Could the Citi Double Cash be a 3% card?

cws-21 · ‎07-04-2021

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).

coldfusion · ‎07-04-2021

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.

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cws-21 · ‎07-04-2021

@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.

Kraidle · ‎07-04-2021

@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.

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Anonymous · ‎07-04-2021

@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!

gdale6 · ‎07-04-2021

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.

simplynoir · ‎07-04-2021

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

cws-21 · ‎07-04-2021

@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.

FinStar · ‎07-04-2021

@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.

cws-21 · ‎07-04-2021

@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.