Citi will be getting rid of some of its benefits for certain credit cards.
These are among the perks the company said it would eliminate from certain cards starting Sept. 22:
- Citi Price Rewind
- Trip cancellation and interruption protection
- Worldwide car rental insurance
- Worldwide travel accident insurance
- 90-day return protection
- Damage and theft purchase protection
- Extended warranty
The company said it would continue to offer these cardholders access to their FICO® credit score as well as Citi Identity Theft Solutions and Citi Entertainment.
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Why is this happening?
In online account notices, Citi said it’s removing some cardholder benefits from certain cards in order to “continue providing the key benefits that our customers use and value most at no additional cost.”
Citi’s changes might be a sign that credit card issuers are struggling to make their rewards cards profitable. According to a Wall Street Journal report, while cards offering cash back and other perks have been popular with consumers, people aren’t necessarily using the cards often enough — or carrying balances with high interest rates — which may be making the cards less profitable than issuers had hoped.
In Citi’s case, if cardholders aren’t using benefits that may have been costly for the company to provide, it could make sense for the company to remove these offerings in favor of more popular perks instead.
Will other card issuers cut their benefits too?
It’s possible. But while card issuers might be cutting some benefits, they could continue introducing others.
For instance, American Express will end Priority Pass benefits for certain cards at non-lounge airport restaurants and bars, according to a report in Business Insider. However, the card issuer has added new perks through its plans to acquire LoungeBuddy, which could give American Express cardholders more access to airport lounges.