One of the primary competitive advantages to using Citi credit cards is the extensive purchase and travel protections that come with most of its cards. Unfortunately, many of these benefits will be eliminated this September. On June 24, 2019, many Citi cardholders received an email detailing which protection benefits would be discontinued, along with this note from Citi:
“We are making these changes so that we can continue providing the key benefits that our customers use and value most at no additional cost. This change requires no action on your part. See FAQs under Card Benefits for answers to Frequently Asked Questions regarding these changes.”
The benefits being cut range from standard travel protections that most travel credit cards offer to Citi-specific perks. While the exact benefits being eliminated differ slightly from card to card, the list includes:
- Citi Price Rewind
- 90 Day Return Protection
- Missed Event Ticket Protection
- Roadside Assistance Dispatch Service
- Travel and Emergency Assistance
- Medical Evacuation
- Worldwide Car Rental Insurance
- Trip Cancellation and Interruption Protection
- Worldwide Travel Accident Insurance
- Trip Delay Protection
- Baggage Delay Protection
- Lost Baggage Protection
Many current cardholders took to Twitter to complain about the changes, some citing that these benefits were primary reasons they held the card. However, a representative from Citi stated that these changes were due to low benefits usage.
Ted Rossman, credit cards industry analyst for Bankrate, thinks the Citi benefits cut is part of a broader theme we’re seeing industry-wide regarding customer acquisition and retention costs.
“This has played out most dramatically with cutbacks in the sign-up bonus arms race, but we’ve seen it in other areas as well,” Rossman explains, citing similar (though not as extensive) benefits cuts from Chase and Discover over the past couple of years. “All of these companies have cited low usage. I think these programs have been cut back or discontinued because few people were using them (so they weren’t breeding customer loyalty), but they were being used often by a select group of enthusiasts.”
The bottom line
If these perks are a drain on company expenses yet only being utilized by a select number of customers, it makes sense why Citi is looking at cutting them. However, it also makes sense for both loyal customers and potential card applicants to be upset by these changes. Protections like Trip Interruption Insurance and Travel and Emergency Insurance are benefits that frequent travelers count on in case of an emergency. Even though they will hopefully use them, it can be a lifesaver in the event that the benefits are needed.
While this change may make Citi less competitive in the marketplace, this could be an opportunity for new benefits and features to replace the cut protections in the future. Perhaps we will see updated protections and other perks added to replace the value lost by this cut in benefits. In the meantime, cardholders should make the most of benefits like the Price Rewind feature before they are officially discontinued in September.