topic Re: Could the Citi Double Cash be a 3% card? in Credit Cards

Could the Citi Double Cash be a 3% card?

cws-21 — Sun, 04 Jul 2021 08:15:12 GMT

I have always found Citi's way of offering a 2% card, in the form of the Double Cash (1% now and 1% later), to be interesting and a smart way (from the perspective of the FI) of doing so. It's made me wonder whether or not it would be sustainable for Citi to offer 1% when purchases are made and 1.5% or 2% when purchases are paid. The name wouldn't even have to change! I'm not holding my breath that Citi will do this, but I am curious if you think it could be done and be sustainable (perhaps more so than a card like AOD).

Re: Could the Citi Double Cash be a 3% card?

coldfusion — Sun, 04 Jul 2021 10:48:28 GMT

Could it be done? Sure, they already manage costs by issuing the card as either a World or World Elite Mastercard with their higher interchange rates but with many of the usual perks stripped away.

But, why would they? The card's been successful for them as-is. IMO probably more likely that they would run more promotions with a SUB worth more than the $50 in the past.

Re: Could the Citi Double Cash be a 3% card?

cws-21 — Sun, 04 Jul 2021 11:00:54 GMT

@coldfusion wrote:
Could it be done? Sure, they already manage costs by issuing the card as either a World or World Elite Mastercard with their higher interchange rates but with many of the usual perks stripped away.

But, why would they? The card's been successful for them as-is. IMO probably more likely that they would run more promotions with a SUB worth more than the $50 in the past.

@coldfusion, I doubt they will, but Citi coming out with the Custom Cash just got me thinking about possibilities. The Double Cash certainly has been successful, but I wonder if it will continue to be so now that there is much more 2%+ competition. I was just curious about what folks thought about the viability of the Double Cash being more than a 2% card solely because of its unique 1% + 1% rewards structure. It seems like it would be easier, though not more likely, for Citi to have a 2.5% or 3% card than other FIs given those who carry a balance and pay the minimum would only get 1% cash back.

Re: Could the Citi Double Cash be a 3% card?

Kraidle — Sun, 04 Jul 2021 15:10:05 GMT

@cws-21 wrote:
@coldfusion wrote:
Could it be done? Sure, they already manage costs by issuing the card as either a World or World Elite Mastercard with their higher interchange rates but with many of the usual perks stripped away.

But, why would they? The card's been successful for them as-is. IMO probably more likely that they would run more promotions with a SUB worth more than the $50 in the past.
@coldfusion, I doubt they will, but Citi coming out with the Custom Cash just got me thinking about possibilities. The Double Cash certainly has been successful, but I wonder if it will continue to be so now that there is much more 2%+ competition. I was just curious about what folks thought about the viability of the Double Cash being more than a 2% card solely because of its unique 1% + 1% rewards structure. It seems like it would be easier, though not more likely, for Citi to have a 2.5% or 3% card than other FIs given those who carry a balance and pay the minimum would only get 1% cash back.

I think a better move for Citi would be to add some sort of protection to the card. This card is a good catch-all for stuff like bills if you don't have business cards, or maybe a US Bank Cash+, so some good insurance for stuff like cellphones might make it more palatable. A bonus wouldn't hurt, either.

Re: Could the Citi Double Cash be a 3% card?

Anonymous — Sun, 04 Jul 2021 17:23:43 GMT

@cws-21 wrote:
. It seems like it would be easier, though not more likely, for Citi to have a 2.5% or 3% card than other FIs given those who carry a balance and pay the minimum would only get 1% cash back.

I no longer have the DC, but my memory was it didn't work like that. You get the 1% on whatever payment you make, whether you PIF or not. So, eventually, you would get 2% (or 2.5/3 in your version) when the purchase is paid off. Of course, if not PIF then the interest charge would far exceed that!

Re: Could the Citi Double Cash be a 3% card?

gdale6 — Sun, 04 Jul 2021 17:28:06 GMT

Merchants are brough to bear the cost of the rewards programs. An auto repair shop where I am can be hit from 1.78-6.5% depending on what kind of reward card is used.

Re: Could the Citi Double Cash be a 3% card?

simplynoir — Sun, 04 Jul 2021 17:39:42 GMT

The only way I see this if they tie it to depository relationships like BofA does with their credit cards earning higher rewards the more money you have with them. Otherwise it costs too much especially for a general public card. You need to either have it where membership is limited (USAA) or geo-restricted (AOD sort of) to keep the higher earnings long term-ish

Re: Could the Citi Double Cash be a 3% card?

cws-21 — Sun, 04 Jul 2021 17:47:11 GMT

@Anonymous wrote:
@cws-21 wrote:
. It seems like it would be easier, though not more likely, for Citi to have a 2.5% or 3% card than other FIs given those who carry a balance and pay the minimum would only get 1% cash back.
I no longer have the DC, but my memory was it didn't work like that. You get the 1% on whatever payment you make, whether you PIF or not. So, eventually, you would get 2% (or 2.5/3 in your version) when the purchase is paid off. Of course, if not PIF then the interest charge would far exceed that!

@Anonymous, I should clarify. I meant that one would get 1% for every $1 spent and then 1% for every $1 used to pay one's bill. However, if an individual only paid the minimum, he or she would not get the 1% for paying his or her bill possibly until much, much later (in addition to the heavy interest that you rightly mentioned). This has to significantly benefit Citi in a way that does not, as far as I know, any other FI with a 2% or 3% card, which was the impetus for my post. Of course, this assumes many people who have a Double Cash card do not PIF. Again, I don't expect Citi to do this, I guess I'm just letting my imagination run wild, but I would imagine there would be a fair amount of buzz and excitement for this card again if they did. Furthermore, it might not be too crazy expensive for Citi if people like many of us, who PIF, are in the minority.

Re: Could the Citi Double Cash be a 3% card?

FinStar — Sun, 04 Jul 2021 17:49:40 GMT

@cws-21 wrote:
I have always found Citi's way of offering a 2% card, in the form of the Double Cash (1% now and 1% later), to be interesting and a smart way (from the perspective of the FI) of doing so. It's made me wonder whether or not it would be sustainable for Citi to offer 1% when purchases are made and 1.5% or 2% when purchases are paid. The name wouldn't even have to change! I'm not holding my breath that Citi will do this, but I am curious if you think it could be done and be sustainable (perhaps more so than a card like AOD).

Highly doubtful. But, since you asked, Citi has been well-leveraged over the years to introduce different products to keep pace with some competitors. Some products work, while others are retired or scaled back. Case in point, the Citi Dividend is still around, but no longer available as a PC or new applications. The Citi Forward was discontinued as well. If anything, they would have changed it by now given by what's out there in the market, including AOD.

As far as Double Cash goes, it'll likely remain in place as such especially if it's been working for them over the years, plus they just introduced their newest Custom Cash card soooo.

Re: Could the Citi Double Cash be a 3% card?

cws-21 — Sun, 04 Jul 2021 17:50:51 GMT

@simplynoir wrote:
The only way I see this if they tie it to depository relationships like BofA does with their credit cards earning higher rewards the more money you have with them. Otherwise it costs too much especially for a general public card. You need to either have it where membership is limited (USAA) or geo-restricted (AOD sort of) to keep the higher earnings long term-ish

@gdale6, I feel your pain. My mechanic limits what cards he accepts, which has been an inconvenience for me in the past. However, I completely understand his perspective and don't blame him at all. @simplynoir, would a total of 2.5% to 3% be that prohibitive for Citi given my understanding is that many people don't PIF? This assumes 1.5% or 2% would be given as cash back only when making payments.

Re: Could the Citi Double Cash be a 3% card?

cws-21 — Sun, 04 Jul 2021 17:56:50 GMT

@FinStar wrote:
Highly doubtful. But, since you asked, Citi has been well-leveraged over the years to introduce different products to keep pace with some competitors. Some products work, while others are retired or scaled back. Case in point, the Citi Dividend is still around, but no longer available as a PC or new applications. The Citi Forward was discontinued as well. If anything, they would have changed it by now given by what's out there in the market, including AOD.

As far as Double Cash goes, it'll likely remain in place as such especially if it's been working for them over the years, plus they just introduced their newest Custom Cash card soooo.

@FinStar, I agree, but a guy can dream! Citi may not view AOD, or other FIs with 2.5% or 3% cards, as serious competition anyway.

Re: Could the Citi Double Cash be a 3% card?

FinStar — Sun, 04 Jul 2021 18:01:52 GMT

@cws-21 wrote:
@FinStar wrote:
Highly doubtful. But, since you asked, Citi has been well-leveraged over the years to introduce different products to keep pace with some competitors. Some products work, while others are retired or scaled back. Case in point, the Citi Dividend is still around, but no longer available as a PC or new applications. The Citi Forward was discontinued as well. If anything, they would have changed it by now given by what's out there in the market, including AOD.

As far as Double Cash goes, it'll likely remain in place as such especially if it's been working for them over the years, plus they just introduced their newest Custom Cash card soooo.
@FinStar, I agree, but a guy can dream! I doubt Citi views AOD, or other FIs with 2.5% or 3% cards, as serious competition anyway.

You can dream for sure, but what's evaluated by their executives is what drives product viability and sustainability. Believe me, they are aware of anything out there in the market, serious competition or not 😉. Just like I'm sure they were intrinsically aware of WF's Active Cash before it was launched to the public.

Re: Could the Citi Double Cash be a 3% card?

simplynoir — Sun, 04 Jul 2021 18:25:57 GMT

@cws-21 wrote:
@simplynoir wrote:
The only way I see this if they tie it to depository relationships like BofA does with their credit cards earning higher rewards the more money you have with them. Otherwise it costs too much especially for a general public card. You need to either have it where membership is limited (USAA) or geo-restricted (AOD sort of) to keep the higher earnings long term-ish
@gdale6, I feel your pain. My mechanic limits what cards he accepts, which has been an inconvenience for me in the past. However, I completely understand his perspective and don't blame him at all. @simplynoir, would a total of 2.5% to 3% be that prohibitive for Citi given my understanding is that many people don't PIF? This assumes 1.5% or 2% would be given as cash back only when making payments.

I mean sure they could do it but I don't see Citi actually implementing it. In a way when Citi made it to where cashback earned from Double Cash "converted" to TYPs while still keeping the 1cpp cashout option it was probably in response to Chase's ecosystem with the FF/FU/CSP/CSR strategy. Allows those that can find higher earnings through transfer partners that option while keeping the cashback people happy especially now that the Citi Premier and Prestige (?) now do it as well. In a way I wish AMEX did this as well but that's another topic altogether.....

Again, unless they somehow limit what customers get the higher earnings I see Citi keeping things the way they are. It's working for them so far their IT aside

Re: Could the Citi Double Cash be a 3% card?

cws-21 — Sun, 04 Jul 2021 18:42:22 GMT

@simplynoir wrote:
I mean sure they could do it but I don't see Citi actually implementing it. In a way when Citi made it to where cashback earned from Double Cash "converted" to TYPs while still keeping the 1cpp cashout option it was probably in response to Chase's ecosystem with the FF/FU/CSP/CSR strategy. Allows those that can find higher earnings through transfer partners that option while keeping the cashback people happy especially now that the Citi Premier and Prestige (?) now do it as well. In a way I wish AMEX did this as well but that's another topic altogether.....

Again, unless they somehow limit what customers get the higher earnings I see Citi keeping things the way they are. It's working for them so far their IT aside

Again, I don't disagree with anything you, @simplynoir, or anyone has mentioned regarding the likelihood that Citi will increase the % cash back for the Double Cash. You especially make a good point about Citi's relatively recent change in allowing the conversion to TYPs! I would just add that, from my perspective, Citi, and uniquely Citi, is already limiting "what customers get the higher earnings" by requiring those customers to PIF to get their full 2% cash back on purchases. This is why I have pondered whether or not Citi, in particular, is better positioned to offer a 2.5% or 3% card than other FIs despite it being highly unlikely.

Re: Could the Citi Double Cash be a 3% card?

JNA1 — Sun, 04 Jul 2021 20:05:56 GMT

@cws-21 wrote:
@simplynoir wrote:
I mean sure they could do it but I don't see Citi actually implementing it. In a way when Citi made it to where cashback earned from Double Cash "converted" to TYPs while still keeping the 1cpp cashout option it was probably in response to Chase's ecosystem with the FF/FU/CSP/CSR strategy. Allows those that can find higher earnings through transfer partners that option while keeping the cashback people happy especially now that the Citi Premier and Prestige (?) now do it as well. In a way I wish AMEX did this as well but that's another topic altogether.....

Again, unless they somehow limit what customers get the higher earnings I see Citi keeping things the way they are. It's working for them so far their IT aside
Again, I don't disagree with anything you, @simplynoir, or anyone has mentioned regarding the likelihood that Citi will increase the % cash back for the Double Cash. You especially make a good point about Citi's relatively recent change in allowing the conversion to TYPs! I would just add that, from my perspective, Citi, and uniquely Citi, is already limiting "what customers get the higher earnings" by requiring those customers to PIF to get their full 2% cash back on purchases. This is why I have pondered whether or not Citi, in particular, is better positioned to offer a 2.5% or 3% card than other FIs despite it being highly unlikely.

They may be in better position to do so, but as long as Chase, Cap 1, BOA, AMEX, and other big banks continue to keep their general purpose cash back cards at 1.5%, I don't see any other big banks jumping to 3%. A jump to 2.5% would be most likely IMO, if 2% cash back cards become the norm. FBNO, BBVA (if PNC keeps the Rewards card), and now WF adding their new 2% card hopefully keeps raising the bar for others to to do so. I imagine that would continue the trend of benefits being nerfed on cards as well, so it's kinda a double edged sword.

My hope is that AOD can sustain profitability with their 3% card, and that others will follow suit. CUs have an inherit advantage to be able to do that. I also hope that Alliant's new no AF 2.5% flat card can survive and thrive. Being honest, after getting my last 3 installment loans through CUs, I seriously don't see myself going back to banks after my mortgage and my truck is paid off.

Re: Could the Citi Double Cash be a 3% card?

Anonymous — Sun, 04 Jul 2021 21:50:15 GMT

@FinStar wrote:
@cws-21 wrote:
@FinStar wrote:
Highly doubtful. But, since you asked, Citi has been well-leveraged over the years to introduce different products to keep pace with some competitors. Some products work, while others are retired or scaled back. Case in point, the Citi Dividend is still around, but no longer available as a PC or new applications. The Citi Forward was discontinued as well. If anything, they would have changed it by now given by what's out there in the market, including AOD.

As far as Double Cash goes, it'll likely remain in place as such especially if it's been working for them over the years, plus they just introduced their newest Custom Cash card soooo.
@FinStar, I agree, but a guy can dream! I doubt Citi views AOD, or other FIs with 2.5% or 3% cards, as serious competition anyway.
You can dream for sure, but what's evaluated by their executives is what drives product viability and sustainability. Believe me, they are aware of anything out there in the market, serious competition or not 😉. Just like I'm sure they were intrinsically aware of WF's Active Cash before it was launched to the public.

It wouldn't surprise me if they have someone come check places like this; their social media people could be tasked with it during downtime even. This site is a gold mine for a lot of things and it costs nothing to benefit from it.

Re: Could the Citi Double Cash be a 3% card?

Anonymous — Sun, 04 Jul 2021 22:23:49 GMT

@Anonymous wrote:
It wouldn't surprise me if they have someone come check places like this; their social media people could be tasked with it during downtime even. This site is a gold mine for a lot of things and it costs nothing to benefit from it.

Possibly, but not sure how much use it would be to an issuer looking at a general population. Yes, you can get needs and wants from a bunch of credit card nerds here,but those may not reflect much of your user base, and even if you do just what they want, those fickle [expletive deleted] people will move on to the next thing soon enough!

Within a few months of DC becoming a 3% card we would see "Could the Double Cash be a 5% card, + 5 10% categories?"

Re: Could the Citi Double Cash be a 3% card?

Anonymous — Sun, 04 Jul 2021 23:08:22 GMT

@Anonymous wrote:
@Anonymous wrote:
It wouldn't surprise me if they have someone come check places like this; their social media people could be tasked with it during downtime even. This site is a gold mine for a lot of things and it costs nothing to benefit from it.
Possibly, but not sure how much use it would be to an issuer looking at a general population. Yes, you can get needs and wants from a bunch of credit card nerds here,but those may not reflect much of your user base, and even if you do just what they want, those fickle [expletive deleted] people will move on to the next thing soon enough!

Within a few months of DC becoming a 3% card we would see "Could the Double Cash be a 5% card, + 5 10% categories?"

Its an easy way to keep up on what the competition is offering, especially the smaller credit unions, and also gives some insight into how rewards programs are being abused (although this place isn't as bad as places like FT and reddit).

I mean the site isn't an overwhelming amount of info to deal with. Scanning new posts in the CC forums takes me about 10 minutes of time on a busy day. When I worked at Comcast they encouraged us to report when we found out the competition was offering something that wasn't in our internal systems and we were allowed to use work computers to do the research when calls were slow.