests for income verification via an IRS form (has Citibank heard about open banking or payroll APIs?). These requests have been followed with account freezes, bad customer service calls, and measly 5,000-point goodwill offers.

Look, if you charge a lot (e.g, more than $99 per year) and you aim for high-end customers, you must provide a high-end customer experience. Whether you charge $595 or $895, cardholders will expect high-quality service. I was recently asked, following last week’s admission of my 30 cards, how do I choose? Well, I do use Kudos, but I also make choices based on customer service. If I am buying from an untrusted vendor, my premium cards from American Express will get used because they are most likely to have my back in a dispute.

I understand that Citi probably received a flood of new applicants and had some fraud challenges, but the stakes are different here. Purveyors of high-end cards know that false positives create damaging experiences, and the cost may ultimately be higher than the fraud you think you prevented.

Another AAdvantage Card Launches

Speaking of Citibank and expensive annual fee cards, the bank and American Airlines announced the launch of the new Citi / AAdvantage Globe Mastercard ($350). The card joins:

1. Citi® / AAdvantage® Executive World Elite Mastercard®, ($595)
2. Citi® / AAdvantage® Platinum Select® World Elite Mastercard®, ($99)
3. American Airlines AAdvantage® MileUp® Card, ($0) and the
4. Citi® / AAdvantage Business™ World Elite Mastercard® ($99)

in a now-five-card lineup. Talk about user segmentation.

I’m sure there are some unique benefits, but I feel like someone said, “What’s between $99 and $595?” The answer is $347, but that looks weird, so $350 it is.

I don’t have the energy to compare these in detail, so here’s Citi’s version of a comparison chart.

United’s Rumored Rewards Debit Card

We recently covered the pending launch of a Southwest Airlines reward debit card powered by Galileo. Well, rumor has it United is next. Galileo and its partner banks have been pushing these cards. At least they do serve a new part of the market: people who want points and have bad credit or hate credit cards. I haven’t seen the data that says this is going to work, but maybe if you’re one of the nation’s top three or four airlines, maybe your market is so large that it does.

According to Loyalty Lobby, the new card will earn 1 mile per dollar on United spend and 1 mile per $2 on other spend, plus a 2,500 mile bonus each $10,000 spend per year (with a 70,000 mile limit). The card has a $4 per month fee, waived with balances averaging $2,000 each month.

I’m very curious to see if these are successful.

Chase Sapphire’s New Benefits Start

We covered the Chase Sapphire Reserve refresh earlier this year (CardsFTW #161). Well, the new benefits are finally here, starting October 26th (just in time to use in Las Vegas at Money 20/20!)

1. $300 annual dining credit via OpenTable
2. A free AppleTV+ subscription (although, I feel like everyone gives this away)
3. A free Apple Music subscription (OK, I will use this for songs not on Spotify)
4. $300 in credits to Stubhub
5. $120 towards Peloton memberships
6. Increased $500 credit at The Edit
7. IHG Rewards Platinum Elite status (which I got through a complex JetBlue card play earlier this year)

I think it will be easy to continue to justify my CSR. Of course, I make that excuse for all 30 cards. I need to learn to churn, not just collect.

Bilt’s UWM Partnership

Following an investment by leading mortgage lender United Wholesale Mortgage, Bilt announced a new partnership enabling UWM mortgage customers to earn Bilt Points with on-time mortgage payments, expanding Bilt beyond renters. Details are a bit scarce: Will existing mortgage holders with UWM as a servicer be able to earn points? How will you earn points for a new loan (the release says “Earn Bilt Points during origination—Bilt's 5+ million members can earn points on their monthly payments when working with UWM brokers.”)

Two card startups are already competing in the mortgage points space: Mesa Card and Made Card, each offering 1x points on mortgage payments (regardless of the servicer). 

A new luxury international dollar card from Karta

For many years, American Express has offered international dollar cards, which are Amex cards issued in the US for Latin American residents who have assets in a US Financial Institution.

Last week, startup Karta came out of stealth offering a similar international dollar card for high-net-worth “global citizens” with cash on deposit at US institutions. The new Karta Visa Infinite card is compatible with 22 banks and requires a minimum deposit of $50,000 at a partner institution. The card is very modern: All customer service occurs ovviaer WhatsApp. There are no international transaction fees, the annual fee is $300, credit limits go up to $200,000, and a slew of benefits from the Visa Infinite platform.

The card is issued by Third National, the issuing arm of Rain, out of Puerto Rico. Karta requires users to have an active US bank account, a copy of your passport, a utility bill, and a US VISA (the diplomatic document, not the card). In cases where a VISA is not required for entry into the US (that list is here), a copy of your passport will suffice. 

This is a card for a very specific (and lucrative) type of user.

CardsFTW

CardsFTW, released weekly on Wednesdays, offers insights and analysis on new credit and debit card industry products for consumers and providers. CardsFTW is authored and published by Matthew Goldman and the team at Totavi, a boutique consulting firm specializing in fintech product management & marketing. We bring real operational experience that varies from the earliest days of a startup to high-growth phases and public company leadership. Visit www.totavi.com to learn more.

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