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In what is becoming a steeplechase for the rich, Citi is the latest credit card company to launch a new card catering to wealthier, traveling Americans.
On Monday, the company revealed its Citi Executive/AAdvantage World Elite MasterCard with American Airlines parent, AMR Corp. The co-branded card offers elite, globetrotting benefits such as Admirals Club membership privileges, no foreign transaction fees on purchases, "enhanced airport experience," waived baggage fee for the first domestic checked bag and concierge services.
Later this year, the card will include the EMV-enabled chip that is commonly used in Europe. EMV is an acronym for Europay, MasterCard and Visa, the creators of the technology. EMV cards use a microchip and a personal identification number to authorize a transaction instead of a signature.
Sounds fancy.
Citi isn't alone in offering lux perks to the upper echelon of earners. Last month, Chase unveiled its Ritz-Carlton reward card with the goal of tapping the upscale hotel's more well-heeled guests. Its annual fee: a mere $395.
The new cards go against American Express' Platinum card, which has a long-held reputation as the card for the affluent. In June, American Express had the lowest delinquency rate among its cardholders, reflecting its well-to-do clientele.
(Interesting side note from Dow Jones: The head of Citi's credit card business in North America used to run American Express' consumer services in the U.S. He jumped ship in September.)
After scarred by the recession's fallout, issuers are targeting low-risk consumers with high credit scores and robust spending habits, says Ken Paterson, vice president of research operations at Mercator Advisory Group Inc. Many companies are enhancing or rebranding their travel credit cards to attract the uptown crowd.
"Travel-related benefits are often an effective way to motivate these consumers to open an account and put it at the top of the wallet," he says.
It's good to be rich.
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