Citigroup Inc. C has been constantly making efforts to improve digital offerings and introduce fresh products to boost profitability. The New York-based bank has now forayed into the cashback credit card business with the launch of Citi Custom Cash, in a bid to further expand its product portfolio.
The no annual fee cash back credit card conforms to card members’ dynamic spending necessities, featuring a 5% cash back on their top eligible expenditure criteria — ranging from groceries to restaurants to travel etc., with each billing cycle up to the first $500 spent. Cash back is earned in the way of Thank You Points, which can be redeemed for cash back as a check, direct deposit or statement credit.
Moreover, a card buyer can avail a $200 bonus, while making $750 in eligible purchases during the first three months of account opening. Also, the card will avail a low introductory rate on purchases and balance transfers for 15 months. The standard variable annual percentage rate for purchases is 13.99-23.99% based on cardholders’ creditworthiness.
The head of U.S. Branded Cards and Unsecured Lending at Citibank, Pam Habner, stated, “We heard from customers that there’s a strong desire to carry a card that keeps up with them and automatically adjusts to their ever-changing lifestyle. That’s why the new Citi Custom Cash card is a game changer in the industry, empowering customers to earn and redeem rewards their way.”
With the increasing popularity of cash back cards, Citigroup’s entry into the same is a smart move. However, it might turn out to be a competitive affair with similar as well as superior cards already existing in the market.
JPMorgan’s JPM Chase Freedom Unlimited card pays a $200 bonus after spending $500 on purchases in the first three months from account opening. Further, similar to Citigroup’s credit card features, this one provides cash back to the cardholder in the range of 1.5-5% on several categories of purchases. The bank also offers Chase Freedom Flex Credit Card and Chase Freedom Student credit card, featuring similar benefits.
Besides, Capital One’s COF Quicksilver card pays 1.5% cash back on all purchases. Moreover, Ally Financial Inc.’s ALLY CashBack Credit Card offers 2% cash back at gas stations and grocery stores, while all other spending is rewarded with 1% cash back.
Citigroup continues to execute growth strategies, such as bolstering its position in the booming digital industry and expanding the global market presence, thereby aiming to diversify revenue sources. Additionally, prudent expense management and streamlining operations internationally keep us encouraged.
The company has gained 30.9% in the past six months compared with the 40.6% rally of the industry.
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The stock carries a Zacks Rank #3 (Hold), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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